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Discussion Starter · #1 ·
 http://news.com.com/2100-1023-921344...e.dht.nl-hed.0


This should be good news for NetFlix customers.

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DVD site climbs on Wall Street debut


By Margaret Kane

Staff Writer, CNET News.com

May 23, 2002, 2:55 PM PT

update Online DVD-rental company Netflix made its Wall Street debut Thursday, playing well to fans in trading on the Nasdaq Stock Market.

The company set an initial price of $15, at the top of its previously announced $13 to $15 range. It closed at $16.75 Thursday after rising as high as $17.40, or 16 percent.


Netflix said it would use the $82.5 million raised in the initial public offering to pay off $13.7 million in debt and for general purposes. The offering was underwritten by Merrill Lynch, Thomas Weisel Partners and U.S. Bancorp Piper Jaffray.


The company charges consumers a $19.95 per month for a subscription that allows them to choose movies online and have them shipped out via first-class mail. Subscribers return the DVDs using enclosed mailers. There are no late fees. Customers can rent as many movies as they want during a month but can only have three movies out at a given time.


Netflix says it has more than 600,000 customers, according to documents filed with the Securities and Exchange Commission. It lost $4.5 million in the first three months of this year, a sharp decrease from the $20.6 million it lost in the year-ago quarter. Revenue almost doubled year over year, rising from $17.1 million in the first quarter of 2001 to $30.1 million in the first quarter of 2002.


The company had $15.6 million cash on hand as of March 31.


Investors are probably looking favorably at the company's improving financial picture, said David Menlow, president of research service IPO Financial Network.


"Revenue is increasing at a robust pace, and losses are shrinking dramatically. Here's a company that represents the possibility of hitting critical mass," he said.


But that doesn't mean that we're poised for another dot-com deluge in the stock market, he said.


"I'm hopeful that it is a singular situation, not the beginning of a new trend on filings," he said. "We do expect, as the economy stabilizes, more deals to make it into the marketplace. But hopefully they will not be dot-com stocks."
 

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Or not. Many people think once you hit that big IPO that its all free turkey and gravy thereafter. In fact that's when the REAL work begins. I wonder what they are going to do with their new found cash.


Improve their inventory? Decrease shipping times? Increase customer satisfaction? Or just piss it all away on marketing and super bowl commercials?
 

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I agree...now the Battle begins. I have a somewhat controversial method of increasing revenue.


Add Adult Films.



Adult Content has been the one consistent money maker. Netflixx should take advantage of their existing network to offer this.


Imagine 24.95 per month allows you access to movies rated NC-17 or above? I think plenty of people would take this offer. It's all about pleasing Wallstreet/Shareholders now. Discuss
 

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No, the most important thing they need to do is have regional distribution areas so that they can guarantee a one or at most two day shipping. If you are listening Netflix make some regional distribution points to decrease shipping times.
 

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David,


They have added this recently. All my DVDs for the past couple of weeks have been sent from and to Gaithersburg. I actually had a DVD I put in the mailbox on one morning show up as "received" before the next day was out...
 

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Isn't there the threat that a Heavyweight like Blockbuster enters the fray. What's gonna keep Neflixx afloat then. Blockbuster could employ a strategy where you return the discs to the nearest BB store or toss'em into the mail if you don't want or live close to a BB. I worry about that aspect more than anything. BB could have some nice tie ins to entice users to go to the store(free rentals in store only etc).
 

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Discussion Starter · #7 ·
Things have definitely improved with NetFlix lately. The last couple of disks I dropped in the mailbox were received, processed, and the replacement was back in my hands within one week. At that rate, I'll always have something new to watch (I can rarely watch more than 4 per week)


--Burke
 
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