Netflix&#x27;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.<p>&gt;The problem is there at the mercy of content producers who can extract most of the long term value.<p>How is that any different from HBO?<p>Netflix doesn&#x27;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.