Netflix: No Thanks - We'll Have Level 3 Instead
Focus Equity • 61 Comments
Focus Equity • 61 Comments
Thu, Jun. 2, 3:13 PM
- IMAX (IMAX -0.2%) CEO Richard Gelfond gave some insight during an interview with The Hollywood Reporter about his company's experiment with Netflix (NFLX -0.5%) on the release of Crouching Tiger 2.
- "I learned from the experiment that there isn't an appetite among exhibition for day-and-date delivery of movies over Netflix with theatrical distribution," said Gelfond.
- The IMAX chief added that it was unlikely that a new day-and-date movie deal would be set up with Netflix, although the company would consider a TV series in the format.
- IMAX was considered by some the company most likely to assist Netflix with its big screen ambitions.
- Full Gelfond interview with The Hollywood Reporter
Thu, May 26, 9:27 AM
- Netflix (NASDAQ:NFLX) is up 3.7% premarket, and Time Warner (NYSE:TWX) up 0.9%, after the two were linked as takeover targets in a story about Apple's (NASDAQ:AAPL) content ambitions.
- The Financial Times reports that Apple exec Eddy Cue raised the idea of buying Time Warner at a meeting with the company's head of corporate strategy at the end of last year.
- Those ideas didn't get to Apple chief Tim Cook or Time Warner CEO Jeff Bewkes, sources told the FT, but the story does suggest Apple may not be content just talking about licensing others' content for a future TV service.
- Meanwhile, several bankers suggest to the FT that Netflix is a more likely target for Apple, since an Apple service could then still support a wider range of content makers.
- Several media companies would be bad targets for Apple because of dual-share structures that favor founders or family ownership (like Comcast, Fox, CBS, and Viacom). Notable exceptions to that concern are Time Warner and Walt Disney (NYSE:DIS).
Wed, May 25, 11:13 AM
- The European Commission proposes a set of rules that would require Netflix (NFLX +0.7%) and other online video providers to help finance films made in Europe.
- The regulatory framework would allow member nations to collect payments from on-demand players based outside of their borders to support domestic production.
- Streaming services such as Amazon (AMZN +0.5%) Prime and Netflix would also be required to devote 20% of their library to European content - a level currently cleared by both services.
- The threat of EC intervention has been a known overhang over Netflix and Amazon Prime for quite a while.
- Full EC statement
Mon, May 23, 2:54 PM
- Netflix (NFLX +1.9%) trades higher with a pair of bullish notes out from Wall Street and an update from the company on it Disney exclusivity deal.
- UBS backs a Buy rating and $141 price target on the streamer based off its assessment on where Netflix stands in Europe amid "intense" competition.
- RBC Capital has an even deeper dive with a user survey indicating high usage, satisfaction, and churn aversion rates in the U.S. The response from users in Germany and France was also encouraging, with the penetration rate in the two markets topping 16% off of a base increasingly willing to pay for streaming content. Add it all up and it's "more evidence that the NFLX value proposition has universal appeal," writes analysts Mark Mahaney.
- Netflix sets a timetable to its Disney deal by disclosing that from September forward it will be the exclusive U.S. pay-TV outlet for new Disney, Marvel, Lucasfilm, and Pixar films. Those studios combined push out a meaningful percentage of the top U.S. blockbusters.
Sun, May 22, 6:09 PM
- The U.S. box office continues to stay ahead of last year's pace after Angry Birds and Captain America: Civil War performed well over their opening weekend. Both films were comfortably over $30M level (domestic) for the weekend.
- Next week could be even stronger with X-Men: Apocalyse set to debut. The superhero mashup has already earned more than $100M in the 75 global markets where it has opened (ranking #1 in 71 markets).
- The U.S. box office YTD tally of $4.229B through May 22 is up 5.6% from the level of last year and 11.7% higher than the running total in 2014 through the same weekend.
- Looking ahead, exhibitors hope to cash in even more on theater and format upgrades after reporting strong concessions revenue growth in Q1 (AMC was a leader with a 21% Y/Y jump or +6% per patron). Movie ticket prices have also trickled higher, averaging $8.58 this year sector-wide.
- Looking even further ahead, despite some dabbling with a shortened release window and Netflix (NASDAQ:NFLX) introducing some movies on the big screen, the industry has stayed relatively consolidated in preventing a major disruption to its model such as the The Screening Room (see prior coverage) aims to unveil.
