Netflix: No Thanks - We'll Have Level 3 Instead
Focus Equity • 61 Comments
Focus Equity • 61 Comments
Dec. 17, 2015, 2:35 PM
- Netflix (NFLX +1%) is on the verge of unveiling changes to its streaming technology that could improve bandwidth usage by up to 20% with no discernible loss of quality, according to a Variety exclusive.
- The company plans to use algorithms to match the proper bitrate for each title in its library, instead of relying on a generic download formula. The change will allow encoding servers to deliver better resolution quality and speed on both the high end and low end of broadband services.
- Perhaps just as important as the improvements anticipated for Netflix subscribers, the tension between the streamer and cable companies could be reduced. The upcoming technology could also help Netflix chart an easier path to grow rapidly in some developing markets.
Dec. 16, 2015, 7:52 AM
- Netflix (NASDAQ:NFLX) disclosed that House of Cards season four will be available for streaming on March 4 during a clever tie-in during last night's GOP debate.
- The series is typically the most highly-anticipated of the company's lineup of original content series and is a linchpin to the "must-have" Netflix strategy.
- House of Cards trailer
- NFLX +0.50% premarket to $119.19.
Dec. 10, 2015, 9:28 AM
- Netflix (NASDAQ:NFLX) scored more Golden Globe nominations than any of the broadcast networks with a tally of eight.
- Amazon (NASDAQ:AMZN) did well with series Transparent and Mozart in the Jungle nominated.
- Hulu landed its first Golden Globe nomination with the comedy Casual up for best comedy/musical award.
- HBO (NYSE:TWX) leaned on Silicon Valley, Game of Thrones, and Veep for solid representation.
- Nearly missing in action were ABC (NYSE:DIS), CBS (NYSE:CBS), and NBC (NASDAQ:CMCSA) which lost ground to streamers and smaller cable networks.
- The movie studio with the most nominations was 20th Century Fox (NASDAQ:FOXA) with 12. The Martian and The Revenant are both in line for some hardware for Fox.
- Golden Globes nominations full list (.pdf)
Dec. 8, 2015, 1:21 PM
- Netflix (NASDAQ:NFLX) is now +1.5% after some early nervous trading following Amazon's launch of a Prime Video subscription service.
- There's been plenty of debate over the company's plan to double down on original series and add more feature films. By appearances, an already fragile relationship between Hollywood and Netflix has turned testier.
- A positive review in The Hollywood Reporter bodes well for new Netflix kids series F is for Family. The series begins streaming on December 18.
- Previously: Netflix hints at interest in sports during conference presentation (Dec. 7)
- Previously: Amazon launches Prime video subscription platform; Netflix -3.4% (updated) (Dec. 8)
Dec. 8, 2015, 9:29 AM
- Amazon's (NASDAQ:AMZN) Streaming Partners Program is separate from its well-known Prime Video streaming service, and provides Prime subs with discounted prices and free trials for a slew of 3rd-party online subscription video services.
- Initial partners include Showtime and STARZ, each of which are available to Prime subs for $8.99/month. Others include A+E Network's Lifetime Movie Club, AMC's Shudder and SundanceNow Doc Club, Tribeca Short List, Ring TV Boxing, and Korean drama site DramaFever. (the full list)
- Presumably in exchange for a cut, Amazon handles subscriber acquisition, billing, and customer service, provides a common watch list across subscriptions, and (perhaps with recently-acquired Elemental Technologies' help) delivers partner content via its infrastructure. Users are able to sign up via existing Amazon accounts.
- Streaming analyst Dan Rayburn previously reported Amazon was talking with content partners about a live streaming service. Meanwhile, Bloomberg has reported of talks with the likes of CBS and NBCUniversal about an online TV service.
- Netflix (NASDAQ:NFLX), which competes to varying degrees with many of Amazon's partners, has dropped to $121.10 premarket amid a 1.2% drop for Nasdaq futures. Amazon is down 1% to $663.05.
- Update (9:46AM ET): Netflix has quickly pared its losses: Shares are now down 0.6%.
- Update 2 (10:37AM ET): Re/code reports Amazon "intends to package some of the services it is selling individually into different bundles, presumably at a discount from the normal per-channel price."
Dec. 7, 2015, 11:56 AM
- Netflix (NFLX -2.4%) is lower after execs presented at the UBS Global Media and Communications Conference. Shares initially moved higher to set yet another all-time high before backtracking.
- Chief Content Officer Ted Sarandos detailed the 31 original series and 10 feature films slated to be on the streaming menu next year. Comedy specials will also be a key feature in 2016.
- The most interesting reveal was the hint from Sarandos that the company would consider an entry into sports through its own league.
- The biggest negative from the presentation may have been the warning on the difficulty of striking global licensing deals with programmers.
