Users have valid criticisms here. Nothing in their post indicates that Netflix's costs have increased, so why would they hike prices by 60%? Why would you expect a positive response to such a move?
Q1 2010: $202 Million
Q2 2010: $203 Million
Q3 2010: $225 Million
Q4 2010: $232 Million
Q1 2011: $300 Millionhttp://money.cnn.com/2011/07/08/technology/netflix_starz_con...
This is a company that operates dozens of physical warehouses, employs thousands of people, and pays an astonishing amount in postage fees.
Their licensing costs are surely just a fraction of their bottom line.
They paid $1.2 billion in licensing costs. It's their most expensive cost, by far.
The post I replied to -- and my reply -- was addressing streaming licensing:
Pachter predicts Netflix's streaming content licensing costs will rise from $180 million in 2010 to a whopping $1.98 billion in 2012.
In other words, of that $1.2bn you quote from their 10-K, 1.02bn was physical discs.
It doesn't look like they take positions themselves. They seem to be your standard financial services broker/dealer, in which case they do research for clients who take positions.
It's likely they have a "Sell", or at least "Hold", rating if they're writing negative notes. But that's as it should be; I think you have the causality backwards in your implication.
As much as everyone thinks that Netflix is going to compete with cable, the only way to truly do so is to start getting first run, quality content and that costs money - boatloads of it. Netflix has gotten a pass for now since it was the only game in town but if they want to compete for your entertainment dollars they're going to have to spend some cash on quality first run content.
I give it less then 2 years before they start offering tiered plans - and maybe something subsidized via advertising. Its the only natural evolution of their model.