I agree with you premise. What amazes me though is how Reed Hastings and Netflix have continually managed to stay a few steps ahead, every time the short sellers have cogently advanced such arguments.
He is now leveraging his current position as a powerful industry player, by funding original content in the -production- stage. If he can successfully leverage their substantial cash flow AND substantial audience/customer base by morphing Netflix into a pseudo-independent studio, he may yet, once again reinvent Netflix again BEFORE the aforementioned vulnerabilities come to fruition.
A couple years ago Netflix was “doomed” according to the “shorts” because DVD’s were becoming obsolete. Now Netflix's “Watch Now” service is replacing the discs as a cash cow.
I believe Netflix will be big into proprietary content under Hastings and that is why I believe he could greatly enhance shareholder equity for the owners of Comcast if he were CEO.
It’s been probably 15 years ago now that I read an article about the reforming of AT&T that predicted in the end, the convergence of cable, phone, and internet will come down to who delivers the bandwidth to the home. Right now the cable companies have the most control over bandwidth, and content providers like Netflix are at their mercy (unless you want to go back to mailing DVDs).
Wireless - maybe. But 4G and/or WiMax will not be cheap, and bandwidth will not be abundant. I’m betting Lightsquared dies at the starting gate, and satellite isn’t a viable option due to bandwidth limitations and latency.
From today’s perspective it’s got to be pretty much fiber-to-the-home. But who’s going to own that fiber? For users, some say the best deal would be publicly-owned dark fiber that would be viewed as public infrastructure - competitors could pay for bandwidth like they pay taxes on motor fuels to build and maintain highways. But that’s what the $6BnPorkulus ARRA giveaway (USDA RUS/NTIA) was all about, and how well does anyone think that’s going to work out?