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Report: Netflix in talks with DT for German partnership

  • Germany's Magazine Manager reports Netflix (NFLX -0.3%) is in advanced talks with Deutsche Telekom (DTEGY) about a marketing partnership ahead of the streaming giant's planned German launch
  • DT, by far Germany's biggest carrier, is said to be comfortable with a tie-up even though it indirectly competes with Netflix through its Entertain IPTV service. Netflix is also reportedly talking with other local carriers.
  • Netflix, already operating in several European countries, is also looking to enter France and 4 other continental markets this year. The company was reported in April to be talking with Vodafone (operates in many European markets) about a free streaming promotion.
  • Netflix's relationships with U.S. service providers have often been thornier.
Comments (14)
  • Darren McCammon
    , contributor
    Comments (1173) | Send Message
     
    I get expanding demand but I just don't the stock. The content providers can squeeze them on content and play them off against others like Amazon or Google. The internet providers can squeeze them to pay for distribution. Just how are they ever going to maintain high margins? They have no moat.

     

    Disclosure - short NFLX
    20 Jun, 02:01 PM Reply Like
  • Sakelaris
    , contributor
    Comments (1410) | Send Message
     
    Their moat is their existing positive brand name and their list of forty million paying customers.

     

    And that German deal sounds like the way to break into that particular market.
    20 Jun, 03:52 PM Reply Like
  • Joshua S.
    , contributor
    Comments (45) | Send Message
     
    Brand and Customer base is not a moat. A moat is something that you can use to prevent erosion, not your current situation.
    20 Jun, 04:49 PM Reply Like
  • kata
    , contributor
    Comments (572) | Send Message
     
    Its symbiotic, why burn your distribution if you are the content or the ISP's? They are oligopolies to begin with and don't need to be put under the gun by the govt. They all have a piece of the wireless entertainment pie and they work together to take every bit of your entertainment dollar. No one wants to rock the yacht.
    20 Jun, 06:11 PM Reply Like
  • Say-What?
    , contributor
    Comments (18) | Send Message
     
    No fan of NFLX, but a good brand is not only a moat, it's one of the best.
    21 Jun, 09:37 PM Reply Like
  • Joshua S.
    , contributor
    Comments (45) | Send Message
     
    You mean like the brands "Xerox" or "Kleenex"? People call all copiers a Xerox machine, does that mean that Xerox's brand prevented people from buying a competitor?

     

    A brand is not a moat.
    22 Jun, 09:51 AM Reply Like
  • James Sands
    , contributor
    Comments (2088) | Send Message
     
    A moat is better defined or observed when major competitors target a company and attempt to take market share and do not succeed.

     

    Netflix's DVD business is actually a good example of this when Block Buster and Walmart directly replicated their own DVD businesses. Block Buster went bankrupt and Walmart sold its operation to Netflix.

     

    The future streaming model will not play out similarly. Reed Hastings is very smart, and will attempt to get Netflix ingrained into a major distributor(s). But he is not making progress on the U.S. front and international alignment makes sense.

     

    However, the 34 million paying subscribers in the U.S. are at risk of serious competitive forces. I'm not talking about Amazon, I'm talking about Comcast-TWC, AT&T-Direct TV, Disney, Time Warner, Discovery Viacom, etc. Both distributors and content owners are going to continue to consolidate. The primary result of this consolidation will be variable pricing packages for traditional TV and streaming. Over time, this will allow for greater flexibility to adjust to consumer preferences. If Netflix is not ingrained into this ecosystem, their long-term risk will continue to rise.
    22 Jun, 11:19 AM Reply Like
  • James Sands
    , contributor
    Comments (2088) | Send Message
     
    Agreed, too much risk for today's price. There is a price where Netflix makes sense, but it's a bit lower than today's.
    20 Jun, 06:10 PM Reply Like
  • GoingLong
    , contributor
    Comments (136) | Send Message
     
    The risk-reward is not compelling. This stock appears to be way, way overbought and I wouldn't be surprised for a reversal taking it well below $400. Something in the $200-250 range maybe time to get back in but with a trailing 12 month PE of 167... now is not the time... I don't think so.

     

    Anyone notice how many positive stories that have been floated over the past 6-8 weeks... isn't the timing interesting? There have been few who have questioned the cost and challenges that lie ahead to expand internationally... only positive projections that are long into the future that appear to be baked into the current stock price..

     

    Is this a stock Warren Buffett would buy? I don't think so and neither am I.

     

    I like the service they offer but only see it as complimentary to my Verizon and DirecTV and many people I know feel the same. The streaming content is limited. Many of the movies I want to see are only on DVD and then I have to wait for it to be delivered and have to mail it back etc., etc. Plus they charge you separately for each service which does not appeal to me and many others.

