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Netflix is a success story that will have many sequels.
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While its stock got hit a few years ago when management raised prices on its movies-by-mail service, the company was redeemed through streaming video. While this trend will continue for the foreseeable future, and Netflix has the first mover advantage, Netflix isn’t going to continue to be good only because it got there first. Like Apple, not only does Netflix invent, but it continues to innovate and develop its products and services.
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Netflix has gone beyond simply providing movies, and its focus now is on streaming television shows. This has the advantage of creating repeat demand for new episodes in a series. If someone decides to watch a popular television show mid-season, she has to order all previous episodes to get the gist of the characters and the plot. For Netflix, demand for television shows is the gift that keeps on giving; Motley Fool points out that Netflix carries 32% of the most popular television shows of the last four years compared to Amazon’s 12%.
Television shows on Netflix, like House of Cards and Orange Is the New Black attract devoted fans and raise the profile of Netflix. However, Netflix has not neglected its legacy movie business, and carries 12% of the top 50 films from the last 50 years, with Redbox placing second at 7% and Amazon, third at 6%. Netflix has an edge over the competition in both movies and television shows that will secure its dominance for the longer term.