- UBS conference webcast
Dec. 2, 2015, 12:48 PM
- Netflix (NFLX +3.5%) crossed over $130 for the first time today as a new all-time high was set once again. The YTD return on the streamer stands at +166%.
- Some analysts think the stock is benefiting from the company's simple selling model which doesn't get tied down with retail overhangs. There is also new data out this week that underscores that the younger generation is moving straight into streaming services while bypassing traditional cable, perhaps at an even higher rate than forecast.
Nov. 25, 2015, 9:26 AM
- The average price for a gallon of gas in the U.S. has now dropped to $2.06 per gallon - a mark that is 27% lower than where gas prices stood heading into the holiday period last year. Despite the extra dollars in the wallets of consumers, most forecasts for holiday retail sales are on the modest side (below 4%).
- The extended period of sub-$3 gas prices in the U.S. hasn't exactly lit consumer spending across broad retail on fire (just ask Wal-Mart) - although it has stoked auto sales for the Detroit Three (GM, F, FCAU). The regional casino sector (ISLE, PENN, BYD, ERI, MTN, MCRI) and cruise line stocks (NCLH, RCL) have also benefited more than major chain stores. Some have suggested that lower gas prices are also an understated driver for Starbucks (NASDAQ:SBUX) and Netflix (NASDAQ:NFLX) which both score high on customer stickiness.
- What next? Seeking Alpha's Stock Pitch Contest on retail is still open until November 30 amid the reset on consumer spending expectations. Current long ideas include PLAY, FRAN, CASY, SKX, WMT, PSUN, HGG, PRTY, TJX, TA, VSTO - while short bets on WMAR, TIF, RT, AMZN, UA, LB, and OUTR are on record.
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Nov. 20, 2015, 7:21 PM
- A new study tries to pierce the veil over Netflix's "ratings" in comparison to its peers, and finds them wanting compared to HBO (TWX -0.4%) -- though likely due to one big series.
- Parrot Analytics has studied what it calls "demand expressions" to compare original and flagship shows at Netflix (NFLX +3%), HBO and Amazon.com. The metric includes a number of factors, including video streaming, social media, blogging, file-sharing and wiki platforms.
- HBO and Netflix held all the top 10 spots for September in Parrot's analysis: Game of Thrones on top with 28.2M expressions, with Netflix's Narcos second at 14.3M. Meanwhile, Amazon shows held spots 11-15.
- Rounding out the top five were Netflix's Orange is the New Black (nearly 8M expressions), HBO's True Detective (7.8M) and HBO's Silicon Valley (6.3M).
- But take Game of Thrones out of the measurements, Parrot says, and HBO and Netflix have virtually the same demand.
Nov. 19, 2015, 8:00 AM
- PepsiCo (NYSE:PEP) advertising jumped into the plot of Fox show Empire last night when a key character is offered a Pepsi endorsement.The plot development will continue into future episodes.
- Sources indicate the company paid $20M for an advertising arrangement that includes the Pepsi plot placement and traditional TV spots.
- Advertisers are exploring new ways to integrate products into content due to the higher percentage of viewers that are skipping commercials. The Pepsi deal with Empire is a considerable jump up from the traditional automobile or beer placement arrangement.
- Perhaps a little bit below the radar, Netflix (NASDAQ:NFLX) has already been accepting product placement deals for original content series, including ones for large advertisers such as Anheuser-Busch and Samsung.
Nov. 17, 2015, 2:43 PM
- Amid a stressed-out media market, Pacific Crest's Andy Hargreaves still has a positive view of TV networks in the near term, and points to is "favorite longs" in the space: AMC Networks (AMCX +3.5%), Twenty-First Century Fox (FOX -1.1%, FOXA -0.9%), and Netflix (NFLX +3.8%).
- He's got Overweight ratings on all three. Fox should benefit from sustainable pricing power from its sports assets as well as improving global profitability; meanwhile, Netflix is proving to be "right" about the direction of media distribution, and while competitor's efforts are likely to dilute margin, it's still got a dominant position in streaming, he writes.
- He has a price target of $140 on Netflix (21% upside from current price) and $35 on FOXA (16.6% upside).
- On the he said/she said debate over the quality of AMC's programming assets, Hargreaves likes what it's got in The Walking Dead ("the biggest show on TV") as well as Better Call Saul and the promising Fear the Walking Dead. Ad revenue looks to be skewing more heavily to top content, he says, threatening other companies with "broader bases of good (but not great) content."
- His price target for AMCX is unchanged at $85 (7% implied upside from current).
Nov. 17, 2015, 2:37 PM
- Netflix (NASDAQ:NFLX) is up another 4.4% on heavy volume to follow up on yesterday's strong rally. Shares are now at a three-month high on the momentum move.
