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Netflix, Inc. (NFLX) Has Lost Its ‘Cool Factor’: Liberty Global CEO

Netflix, Inc. (NASDAQ:NFLX) has lost its “cool factor.” At least, that’s what the chief executive of Virgin Media owner Liberty Global Mike Fries thinks. Since it is no longer cooler it has stopped being a direct competitor or major threat to pay-TV companies.

Netflix, Inc. Isn’t the ‘Cool’ Kid Anymore

Speaking at a recent London board meeting, according to the London Guardian, Fries made the claim that Netflix isn’t cool anymore. And this is a positive for pay-TV firms. Although the firm continues to grow all over the world, he feels that the streaming giant’s business model is limited.

Netflix Inc (NFLX)

Fries argued that Netflix has morphed into a program provider similar to HBO or Sky Movies. Moreover, “the cool factor” of the company’s technology has vanished. Today, many other firms and brands are adopting it, which means Netflix has to create content in order to maintain and attract subscribers.

He may have a point, too. Liberty Global has recently made considerable tech advancements. This means the gap between the likes of Liberty Global and Netflix is very small. Liberty Global launched a new video-on-demand service called My Prime, which has become a big deal in Europe.

“The problem for Netflix is while it is a home of TV shows and films it doesn’t have Sky or BBC [channels] which makes [it just] part of the meal,” said Fries. “We want to be the big plate, if you want to look at it in those terms. The long tail [of the huge popularity of older archive programming] is a myth. People want Game of Thrones, Downton Abbey.”

It’s because of these developments that Netflix is looking to make an impact worldwide. Not only has the website decided to roll out its service in most countries, it is also spending about billions in content.

Perhaps this is the reason why its share price has dipped more than 18 percent year-to-date. The tech firm missed analyst expectations for subscriber growth in the second quarter. It was also reported that it has to spend $10 billion to buy, license and product content over the next five years.

Netflix, Inc. Facing Huge Competition

Many ardent supporters of Netflix may argue against the suggestion that it’s no longer cool. The website has churned out critically-acclaimed and popular content in recent times. Shows like “House of Cards,” “Stranger Things,” “DareDevil” and “Orange is the New Black” continue to generate buzz for Netflix.

But it’s true that Netflix is facing huge competition. Everywhere it turns, there is another company popping up that is both producing content and adopting the same technology.

Amazon.com, Inc. (NASDAQ:AMZN), for instance, has Prime Video and critically-acclaimed content. It’s also cheaper by a buck! Even cable companies have started to offer online video-on-demand services in order to remain relevant with the younger demographic. Today’s millennial generation is cutting the cord in large numbers.

Netflix and its technology are here to stay. But Fries may have a point that it’s no longer cool. We have become accustomed to web VOD so it doesn’t seem brand new to us anymore. We just accept it and expect it now.

Who knows what the next “cool factor” will be when it comes to tech and content?

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Based in Saudi Arabia, Siraj has a strong understanding of and passion for accounting and finance. He has worked for international clients for many years on several projects related to the stock market, equity research and other business, accounting and finance related projects. Siraj is a published financial analyst on the world's leading websites including SeekingAlpha, TheStreet, MSN, and others.