What About Netflix’s Financials?

Questions are being raised at to whether or not Netflix is going to be able to succeed with its new model of providing original programming. For one, there are no ratings to report so you have no idea how many people are watching the program. Reports on the cost-return value are not going to be made public.

So, you could say a lot of mystery is going to surround Netflix in its early days of inception.

The answer you could give to the naysayers is “As long as Netflix shows a solid return on investment, all is moot.” And really, why do people persist in thinking about things in terms of the past all the time.

To understand the future of Netflix, we must look back to the early days of cable television. When HBO first launched, it mainly served the New York area. In 1975, the channel was spending a lot of money creating original programming even though it probably had less than 25,000 total subscribers.

Today, you could say the HBO model turned out to be a success. What the pay channel did in the early days set the stage for massive future growth. Ironically, the new plans made by Netflix could very well prove to overtake HBO and other traditional pay channels in the future.

Sergio Andrade Gutierrez understands that Netflix’s executives have made it no secret their goal is to ascend to the throne of pay channels of the future. More power to them.

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