Tickers in this Article: NFLX, CSTR, AMZN, EBAY
The race to conquer consumers' appetite for movies is running full tilt. When the DVD came out, it looked as if it was going to save the laggard of the movie industry - brick and mortar movie rental chains. As consumers flocked to buy DVD players, the expectation was that DVD rental demand would surge. That was indeed the case, but it proved to be short-lived.

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Technology to the Rescue?
Thanks to an upstart named Netflix (Nasdaq:NFLX), consumers no longer have to visit the video store. For a monthly fee, consumers can "check out" a specified number of DVDs from Netflix's expanding catalog. The DVDs arrive via mail and consumers merely needed to enclose them in the pre-paid return envelope included with each rental. As the Netflix model gained traction, it was bye-bye to video rental chains. At least it was for Blockbuster Video, once the nation's largest video rental chain. Earlier this year, the company had to file for bankruptcy. Last I checked, shares were trading for a nickel on the pink sheets.

Yet despite the growth in Netflix, investors may have gotten ahead of themselves. Shares trade at a lofty 72 times trailing earnings and 50 times forward earnings, respectively. At a $10 billion market cap, the company's valuation is a staggering five times revenues and 33 times EBITDA. Investors seem to be enamored with growth stories again. Amazon (Nasdaq: AMZN) shares continue to break new highs as the online shopping craze gets into full gear this holiday season. At 71 times earnings, anything but perfection could lead to a nasty pullback. What may be of interest is eBay (Nasdaq:EBAY) which looks incredibly attractive at 16 times earnings, especially in relation to other online based businesses. More and more online stores are popping up on eBay, giving consumers another online shopping experience. (For more, see 7 Signs A Stock Is Set To Slide.)

Redbox to the Rescue
In addition to valuation concerns, Netflix is getting some competition from an unexpected place: a red DVD vending machine aptly dubbed Redbox. While there are other DVD kiosks in operation - Blockbuster now has them - Redbox is by far the most prevalent. The Redbox model is simple - DVDs for $1 a day. Redbox is part of Coinstar (Nasdaq:CSTR), the company behind the green coin counting machines found at many grocery stores and other consumer destinations. With nearly 30,000 Redbox kiosks, consumers have accepted the simple rental model. Even so, Coinstar's valuation has gotten ahead of itself. While not nearly as lofty as Netflix, CSTR shares fetch 50 times trailing earnings and 20 forward earnings, respectively. (For more, see Investment Valuation Ratios: Price/Earnings Ratio.)

The Bottom Line
The hunt for the next big growth story has not lost its vigor amongst investors. For now it seems like its best to stick to buying the cheap DVDs by both companies and not the shares. (For more, see Playing The Growth-Stocks Comeback.)

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