     

    With the 12 month trailing PE near 170 makes this one of the most overpriced stocks in the market.

     

    This is a "trading stock" and anyone putting a significant portion (5%) of their investment dollars in this company may want to re-think that.

     

    Even CEO Reed Hastings has warned and attributes the elevated stock price when it was trading below $400 to the momentum traders.

     

    Besides, be careful of the "Major Double Top". Take a look at a 6 month chart and you will see the previous top formed late Feb. into early March 2014 with 52 week high of $458. You will also see the double top forming now as it rose above $450 yesterday, June 18. The last 52 week high was $458 followed by a drop of more 35% followed by this 50% rise since only early March 2014, and if this isn't concerning to you for a likely reversal, it should.

     

    Be careful because there were many bag holders when this ran up last time to $458 and dropped to below $300. Good-luck to anyone who goes out and buys this stock at these levels. Maybe at $200-250.

     

    20 Jun, 08:34 PM Reply Like
  • Sakelaris
    , contributor
    Comments (1410) | Send Message
     
    To GoingLong--You said of Netflix, "Many of the movies I want to see are only on DVD and then I have to wait for it to be delivered and have to mail it back etc., etc."

     

    Well, for myself, I am a great believe in continued Netflix DVD rentals. Movies returned on a Monday will result in the next one arriving on a Wednesday. And what if we lose the good DVD rental service of Netflix? The impact could devastate the DVD industry. Yes, I know all the usual arguments about how DVD is in an overall decline, but I seem to be the only one on here to ask about what will happen in a no-DVD rental future. Access to content will be harder. Many shows that are currently available via DVD rental will either be...

     

    (1) locked up in pay-per-view services, with fees that will add up quickly, or
    (2) locked away in expensive cable channel bundles, or
    (3) made available on one of the above venues only occasionally and otherwise inaccessible, locked away in a content owner's "vault," or
    (4) not available anywhere at all.

     

    One of the huge misunderstandings of about streaming is that all content is somehow moving to all-you-can-watch streaming services like Netflix or Amazon Prime. No, a good part of it is staying with the pay-per-view or cable bundle formats--but much of it it is also thankfully available now via Netflix DVD rentals!

     

    Of course, for those who insist that each Seeking Alpha post have an investment aspect, let me add that DVDs remain profitable for Netflix. The "first sale rule" is a big help. So, if one roots for Netflix even in the slightest way, it will be good to root for and use the Netflix DVD rental service.
    20 Jun, 11:13 PM Reply Like
  • Say-What?
    , contributor
    Comments (18) | Send Message
     
    >> (1)...(4)<<

     

    Sakelaris

     

    You are sooo mistaken. Just "one" example noobroom.com

     

    You really need to get a new hobby. Posting the same comments on EVERY article while the world is changing. Really?
    21 Jun, 09:43 PM Reply Like
  • Sakelaris
    , contributor
    Comments (1410) | Send Message
     
    The nooboom site is apparently a piracy site. For you to promote such stuff to us not only tempts some people to put their computers in danger, but it is also in violation of the Seeking Alpha terms of use that we all agreed to.

     

    If you do not like my posts, don't read them. I think all of us have identified certain member names on Seeking Alpha that we generally skip over.
    22 Jun, 02:02 AM Reply Like
  • kata
    , contributor
    Comments (572) | Send Message
     
    I love the service. I would give up my cable before NFLX and for 16 bucks a month, its a bargain. And the service is expanding to include live talk shows, I wish it would have been Leno or Louis CK or Julia Louis Dryfuss, but, whatever and who knows what other kinds of formats they can expand into, how about online soaps, talents, user generated content, social live chats and email, limited ads for a discount, ala Amazon, to name a few. And spreading that worldwide where content is generally awful and limited will be amazing. I cant believe someone hasn't bought them. But I don't own the stock, it just got away from me and if it pulled back, I would buy some. PS, if you've missed some great old films, like Chinatown, help yourself, a young Jack Nicholson and Faye Dunaway looking smashing, a cameo from Roman Polanski, "..my daughter, my sister.." amazing...
    20 Jun, 11:27 PM Reply Like
  • agaptrader
    , contributor
    Comments (66) | Send Message
     
    Netflix is already at its prior peak. Having said that it may still go higher, but difficult to buy this stock at this level. There are competitions coming from AMZN, AAPL and other players in the streaming section...
    something to consider before hitting the buy buttom!!!
    21 Jun, 02:25 PM Reply Like
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