Netflix (NFLX) 'House of Cards' Throws Out Rule Book and Wins Praise on Wall Street

February 1, 2013 3:02 PM EST
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This year Netflix (Nasdaq: NFLX) will debut six original series, including its recent launch of 'House of Cards'. Netflix released all 13 episodes for immediate viewing, an unusually practice that had many insiders throwing their hands up, the implication being "What are you doing?"

Analyst Scott Devitt of Morgan Stanley was among the group of industry watchers who questioned Netflix judgment. While he has maintained an Overweight on the stock, he thought Netflix would be better off with a more traditional linear release. That is an opinion Devitt has since abandoned. On the contrary, he now praises Netlfix for throwing out the rule book. He also thinks original content will be key to the company's long term growth.

"Previously, we believed linear release would help reduce churn, but after further analysis, we now believe the on-demand distribution model allows a much larger pool of content for Netflix to bid on," said Devitt.

Morgan Stanley reiterated its Overweight Rating on Netflix (Nasdaq: NFLX) and raised its price target from $160 to $200.

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