by Sarah McBride, Jessica E. Vascellaro and Sam Schechner, Reporters, The Wall Street Journal
Google Inc.’s YouTube is in discussions with major movie studios about allowing users to stream movies on a rental basis, according to people familiar with the company’s plans, marking one of the video giant’s first moves towards charging for content instead of making it available for free with advertising.
The genesis of Netflix came in 1997 when I got this late fee, about $40, for “Apollo 13.” I remember the fee because I was embarrassed about it. That was back in the VHS days, and it got me thinking that there’s a big market out there. So I started to investigate the idea of how to create a movie-rental business by mail.
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.
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