Netflix's expenses increased due to continued international expansion. It has a very lucrative business model, not that dissimilar to HBO, which is extremely pr

Netflix's expenses increased due to continued international expansion. It has a very lucrative business model, not that dissimilar to HBO, which is extremely profitable. It was definitely undervalued until relatively recently. >The problem is there at the mercy of content producers who can extract most of the long term value. How is that any different from HBO? Netflix doesn't need to have everything, and, in general, Netflix can afford to outbid other services for content due to the sheer size of its membership and revenue streams.