- Related stocks: CKEC, AMC, CNK, RLD, IMAX, RDI, MCS, NCMI.
Thu, May 19, 4:02 AM
- Netflix (NASDAQ:NFLX) and Amazon's (NASDAQ:AMZN) video streaming services could be forced to devote "at least" 20% of their catalogs to European films and TV shows as part of an overhaul of EU broadcasting rules.
- Under a Brussels plan to be unveiled next week, video-on-demand groups would also be obliged to "ensure prominence" of any European works, FT reports.
- Netflix has already warned that rules requiring a minimum of European content would distort the market and create a "perverse incentive" for operators to buy cheap titles.
Sat, May 14, 11:01 AM
- The retail sector stays in focus next week with Target (NYSE:TGT), Wal-Mart (NYSE:WMT), TJX Companies (NYSE:TJX), and Ross Stores (NASDAQ:ROST) all due to report on Q1 earnings to follow on a week of dismal reports and guidance from the department store sector (Nordstrom, L Brands, Macy's, Kohl's). Home improvement chains Home Depot (NYSE:HD) and Lowe's (NYSE:LOW) are also due to spill numbers.
- The story from the Commerce Department's April read of retail sales (+3.0% Y/Y, +1.3% M/M) is one of a consumer spending on housing, entertainment, and personal care/fitness over apparel and general merchandise. The 10% Y/Y gain in the nonstore retailer category also tipped that the Amazon (NASDAQ:AMZN) Effect is magnifying.
- Amplify ETFs CEO Christian Magoon tells Seeking Alpha that the traditional retail model appears to be broken. Amplify's Online Retail ETF (NASDAQ:IBUY) is a bet on companies such as Netflix (NASDAQ:NFLX), GrubHub (NYSE:GRUB), Blue Nile (NASDAQ:NILE), and Shopify (NYSE:SHOP) that are reeling in millennial dollars.
- Magoon on retail: "Traditional retailers face the headwinds of higher cost structures including the very real threat of increasing wages in the form of the $15 minimum wage campaign. Less flexible with inventory management, they also are more vulnerable to issues like weather and changing consumer preferences."
- Retail ETFs: XLP, XLY, VDC, XRT, VCR, RTH, RETL, FXG, PBJ, IYK, FXD, IYC, RHS, FDIS, PEJ, FSTA, PSL, SCC, RCD, UCC, PEZ, PMR, PSCC, UGE, PSCD, SZK, BITE.
- Apparel stocks: KATE, ANN, LULU, PVH, VNCE, CRI, UA, HBI, VFC, COLM, GIL, SQBG, JCP, KSS, DDS, M, JWN, ARO, AEO, ANF, WTSL, TLYS, CACH, ZUMZ, PSUN, EXPR, BKE, GIII, SQBG, HBI, VRA, ICON, SHOO, PERY, DXLG, BONT, GES, URBN, RL,GIL, NKE, OXM, HBI, VNCE, PERY, ICON, FL.
Fri, May 13, 8:04 AM
- Consumers will be able to access their online subscriptions for services like Netflix (NASDAQ:NFLX) when they travel across the EU under proposals that were tentatively agreed to by member states, and likely will be approved by ministers on May 26.
- Knocking down barriers to a single market in both the online and offline worlds is a key aim for Brussels, and is reminiscent of its efforts to permit the use of domestic mobile phone subscriptions across the bloc without paying hefty roaming charges.
- NFLX -1% premarket
Thu, May 12, 10:07 AM
- Some Netflix (NFLX -3.2%) users on Slickdeals.net are posting that price increases expected to have been rolled out this month have been pushed into June.
- ABC News reports that the current Netflix price updates are based on member billing periods. E-mails go to users impacted by a price hike about 30 days before the rate change which may explain some of the variance.
- The question of how many Netflix customers will cancel their service due to the price hikes and the net impact on profit is hotly debated. Two articles on Seeking Alpha that dig into the issue: Netflix Vs. Amazon Prime Video: A Market Of Value Proposition and Netflix: Cancellation Estimates Due To The Price Hike Are Overblown.
