Nov. 10, 2014, 10:50 AM
- In a win for net neutrality proponents, Pres. Obama is calling for the FCC to "reclassify consumer broadband service under Title II of the Telecommunications Act," thereby treating it as a utility subject to common-carrier regulations originally set up for wireline phone networks.
- Obama does qualify his statement by adding the FCC should forbear from "rate regulation and other [Title II] provisions less relevant to broadband services." However, he also calls for prohibitions on the blocking or throttling of legal content, and (notably) on the creation of paid-prioritization (i.e. fast lane) deals between content providers and ISPs.
- Also: Obama wants the FCC to enforce these policies for wireline and mobile networks, albeit while "recognizing the special challenges that come with managing wireless networks." Prior neutrality rules (shot down earlier this year) only covered wireline networks.
- The proposal is much more aggressive than the one recently floated by FCC chairman Tom Wheeler: He argued for regulating back-end connections between content providers and ISPs under Title II rules, but not doing so for last-mile consumer broadband connections, thus leaving the door open for paid-prioritization.
- Netflix (NFLX +1.1%), which has been vocally pushing for tougher neutrality rules as it squabbles with ISPs over peering payments, streaming speeds, and alleged throttling, has to be pleased.
Oct. 31, 2014, 12:29 PM
- In a compromise proposal that could give both ISPs and net neutrality proponents much to complain about, the FCC plans to lightly regulate consumer broadband services - they'd be classified as a "retail" service - but also tightly regulate connections between sites and ISP networks under common carrier (i.e. Title II) rules originally created for phone networks.
- The back-end rules could go over well with Netflix (NFLX +2.7%), which has reluctantly struck paid peering/interconnection deals with major ISPs to guarantee high streaming speeds. Reed Hastings has been vocally calling for tougher neutrality rules. Cogent's (CCOI +0.8%) shares tumbled after Netflix struck its first paid peering deal (with Comcast).
- The last-mile rules, however, appear to leave the door open for ISPs to charge Internet companies extra for paid priority/fast-lane access, an idea previously floated by FCC chairman Tom Wheeler. Comcast, Verizon, and AT&T recently declared they have no plans to strike fast-lane deals.
- Neutrality proponents question the ability of a hybrid proposal to withstand legal challenges. "The FCC would lose in court a third time," says Stanford law prof. Barbara van Schewick.
Oct. 29, 2014, 1:22 PM
- A bid by Aereo to be defined as a cable provider gained support from the FCC with a new proposal out this week which was described in a blog post written by Chairman Tom Wheeler.
- The agency supports "open access" for consumers to high-speed broadband delivery and the right of over-the-top firms to offer programming owned by pay-TV providers and broadcasters.
- In essence, the FCC thinks the bundled pay-TV model should be broken so that consumers will not be forced to pay for channels they never watch.
- What to watch: Though Aero isn't likely to be the ultimate pay-TV disrupter without the deep pockets to license content, the position of the FCC opens the door for other Internet video players to emerge and chips away at the bundled channels model.
- Related stocks: DISH, DTV, CMCSA, CHTR, CVC, TWC, VZ, T, NFLX.
Oct. 27, 2014, 11:53 AM
- BTIG Research is out with a new research note in which it reports that Verizon is offering FiOS customers a free year of Netflix (NFLX -1.7%) service and a $150 gift card if they sign up for the company's triple play service.
- Further review of the deal by DSLReports.com indicates the offer is limited to New York City customers for only a limited sign-up period.
- What to watch: Though the promotion isn't widespread or lasting, it indicates some capitulation from the pay-TV side on Netflix as a staple.
Oct. 24, 2014, 1:48 PM
- RBC is out with a forecast on which studios will make the most money in 2015 from selling off-network series to SVOD concerns such as Netflix (NASDAQ:NFLX), Amazon Prime (NASDAQ:AMZN), and Hulu.
- CBS Studios (NYSE:CBS) leads the pack at $179M, while Warner Bros. (NYSE:TWX) is expected to bring in $106M and Lion's Gate (NYSE:LGF) about $61M.
- Sony Pictures TV (NYSE:SNE), Fox (NASDAQ:FOXA), and ABC Studios (NYSE:DIS) are pegged to bring in $40M-$43M.
- The overall spend of the top three streamers on older series is expected to rise 31% to $6.8B next year.
Oct. 20, 2014, 7:51 AM| 3 Comments
Oct. 17, 2014, 2:26 PM
- Moody's calls the decision by CBS (CBS +2.3%) to move forward with a streaming service another step forward in the "transformation" of content delivery.
- The ratings agency thinks the product will be attractive to millennials and cord nevers, but is undermined a bit by not including NFL broadcasts.
- In an interesting pullout, Moody's predicts the service won't have a material impact on subscriber demand for SVOD concerns such as Netflix (NFLX -2.2%), Hulu, and Amazon Prime (NASDAQ:AMZN).
- Moody's also point out that content providers will have the ability to set restrictions on content delivery in order to maximize revenue streams. Disney's (DIS +2.6%) ESPN comes to mind.
