As its profile rises, Netflix faces backlash

As Netflix continues to decimate its competition, The Wall Street Journal reported this weekend that the web-rental service’s increasing success has turned many heads around the industry—and not in the good way.

Netflix stock closed at $43.42 yesterday (Blockbuster shares trade for under $1 these days), but the WSJ argues that the company's “bubble may be close to bursting” because many of the studios that supply movies to Netflix and its Watch Instantly service have realized they’re losing potential revenue. Watch Instantly, available on several platforms, is a major part of why inventors see so much potential in Netflix even though most observers believe its traditional mail service will falter in time.  

The WSJ says that consequently, as studios begin to consider creating their own instant-video services, they will likely renegotiate or even sever their ties with Netflix.

The most astonishing figure in the WSJ story, though, is that based on investments, Netflix is valued at 26 times its revenues—more even than ironclad commodities like Google. Given this, the paper warns, "a correction" isn't far off.

Related links:
News: Blockbuster denies it's heading for Bankruptcy
News: Netflix brings 12,000 movies and TV shows to TiVo users
News: Napoleon Dynamite outed as culprit for bad Netflix picks

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