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Netflix Thinks Like HBO & Dreams of Harry Potter
By: Maryann Fabian
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Subscriptions are up. Revenue is up. You’re outsmarting the competition. You’re basking in 14 history-making Emmy nominations. And your stock price is plummeting. Go figure.

On January 2, Netflix shares closed at $92. Last week, they went for $270. But you know those people who are never satisfied? Wall Street was not happy that Netflix had not done more. Even though the company met analysts’ forecasts, they were hoping for a surge of 700,000 streaming subscribers in the second quarter and they got a mere 630,000. The result? Shares dropped 15 percent.

As Hogwarts headmaster Albus Dumbledore once said, “It is our choices that show what we truly are, far more than our abilities.” And Netflix is making some good choices, even if Wall Street can’t see it yet. Fortune compared Netflix to “an investment in the future of TV” or, as CEO Reed Hastings likes to call it, “the membership-happiness business.”

Good choice #1: CNET just announced the first Android device to stream Netflix videos in 1080p high definition, Google’s Nexus 7, is coming later this year. (Even though there are multiple devices touting HD screens, the apps to support HD have been slow.)

Good choice #2: Invest in original content. As consumers cut the cord with their cable companies and look for entertainment on the go, they find lots of new options. Where the Hulus and Amazons became a vault to hold content, Netflix positioned itself as the next HBO. They resurrected the cult TV series Arrested Development. There’s buzz around Orange is the New Black. A series for teens starts soon, Mako Mermaids. And it just announced it will increase programming to include documentaries and stand-up comedy.

Good choice #3: The good sense to pick political thriller House of Cards. This is where the magic is starting to happen. It’s already Sopranos-esque in comparison, if only for the attention it’s drawing. And Hastings is dreaming much bigger. He’s hoping that it will succeed in the same way Harry Potter did.

As Hastings told investors, "Hopefully, by the time we get to season three, four, five, if we're fortunate enough to get there, then we turn it into a Harry Potter-esque global massive phenomena," with the world anticipating season after season.

Like I said, the man dreams big. But isn’t that what you want in your CEO? Someone with passion for the brand?

Consider how Netflix compares to its biggest competitor. Hulu was started by NBC and News Corp. with a “if you can’t beat ‘em, join ‘em” mentality. It became a place to post TV shows online to combat pirated versions popping up on YouTube. NBC bowed out when Comcast and Disney joined. Now, with so many bigwigs bickering at the top over what to do, the company has stalled. The CEO left earlier this year and there are rumors that the company is up for sale. Netflix doesn’t have much to worry about here.
Will Netflix reach its Harry Potter-like ambitions? Who knows. As Albus Dumbledore said, “Of course this is happening inside your head, Harry [err, Hastings], but why on earth should that mean it is not real?”

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About the Author
Maryann Fabian is a copywriter who has crafted the voice of some of this country's best brands.
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