Netflix Stock Bounces
Summer seems to be doing good things for some troubled, but popular, Internet businesses. Facebook, whose stock had been dropping pretty steadily since its IPO, not only leveled off, but has begun a rebound. In the streaming media market, Netflix, whose stock has had an almost year-long decline, bottomed out on June 1 at $60.70/share. Since then, however, Netflix investors have had a lot to cheer about and their investment has been bouncing back in the right direction.
One reason for the stock turnaround is likely that Netflix has buried a radically unpopular idea to separate its physical media (DVD, Blu-Ray and video games) business from its Internet-based streaming media service. Stockholders and Netflix users were not too keen on the company splitting up and now that executives have made it absolutely clear that those plans have been terminated altogether confidence in the company is slowly growing again.
Netflix had an exceptional June, however. In June, Netflix users downloaded over one billion hours of entertainment. That level of consumption is greater than that of any television network, making Netflix a surprisingly strong medium again. On news of its unexpected popularity, Netflix stock rallied up to $81.50 and it has remained in that vicinity since. On the news of Netflix’s June record, Netflix traded at about three times the volume than its daily average.
Like many of the online subscription streaming services, Netflix benefits from generally poor summer programming on the major networks. Many consumers use the summer months to catch up on the shows they missed during the rest of the year and Netflix is seeing a bump, in part, because of that trend. However, this first spike comes before an anticipated spike in viewership when Netflix presents its original programming. Not only is Netflix producing a new show, House Of Cards, the streaming video company resurrected the cult-favorite comedy Arrested Development, which FOX cancelled years ago. Fans of Arrested Development are subscribing to Netflix in order to catch the ten episode limited series in advance of the Arrested Development feature film.
While Netflix is facing stiff competition from Hulu and Amazon Prime – less from HBO’s streaming service – but the uptick prior to the expected surge when its original programming airs is a good sign for the streaming company. For the first time in a year, things are looking up for Netflix!
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