It's Time to Bust This Netflix Myth


Shares of Netflix (NAS: NFLX) are rallying again. Big Money backing, resulting from enthusiasm for June's streaming numbers, is likely the cause, but the gains could just as easily be attributed to inept competition.

Hulu Plus this week began offering new subscribers two months of free service. Except that it isn't really free. Neither Hulu, nor Hulu Plus, is all that different from individual network website archives that provide access to recent TV episodes in exchange for watching a few commercials as you stream. Hulu has the same requirement -- and charges you $7.99 a month for the privilege.

I know, I know, I'm being snarky. That's because I find Hulu Plus to be a poor alternative to Netflix. Here's why:

  • An awful movie library. Right now, the most popular movies at Hulu Plus include Quentin Tarantino's Jackie Brown, a solid choice, alongside ... the Lifetime movie Inspector Mom. Talk about a letdown. Popular selections on Netflix right now include the 2011 action thriller Drive, and Transformers: Dark of the Moon, the latest in Hasbro's giant-robot action franchise.

  • Few shows outside of network favorites. Say you're a DISH Network customer looking for another way to view catch-up seasons of blacked outAMC Networks (NAS: AMCX) shows, such as Breaking Bad. Hulu Plus won't help you. Netflix will. The same is true for BBC favorites, such as Doctor Who, and Sherlock. My point? Netflix doesn't need new, exclusive deals to set itself apart from Hulu.

To be fair, my evaluation of Hulu Plus is neither scientific nor rigorous. All of it is based on opinion, and I know of others who love Hulu and loathe Netflix. Tastes always vary and, as a Hulu fan, you may find my ranting nonsensical.

Yet, there's plenty of nonsense to go around. Consider the growing number of skeptics who insist that Apple (NAS: AAPL) is a massive threat to Netflix despite all evidence to the contrary. The two companies have partnered to create what looks like the perfect foil to's (NAS: AMZN) Instant Video service, which offers both an all-you-can-eat streaming menu a la Netflix and an iTunes-like option to rent and purchase premium flicks and TV episodes a la carte.

Skeptics still skewer Netflix because they believe that the Qwikster debacle, and poorly timed share buybacks, are reflective of broad-based incompetence. They believe CEO Reed Hastings lacks the savvy to build a sustainable business. I say the evidence suggests otherwise. Where do you stand? Please weigh in using the comments box below.

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Fool contributorTim Beyersis a member of theMotley Fool Rule Breakersstock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Apple and Netflix at the time of publication. He also had a long-term call options position in Netflix. Check out Tim'sweb home,portfolio holdings, andFoolish writings, or connect with him onGoogle+or Twitter, where he goes by@milehighfool. You can also get his insightsdelivered directly to your RSS reader.The Motley Fool owns shares of, Apple, Hasbro, and Netflix.Motley Fool newsletter serviceshave recommended buying shares of, Hasbro, Apple, and Netflix.Motley Fool newsletter serviceshave recommended creating a bull call spread position in Apple. The Motley Fool has adisclosure policy. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.

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