Netflix (NASDAQ:NFLX) has had an up and down couple of weeks, figuratively and literally.
The media distribution company Tuesday was down for about four hours during prime viewing time on the West Coast, leaving subscribers with nothing much more to look at than an "I'm sorry" on their screens as the company scrambled to get the streaming videos streaming again.
By this morning, all was back to normal.
"Netflix is up and on as usual," Netflix spokesman Steve Swasey said in an email this morning. "Last night we had an unanticipated and rare technical issue that interrupted the service for about four hours, since fixed."
But, of course, there was, earlier in the day, a note from Credit Suisse analyst John Blackledge, who, in a report titled "Don't Stop Believing," urged the Netflix faithful to remain calm in the face of new competition launched from the likes of Facebook (a trial partnership deal with Warner Bros.) and Amazon.com (which rolled out a free, but limited, streaming service to members of its Amazon Prime shipping service).
"At this stage, we do not view this as material competition to Netflix streaming service for two reasons," said Blackledge of the recent Facebook foray. "It is currently just a test with one movie, and the content will be rented on an à la carte basis, which has not proven to be an effective competitor to Netflix."
He also predicted Netflix would roll out one international market a year through 2016, and capture some 69 million subscribers worldwide by 2016.
Blackledge also upped his view on the stock from neutral to "outperform" and set his target price per share at $280, a whopping $100 boost of his previous target.
Of course, late last week, Netflix signed a $100 million deal for at least 26 weeks of original content, "House of Cards," its first foray into that side of the market.
The latest news from Netflix, may help to explain why it's begun to look at acquiring its own content.
Showtime Tuesday said it would no longer give Netflix online streaming rights to two of its more popular current shows, "Dexter" and "Californication," choosing instead to offer them only on its own channel and online service. It will, however, continue to offer other original content to Netflix, like "The Tudors," and "Sleeper Cell," both of which are off the air. The new deal goes into effect this summer.
Showtime, which is owned by CBS, is likely to continue to provide older content to Netflix. After all, CBS recently signed a $200 million deal of its own with Netflix for older programming.
Is this the start of the jihad some content owners have promised to wage against Netflix? Can it last?
There's still a lot of content to be had out there, and Netflix is still gaining clout with subscribers. -Jim