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Is Netflix Strategy Misguided?

Should Netflix be concentrating on a European takeover?

Netflix has been scrambling to regain customers after a failed attempt to divide the company in two and change its pricing model in 2011. Yet it has made strides in its recovery, the Harvard Business Review notes, and the impact of the changes may have been exaggerated, since it was 405,000 customers - not 800,000 - that abandoned the company.

"This represents a 1.7 percent decrease in paid subscribers, which is meaningful if the trend continues but is not doom and gloom per se," the source notes.

However, as Netflix makes plans to return to its earlier standing, some critics are questioning whether the company's fourth quarter earnings report is as rosy as it seems on a second review, Venture Beat reports. Rather than trying to smoke out competitors at home, Netflix should spend more time worrying about streaming service providers beyond its borders.

The news outlet notes that not expanding into the newer markets of Latin America, Canada, Ireland and the U.K. could be much more disastrous for the company than any changes it made in the U.S.

If Netflix staggers in those regions, the source says, the company could be left without the cash cushion that would enable it to "renew costly content agreements, which are expected to get even more expensive."

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