Netflix Running Into Trouble Over Epix	Visited: 1187 5.0/5.0 (1 votes total) Rate: Select 1 - Terrible 2 - Poor 3 - Average 4 - Good 5 - Outstanding
by Shannon Suetos September 29, 2010

More people are looking to enjoy movies and television shows through their computer than ever before. This is why companies like Netflix are looking to add the features which will retain their customer base and hopefully expand it. This is why they make sure to add the most recent titles as soon as possible. They also try to add different features which they thing the customers will want to use when they purchase memberships.

This was the thinking behind the new pay-TV channel which is being offered by Netflix, MGM, Paramount and Lionsgate. While it seems like the addition would be a huge hit, analysts like James Patterson at Morgan Keegan believe it is too big of a bite for the company.

The thought process is this is a huge departure from the DVDs sent out with the help of postage machines. The belief is that the price is just way too high for the company to keep up and it will soon be in financial trouble. This is because there is a fear that people will simply not sign up for the service with so many other options to choose from.

They say that Netflix is simply trying to grow faster than the economy will allow. By sticking to the old postage scales to ship out DVDs, the company was able to keep its head above water. The problem is that Netflix simply would not be able to compete in the market without offering streaming services. This is why the films and the shows offered continue to grow month after month and the operating expenses continue to rise as well.

Since the company cannot take a step backward, they tried to take a step into unchartered territory and it looks like it might have been shark infested water. The shot that Patterson gave Netflix caused their stock to drop 5% the next day. This is a huge loss for the company and it is only destined to get worse. This is because other analysts are likely to get on board.

The worst part is the idea seems like a sound one to make. It is a great product and it is right up the alley of the many people who sign up for service through Netflix. The problem that they run into is that the pay content is something that Netflix customers feel that they are already doing. They pay to get access to the titles which are available. They do not like the idea that they will have to pay even more in order to gain access to this new offering from the company.

Only time will tell if Epix is a good gamble. So far, the analysts do not believe that it is a sound decision to make. They are calling for the company’s demise. Then again, look back a decade and would you really have been able to say that a company sending out DVDs to your home would be a good idea?