Netflix, Inc. (NASDAQ:NFLX)

sjscott80 (68.89) Submitted: 9/18/2006 1:12:40 AM : Start Price: $22.85 NFLX Score: +421.85

Netflix will own the DVD rental market for the forseeable future. Although companies have recently unveiled methods to download digital copies of movies, investors and consumers have been underwhelmed. I've read that quality digital downloads are at least five years away. Still, who really wants to watch movies on a computer? You can't exactly curl up with a loved one and some popcorn.

Going to cinemas to watch movies today is very expensive, particularly in urban areas. So I'm sure people are doing what I do: I've stopped seeing movies in theatres and instead add them to my Netflix queue. For $18, I can watch at least 10 movies each month. In a theatre, the same would cost me at least $100.

Netflix is also increasing its DVD sales operations. Viewers can purchase used movies -- on the cheap -- through the website. Renting movies through Netflix is a good way to see which movies one likes, and then one can purchase many of them if one so chooses.

Of course, is it inevitable that movies will one day be mainly downloaded from the Internet. I believe Netflix is currently doing lots of R&D in that area, so they will be poised to take advantage of that opportunity when it arises. The company is also diversifying into other outlets like independent movie companies. The future looks bright, and the share price is currently low.