johngonole

5 Key Quotes from Netflix on the Movie Distribution Business

This segment like software and hardware will be very unpredictable. I think download streamed movies is going to be a lot like VHS versus Beta. The long term winners will only reveal themselves in time. First the competition will be stiff with many players involved. Your going to have the cable companies, apple, amazon, tivo, blockbuster, other media companies all try to get a share of this market. Second who knows when another disruptive technology might evolve. Satelite beams direct movies....who knows.

One thing is that the deal with XBOX is smart. Microsoft has spent lots of money positioning themselves to be the future home entertainment company of America. They want computers with their software to control homes and access to the internet. You see this with the Xbox and Media versions of their operating systems. They will eventually turn the TV/computer/gamesystem... lighting controls/voice recognition into the same thing in the same box.

So Netflix has chosen a good strong partner here. Likewise Microsoft needs a win soon and they must have found some good reasons to piggyback and use Netflix as part of their platform.

Disclosure: I own shares of microsoft but not netflix. Netflix in my opinion is way over valued considering the uncertainties and the finite nature of their main business.