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