Is This Netflix's Next Qwikster-Sized Mistake?


Netflix has been friendly to outside developers for many years. The company provided easy-to-use data access tools, giving rise to a cottage industry. Netflix even ran a tool-building contest with a million-dollar prize, until privacy hawks shut down that idea. And many of the company's in-house tools have been exported as open-source projects.

These initiatives have built a strong technology base, and a thriving ecosystem around the core operation. In many ways, that's exactly howFacebook killed MySpace and rose to social media stardom. Why not follow that template, especially since Netflix CEO Reed Hastings serves on Facebook's board of directors?

But Netflix is backing down from that developer-friendly policy these days. In this video, Fool contributor and longtime Netflix shareholder Anders Bylund explains why this move makes him very nervous.

The tumultuous performance of Netflix shares since the summer of 2011 has caused headaches for many devoted shareholders. While the company's first-mover status is often viewed as a competitive advantage, the opportunities in streaming media have brought some new, deep-pocketed rivals looking for their piece of a growing pie. Can Netflix fend off this burgeoning competition, and will its international growth aspirations really pay off? These are must-know issues for investors, which is why The Motley Fool has released a premium report on Netflix. Inside, you'll learn about the key opportunities and risks facing the company, as well as reasons to buy or sell the stock. The report includes a full year of updates to cover critical new developments, so make sure to click here and claim a copy today.

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Fool contributor Anders Bylund owns shares of Netflix, but he holds no other position in any company mentioned. Check out Anders' bio and holdings or follow him on Twitter and Google+. The Motley Fool owns shares of Netflix and Facebook. The Fool has bought calls on Facebook. Motley Fool newsletter services have recommended buying shares of Facebook and Netflix. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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