Seeking Alpha

Analysis: Netflix's deal with Virgin Media has long-term implications

  • A new Netflix (NFLX -0.5%) deal that will see the streaming service integrated into Virgin Media's (VMED) set-top boxes could have broad implications across the media landscape, according to analysts.
  • Pay TV operators are slowly warming up to the idea of letting Netflix inside of their programming guides, instead of closing them out as a competitor.
  • Though the financial benefits might be slow to be realized, the shift of the perception of Netflix is a long-term positive.
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Comments (3)
  • Water Brothers Financial Co...
    , contributor
    Comments (379) | Send Message
    loony tunes - virgin media another floundering co. netflix owns nothing - short term rights to mediocre programming, and a bunch of cloud servers. Pretty soon when nflx is short of capital to keep overpaying for content so they can make press releases to juice the stock and when it is apparent they will never show much profit that way - the producers of content will go directly to the end providers and cut nflx out of the middle. I cannot believe that everyone doesn't see how much like blockbuster nflx is.
    11 Sep 2013, 11:14 AM Reply Like
  • timedk
    , contributor
    Comments (21) | Send Message
    Reed Hastings is the king of hype. Every piece of news or deal, pumps the stock $500m +. This one broke the record though. Over 1B in Mkt cap on this event. Can't fight the hype. Comes down to it, NFLX is just a all you can eat buffet of the video rental business. They own nothing. They pay top dollar for the licensing and make a thin 2% profit. Which may become less with the content costs rising. They are spending more to boost the revenue #'s. meager profits will be in play for sometime. Sooner or later as the profit potential picture becomes clearer. I think the stock will fall back to reality. The herd compares to names like AMZN P/E, blah blah blah. AMZN has a high p/e, because bezos spends all the money on his empire. He constantly accumulates and invests in growing the business. Hastings just pays $7 for product and sells it to you for $8. Makes a buck, deduct expenses and you have smoke. That can't last forever. The rise lasted 15 months in 2011 before the great fall, we are only in month 9 of the great rise part 2. Funny how a loss of 800k subs knocked them down to a $50 stock. No value here, but you can't fight they hype.
    11 Sep 2013, 11:36 AM Reply Like
  • forceOfHabit
    , contributor
    Comments (62) | Send Message
    Looks like the market is fighting the hype pretty well today (-$8.00).
    11 Sep 2013, 12:10 PM Reply Like
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