To use Netflix is to believe in the stock
The user experience keeps getting better in this rebellion against cable. No wonder people are buying the service -- and the stock.
Maybe it all comes down to whether or not you use Netflix (NFLX). Because if you do, you understand why it is so terrific and why it could rally 7 more points. If you don't, then you are in Nowheresville.
I have been cribbing off my kids' Netflix ID, since in a roundabout way, I pay for them. But I decided to open my own account this weekend because they don't want me messing with the queue anymore.
I am still in the mail-order game, getting the DVD I want to watch when I want it. I do that because even though I have FIOS and DirecTV (DTV) (hopeless football fan) and have had Comcast (CMCSA), I frequently find there's nothing on the dial I want to watch when I want it.
My kids use Netflix on everything -- iPad, Apple Air, desktop. (We're a big Apple (AAPL) family.) They are not thrilled with the Microsoft (MSFT) Xbox streaming offerings, but they are so much savvier at it than I am that they will use it, although the selection seems very cable-like. (Microsoft owns and publishes MSN Money.)
I know Comcast is working on radically expanding its movies on demand. But here is the problem: Netflix has everything. Everything. No one is ever disappointed. That allows the company to charge a little more compared with what is perceived to be an exorbitant price for movies on demand for cable.
In fact, I find that Netflix is a rebellion against cable, a rebellion that is growing.
I know bearish investors are constantly circling, talking about the high price, the soon-to-slip gross margins and the competition. But the user experience keeps getting bigger and better -- something that can't be factored into the multiple as easily as the negatives but something that is at the core of why people are buying the product and, hence, the stock.
Random musings: Lots of talk about how the Ireland rescue package is "underwhelming." What did people expect? A Jim Dandy rescue package that makes everyone excited? It is a rescue package, for heaven's sake.
At the time of publication, Cramer was long AAPL.
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