How Risky Is Netflix?
Early investors in Netflix (NASDAQ: NFLX) knew they were taking a risk on a tech start-up looking to revolutionize the consumption of digital content. Fast-forward to the present day, and you'll find a slew of investors convinced Netflix is an industry staple devoid of extensive risk. Current investors or those looking to invest who subscribe to the latter mindset need to adjust their TV sets. New competition, increased content costs, and growing debt make for a risky script.
It's no secret that Netflix isn't the lone player in the streaming world anymore. Companies like Disney (NYSE: DIS), Apple (NASDAQ: AAPL), and Comcast (NASDAQ: CMCSA) have all released or are planning to release their own streaming services to compete with Netflix. While this is a win for consumers, it creates two potential issues for Netflix that we need to look at when assessing risk: the cost of content and how the company is going to pay for it.
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Source Fool.com
