Reed Hastings is prowling CES for deals. Already, in the past year, the CEO of DVD rental service Netflix Inc. has cut at least a half-dozen partnerships with consumer electronics makers to make a Netflix service that streams movies and television shows over the Internet watchable on television sets via game consoles, digital video recorders and other gadgets.
Recipe for a (possible) rebound:
1 Movie and popcorn for a family of four: $70
1 Night at a “Ticketmaster event” for a family of four: $240
1 Year-long subscription for two-at-a-time unlimited movie rentals from Netflix: $163.20
Shake it up.
Now, if only it would affect the stock price.
Isn’t the theory supposed to be that in time of economic stress, Americans hunker down at home and watch more videos? Well, maybe not. Netflix this morning reduced its guidance on subscriber growth for both the third and fourth quarters, while very slightly adjusting its Q4 financial outlook.
Sure, most of us can get pretty fired up over the thought of a monthly 250GB bandwidth cap, but what about the companies that provide online video services? After all, as Om Malik pointed out, the cap isn’t about excessive bandwidth usage as much as it is about stymieing online video sources like Hulu, Netflix and Amazon.
On the heels of Netflix’s (NFLX) problems last week getting DVDs out the door to subscribers, Needham & Co. analyst Charlie Wolf initiated coverage this morning of Blockbuster (BBI) with a “Hold” rating.
Here’s the follow-up to last Friday’s article reporting that Netflix (NFLX), after experiencing a technical difficulty that prevented sending out DVDs for several days, said it would refund 15 percent of monthly subscription fees to a subset of customers.
Needham’s Charlie Wolf this morning raised his rating on Netflix (NFLX) to Hold from Under Perform, and lifted his price target on the Web-based video rental company to $25 from $22. Wolf said he has revised his model of the company’s business, and that his previous model “materially under-estimated the value of the company.”
Two things struck me about Roku’s newly announced $100 Netflix Player, a book-sized set-top box that lets people watch streamed video files from Netflix on their TVs. First, it was priced lower than anything I’d previously seen in the “digital media adapter” category (i.e., devices that bridge the gap between the Internet and the TV). And second, it delivered less than any of those other devices. All it can do, in fact, is connect to Netflix’s Web site, select a movie or TV show to stream, then display the chosen program on a TV set.
Netflix (NFLX) today unveiled a new set-top box to be produced by privately held Roku Inc. that will allow subscribers to stream an unlimited number of movies and television shows directly to televisions. The device costs $99. The video content is free to anyone with a Netflix subscription of $8.99 a month or more. Most of the video content will consist of older material, rather than new releases.
Netflix shares are coming under pressure today following a skeptical note on the company from Needham analyst Charlie Wolf.
Wolf today picked up coverage of the company with an Under Perform rating; he writes that “the company’s current valuation incorporates unrealistic subscriber acquisition cost and churn rate assumptions.” He calculates fair value for the shares to be $22, well below the current level.
Will Microsoft offer Netflix movies over Xbox Live? Bloggers and reporters have been buzzing about the possibility of a partnership for almost a year, ever since Netflix CEO Reed Hastings joined Microsoft’s board of directors last March. But there have been other hints that the two were inching toward a more formal marriage.
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