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Netflix Streaming Spending May Hurt Margins  Print E-mail
Home Theater News Industry-Trade News
Written by Dick Ward   
Tuesday, 25 January 2011

Netflix is paying a lot for new streaming content, but that might end up hurting them.

The folks over at Netflix are at the top when it comes to paid streaming content, and they'd like to stay that way.  In order to keep that position, they're spending money - lots of it - on the acquisition of streaming content.

It's a sound strategy, but industry analyst Michael Pachter of Wedbush Morgan Securities says the company may be going a bit overboard.  Spending too much on new content will offset the increased subscriber base and eat into the company's margins.

"We believe that Netflix will be challenged to grow at its current pace for more than another year," says Pachter.

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