Reed, Don't Listen To Wall Street

Netflix took a beating on Wall Street last week.  After revising subscriber estimates downward by 1 million subscribers, its stock went into free fall, closing the week at $155, down from a $300 peak in July. Netflix, the darling of Wall Street for the past three years, has lost half its value in a few short months.

It must be a gulp moment right now for CEO Reed Hastings, who has always set Netflix on its own path and let investors figure things out for themselves. More than any other company, Netflix represents the transition of high-end video entertainment (movies and TV shows) to the Internet. A bet on Netflix, is a bet on streaming video. That transition is inevitable. It is going to happen for many reasons. Reed knows this. He saw it earlier than most. Sending people DVDs by mail was always just an interim business model until broadband, the studios, and customers caught up.

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