- There were some reports of strong early subscriber numbers out of Australia earlier this week and news that Soros Fund Management holds a long position in NFLX. Also in the background is the potential impact of the Paris attacks on streaming numbers in Europe.
- Previously: Einhorn cuts MU and AMAT stakes, exits LRCX, enters GRMN (Nov. 17)
- Previously: Strong start for Netflix in Australia (Nov. 16)
Nov. 16, 2015, 7:49 PM
- In its 13F filing, Soros Fund Management revealed it's bailed out on its Herbalife (NYSE:HLF) bet by liquidating a near 2M-share position in Q3 -- likely at a profit -- and added stakes in Netflix (NASDAQ:NFLX) and Wynn Resorts (NASDAQ:WYNN), as well as boosting Allergan (NYSE:AGN) as its top holding.
- Herbalife is up almost 47% YTD as Soros and Carl Icahn lined up on the long side against bearish investors including Bill Ackman. The Soros fund also reduced its put holdings on the S&P 500, to 836K shares from 2.9M.
- Behind the Allergan add, Soros disclosed a $137.5M investment in PayPal (NASDAQ:PYPL) and ended the quarter with a $32.8M investment in Netflix, as well as $9.9M in Wynn.
- Aside from Allergan, the Soros Fund's biggest holding was in Adecoagro (NYSE:AGRO).
- Overall market value of the Soros holdings dropped to $6.61B, from $10.75B.
Nov. 16, 2015, 3:24 PM
- Netflix's (NFLX +6.9%) subscriber numbers in Australia look very strong, according to data from the Australian Communications and Media Authority.
- The streaming service drew in 2.5M adults as viewers in the first six months of the year for a penetration rate of 14%. Netflix was only active in Australia for the last four months of the six-month period.
- Estimates for Netflix Australia subscribers range from 600K to 1.4M.
- Netflix is back over $110 after fading late last week.
Nov. 13, 2015, 3:14 PM
- Netflix (NASDAQ:NFLX) is down another 4.2% today, following on yesterday's 3.5% decline as news broke that Time Warner might be buying into Hulu alongside Disney, Comcast and Fox.
- Another sign of a still-stewing battle with its content providers: Grumbling among networks that Netflix has been too happy to strip any original network identification from shows it buys, including Madame Secretary from CBS or New Girl from Fox, while prominently stamping shows like House of Cards and Orange is the New Black with "A Netflix Original Series."
- ABC's How to Get Away With Murder is now a notable exception, getting a four-second pre-roll promotion with prominent network logo and music before the show begins.
- Netflix used to take a hard line on including network branding on "title cards," the small images that identify shows for selection on the service, but that issue has quietly died down as logos now appear regularly.
- The new stance is an atypical one for networks: Traditionally, reruns of programs haven't carried their original networks' logos or branding.
- Previously: Hulu-Time Warner deal: A four-way strategic play, if it happens (Nov. 12 2015)
- Previously: WSJ: Hulu looking at stake sale to Time Warner valuing it at $5B-$6B (Nov. 12 2015)
Nov. 12, 2015, 6:57 PM
- If Hulu sells a stake to Time Warner (NYSE:TWX), it would be an equal partnership with existing co-owners, meaning it would draw down the stakes of the other three -- Disney (NYSE:DIS), NBCUniversal (NASDAQ:CMCSA) and Fox (FOX, FOXA) -- to 25% each.
- The move would definitely be a strategic play against Netflix and Amazon.com for the service, which has gotten increasingly active in the past year with new subscription models and aggressive moves into original programming and licensing products away from competitors. Content spending reportedly went to $1.5B this year from $600M in 2014.
- Time Warner wouldn't just be putting in cash, it would be committing to license content beyond what it's already sold. Time Warner owns TV powerhouse Warner Bros. along with HBO, and Turner Broadcasting and its properties.
- It suggests that a sale in whole that was discussed in 2013 is further off the table now. The WSJ reports that the current (preliminary) talks value Hulu between $5B and $6B.
- Nervous content owners may favor a stronger Hulu and its closer relationship to existing TV vs. Netflix (NASDAQ:NFLX), which they feel is accelerating cord cutting and lowering ratings. Netflix, which fell into the close down 3.5%, is off another 0.8% after hours.
- Previously: WSJ: Hulu looking at stake sale to Time Warner valuing it at $5B-$6B (Nov. 12 2015)
- Previously: With programming buildup, Hulu's losses increase (Nov. 06 2015)
- Previously: Hulu CEO: No current ambition for original movies, overseas expansion (Oct. 15 2015)
Netflix, Inc. operates as an Internet subscription service company, which provides subscription service streaming movies and TV episodes over the Internet and sending DVDs by mail. The company operates its business through three operating segments: Domestic streaming, International streaming and... More
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