Oct. 17, 2014, 11:49 AM
- Mark Cuban on Twitter: "I'm buying NFLX stock. At half of YHOO, 10B<Twitter and small pct of major media companies, Someone will try to buy them."
- Netflix (NFLX -3.8%), which has a current market cap of $20.9B, ticked slightly higher on Cuban's remarks, but continues to sell off for the second day in a row after reporting soft Q3 subscriber adds.
- The outspoken Dallas Mavericks owner has plenty of industry experience: He once sold Broadcast.com to Yahoo for $5.7B, and now controls multiple studios and TV network AXS TV. He was less positive on Netflix back in 2010, predicting (not too accurately) the company would struggle to land deals for high-profile Hollywood content.
Oct. 16, 2014, 12:45 PM
Oct. 16, 2014, 9:13 AM
Oct. 16, 2014, 7:43 AM
- There's a widespread reset of expectations on Netflix (NASDAQ:NFLX) after the company delivers subscriber growth below guidance in Q3 and gets a reality check with HBO stepping into the streaming fray.
- Wedbush: Bearish-leaning analyst Michael Pachter take a victory lap over the sell-off, but also stays focused on the disparity between Netflix's net income and free cash flow. There's $448M over 9 quarters that needs to be sorted out, says Pachter.
- RBC: The long-term thesis on the streaming concern is still intact. PT clipped to $550.
- Piper Jaffray: The "priced for perfection" stock sees its price target reduced to $345 by analyst Michael Olson. Estimates on FY14 and FY EPS are chopped lower.
- Goldman Sachs: NFLX is still a Buy as the investment firm stays focused on revenue growth - instead of the subscriber guidance miss.
- Citigroup: The price target on Netflix is lowered to $365 due to a new set of expectations on growth and competition.
- NFLX earnings coverage: top and bottom lines, earnings report highlights, comments on HBO, conference call breakdown.
- NFLX -25.3% premarket to $335.15.
Oct. 15, 2014, 7:22 PM
- "Our per-member viewing and retention in the US are as strong as ever," Netflix (NASDAQ:NFLX) declared in its Q3 shareholder letter (.pdf), rejecting the view that competition had much to do with its light Q3 subscriber adds. Rather, blame is largely placed on price hikes for new subs.
- Were U.S. penetration rates also a factor? With 37.2M U.S. subs at the end of Q3, Netflix is now used by nearly 1/3 of American households, not counting those getting free access via account-sharing.
- On the earnings Q&A (video), management defended Netflix's aggressive international spending, noting (among other things) the additional scale provided by foreign markets makes it easier to finance big content deals. The company also highlighted Adam Sandler's international appeal, and that of Netflix's original content.
- International markets that launched before 2014 are now "collectively profitable on a contribution basis." However, 2015 margins will be dinged by a higher VAT rate going into effect in January - Netflix expects a 5% European impact on average.
- Q3 U.S. streaming contribution margin was 28.6%, and international margin -8.9%. In Q4, those numbers are expected to drop to 28.4% and -24.5%.
- Other details: 1) Content obligations rose by $1.2B Q/Q to $8.9B. 2) Free cash flow is expected to continue trailing EPS in the coming years due to content spend. 3) The DVD sub base fell by 300K to 6M.
- NFLX -25.8% AH. Q3 results, details.
Oct. 15, 2014, 5:37 PM
Oct. 15, 2014, 4:26 PM
- Netflix (NASDAQ:NFLX) issues a statement on the move by Time Warner to offer HBO as a stand-alone service
- The company spins the move as inevitable and sensible, while predicting both streaming services will prosper as consumers move to Internet TV.
- CEO Reed Hastings has a long history of complimenting HBO, but he will be as eager as anyone to get a better view of how the new HBO streaming product will be marketed and priced.
- Shares of NFLX are down 23.4% in AH trading to $344.10 after Q3 results.
Oct. 15, 2014, 4:08 PM
- Netflix (NASDAQ:NFLX) reports its added 3.02M subscribers in Q3 vs. guidance of 3.69M and a recent history of 1.69M (Q2), 4.0M (Q1), 4.07M (Q4 2013), and 2.73M (Q3 2013) over the preceding 4 quarters.
- The company cites higher subscription prices as a factor in its sub guidance miss.
- Total subscribers rose to 53.06M by the end of the period.
- Total contribution margin ended up at 18.0%, down 50 bps Q/Q.
- U.S. contribution margin +500 bps to 28.6%.
- Q4 sub guidance: 4.00M net additions are expected - 1.85M domestic and 2.15M international.
- NFLX shareholder letter (.pdf)
- NFLX -18.9% AH.
Oct. 15, 2014, 4:06 PM
NFLX vs. ETF Alternatives
Netflix Inc operates as an Internet television network providing TV shows & movies which include original series, documentaries & feature films. The Company has three segments namely Domestic streaming, International streaming & Domestic DVD.
Other News & PR