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Mon, Jan. 4, 3:30 PM
- Pacific Crest's Andy Hargreaves is expecting a strong year for media networks and is still bullish on a subset of network stocks as top sector picks for 2016: Twenty-First Century Fox (FOX -2.8%, FOXA -2.7%), AMC Networks (AMCX +0.1%), Netflix (NFLX -5%) and Time Warner (TWX -0.3%).
- Hargreaves has Overweight ratings on all of them. He had called out AMC, Fox and Netflix for praise in the past.
- After a tough year for media stocks, he believes fundamentals are lining up for 2016, including election-year advertising, amid lowered market expectations.
- The group's average multiple is close to historical averages and below the broader market, "which creates a slightly positive risk/reward around valuation, in our view."
- Two possible negative catalysts come if negotiations between Viacom (VIA -2.2%, VIAB -1.6%) and Dish Network (DISH -0.4%) take a bad turn, and if Thursday Night Football bidding follows a trend of skyrocketing sports rights costs.
- Previously: Pacific Crest on media: Strong on AMC Networks, Fox, Netflix (Nov. 17 2015)
Mon, Jan. 4, 7:55 AM
- Netflix (NASDAQ:NFLX) is down sharply in early trading after taking on a downgrade from Baird.
- Baird shifts to a Neutral stance on Netflix on concerns over U.S. subscriber growth. The investment firm sees Netflix's risk/reward profile balanced at current levels.
- Baird lowers its price target on NFLX to $115 from $128.
- NFLX -4.33% premarket to $109.45.
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
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. 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. 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)
Oct. 15, 2015, 9:13 AM
Oct. 14, 2015, 4:19 PM
- Netflix (NASDAQ:NFLX) announces 880K net subscribers were added in the U.S. during Q3 to miss guidance for 1.15M adds. A higher-than-unexpected involuntary churn impacted the subscriber tally.
- International net subs added were 2.74M vs. 2.40M guided and 2.46M consensus.
- Total Netflix memberships are up to 69.17M.
- Guidance for Q4 of 2015 is for 1.65M U.S. adds and 3.50M global.
- Q3 total streaming contribution margin was 17.5% vs. 17.1% expected and 16.7% in Q2. The contribution margin rate in the U.S. was 32.4% vs. a forecast for 32.6%.
- Netflix says it will continue to target a 40% contribution rate in the U.S. and sees mix and pricing added to profitability on the international side over the next few years.
- Q3 shareholder letter (.pdf)
- Previously: Netflix misses by $0.01, misses on revenue (Oct. 14)
- NFLX -7.91% after hours to $101.52.
Oct. 8, 2015, 6:33 PM
- HBO (TWX +1.6%) is expanding south, with plans to launch HBO Go as a stand-alone service in Latin America and the Caribbean, taking a more direct competitive path against Netflix (NFLX +6.3%).
- HBO Latin America will set pricing market by market depending on distribution partners. Viewers will have the ability to set Spanish, Portuguese or English as a default language, along with live linear HBO and in-language audio tracks and subtitles.
- Netflix, in the middle of its own international push, already offers service to 43 Latin American/Caribbean countries and territories, including Brazil and Mexico.
- The network also announced that it's made its HBO Now service available to Roku devices in the U.S.
- Previously: Netflix international growth seen as outpacing guidance (Oct. 07 2015)
- Previously: Analyst: HBO Now hits 1M-subscriber mark (Jun. 29 2015)
- Previously: HBO Now cracking down on non-U.S. usage (Apr. 21 2015)
Oct. 8, 2015, 1:29 PM
- Netflix (NASDAQ:NFLX) is hiking the price of its standard streaming service (supports two viewers at a time) by $1/month to $9.99 for new customers in the U.S., Canada, and parts of Latin America. Existing customers will have grace periods of varying lengths. Pricing for the less popular 1-viewer/no HD and 4-viewer/4K plans isn't affected.
- Netflix also carried out a $1 price hike last year, while promising existing customers won't see a hike for two years. A €1 hike for European subs was enacted in August.
- With Netflix having guided for 69.1M global subscribers at the end of Q3, a $1/month hike for the company's entire subscriber base would (in theory) generate over $800M in annual revenue. The additional funds could help pay for streaming content obligations that totaled $10.1B at the end of Q2.
- Shares have spiked higher after previously trading down as much as 5.1%.
Sep. 24, 2015, 2:56 PM
Sep. 1, 2015, 12:01 PM
- Ahead of the vaunted launch of Netflix (NFLX -6.3%) service in Spain next month, Vodafone Spain (VOD -1.7%) has signed a deal to become the first pay TV provider to offer Netflix in the country.
- Vodafone says it can deliver Netflix's app to subscribers without a set-top box update. Perhaps more important for subscribers, they'll have an integrated search engine for programming on Vodafone's service, and Netflix offerings will be part of the recommendations section.
- Netflix has been stacking up deals with (smaller) pay TV providers, including Cogeco's Atlantic Broadband earlier this summer, Cable One, Mediacom, Suddenlink and Grande Communications.
- Previously: Netflix sets October for delayed launch in Spain (Jun. 03 2015)
- Previously: Netflix eyes tough market in Spain (Mar. 08 2015)
Sep. 1, 2015, 9:13 AM
Netflix Inc operates as an internet television network providing TV shows & movies which include original series, documentaries & feature films. The Company's business segments are Domestic streaming, International streaming and Domestic DVD.
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