Wed, May 11, 12:28 PM
- "The mall is not dead, it has just moved online," asserts EQM Indexes CEO and SA contributor Jane Edmondson. Though her analysis is not entirely new, it's certainly well-timed amid a battering of mall-based chains this week (see reports on L Brands, Gap, and Macy's for some of the carnage details).
- EQM licensed its online retail index to ETF provider Amplify Investment for use in the new Amplify Online Retail ETF (NASDAQ:IBUY).
- The online retail ETF lists Copart (NASDAQ:CPRT), NutriSystem (NASDAQ:NTRI), PetMed Express (NASDAQ:PETS), Shutterfly (NASDAQ:SFLY), Amazon (of course), PayPal (NASDAQ:PYPL), Stamps.com (NASDAQ:STMP), Grubhub (NYSE:GRUB), Overstock.com (NASDAQ:OSTK), FTD Companies (NASDAQ:FTD), Wayfair (NYSE:W), Netflix (NASDAQ:NFLX), Priceline (NASDAQ:PCLN), and Lands End (NASDAQ:LE) as top holdings.
- The fund has only traded for a few weeks, but could catch some attention with the ground shifting underneath traditional retail.
- Earlier today, the Global Millennials Thematic ETF (NASDAQ:MILN) was highlighted. This ETF shares some of the same holdings as the online retail play and has Amazon as its top holding.
- Complete list of Amplify Online Retail ETF holdings
- Previously: Amazon rambles to all-time high amid retail chaos (May 11)
Thu, Apr. 21, 1:49 PM
- Harris names its top brands of 2016 based off of consumer polling and other measurements of brand strength over time.
- Category winners included Lexus (NYSE:TM), Macy's (NYSE:M), Regal Cinemas (NYSE:RGC), Hilton Hotels & Resorts (NYSE:H), Cabela's (NYSE:CAB), Pizza Hut (NYSE:YUM), Southwest Airlines (NYSE:LUV), and Dunkin' Donuts (NASDAQ:DNKN).
- Rapid risers in brand equity included Moe's Southwest Grill (Chipotle effect?), Netflix (NASDAQ:NFLX), and Sony (NYSE:SNE).
- Complete list of Harris Brands of the Year
Tue, Apr. 19, 12:49 PM
Tue, Apr. 19, 9:17 AM
Tue, Apr. 19, 9:02 AM
- Investors are taking a harder look at Netflix (NASDAQ:NFLX) with some U.S. subscriber growth deceleration expected and coming into a tough Q2 comparison on the global front due to last year's launch in Australia and New Zealand.
- A key point with Netflix is forecasting the penetration limit in the U.S. The company thinks that number ranges as high as 90M houses, while Guggenheim puts it at 60M to 70M. Drexel Hamilton sees a 55M to 60M mark as more likely. The extremes in the subscriber forecasts, soon to be also seen on the global front as it matures, make Netflix analysis a tricky proposition at best.
- During the conference call, CEO Reed Hastings gave credit to Amazon, HBO, and Showtime with the content battle heating up. He also cited the "great work" at Hulu which has positioned itself below the Netflix pricing point and has run off a string of well-received original content series. By all appearances, Hastings also appears to be a big fan of the HBO Now service.
- Netflix earnings call transcript
- Netflix is down 8.69% premarket to $98.98.
- Now read the latest post-earnings breakdowns on Netflix from Seeking Alpha writers.
Mon, Apr. 18, 5:40 PM
Mon, Apr. 18, 4:19 PM
- Netflix (NASDAQ:NFLX) announces it brought in 2.23M net subscribers in the U.S. during Q1.
- International subscribers net growth tallied 4.51M net as the company swept into new territories. The combined total missed the consensus estimate from analysts.
- Total Netflix memberships at the end of the quarter were 81.50M to top guidance from Netflix for 80.86M subs.
- Q1 total streaming contribution margin rose 80 bps Q/Q to 17.0%. The contribution margin rate in the U.S. where the Netflix business is more established hit 35.5%
- Guidance for Q2 is for 500K U.S. adds and 2M global. Some analysts are already down with forecasts for +4M for the quarter.
- Netflix says original content debuting on the service helped push up the U.S. subscriber number. The company expects only a moderate increase in churn due to higher pricing from the "un-grandfathering" of older customers.
- There is no material update on China.
- Q1 shareholder letter (.pdf)
- NFLX -11.6% after hours to $98.88 after a 2.8% decline during the day session.