Netflixation

Streaming From Netflix Will Soon be Even More Convenient With Netflix One-Click Remotes Introduced by Major Consumer Electronics Makers
Members to Benefit with a Netflix One-Click Button on Remote Controls for New Internet Connected TVs, Blu-ray Disc Players and Other Devices that Stream from Netflix

LOS GATOS, Calif., Jan. 4, 2011 /PRNewswire/ -- Netflix, Inc. (Nasdaq: NFLX) today announced that streaming from Netflix on TVs will soon be as easy as one click of a remote control as a number of the world's leading consumer electronics companies have joined in a development effort to place Netflix-branded one-click buttons on remotes that operate Internet connected TVs, Blu-ray disc players and other devices that connect the Internet to the TV. 

Beginning this Spring, buttons that specify "Netflix" – including some featuring the iconic red Netflix logo – are planned to be situated prominently on remote controls that operate certain new Blu-ray disc players from a variety of companies including Best Buy's in-house Dynex brand, Haier, Memorex, Panasonic, Samsung, Sharp, Sony, and Toshiba.  Sharp, Sony, and Toshiba also will place the Netflix one-click button on remote controls for select new Internet-connected TVs.  Remote controls for the Boxee, Iomega and Roku set-top boxes also will feature the Netflix one-click remote.

"For members who want even more convenience when instantly watching TV shows and movies streaming from Netflix, the answer is about to be right in their hands," said Netflix Chief Product Officer Neil Hunt.  "No more turning on the TV, going to a home screen and searching for the Netflix icon.  With the Netflix one-click remote, it's simply a matter of pushing the Netflix button to instantly watch any of the vast selection of TV shows and movies available to stream from Netflix."

The Netflix one-click remote is the latest in a series of rapid technological advancements by Netflix to enable Netflix members to instantly watch TV shows and movies streamed by Netflix over the Internet.  Today there are more than 250 Netflix ready devices on the market.

About Netflix
With more than 16 million members in the United States and Canada, Netflix, Inc. [Nasdaq: NFLX] is the world's leading Internet subscription service for enjoying movies and TV shows.  For $7.99 a month, Netflix members can instantly watch unlimited movies and TV episodes streaming over the Internet to PCs, Macs and TVs.  Among the large and expanding base of devices streaming from Netflix are Microsoft's Xbox 360, Nintendo's Wii and Sony's PS3 consoles; an array of Blu-ray disc players, Internet-connected TVs, home theater systems, digital video recorders and Internet video players; Apple's iPhone, iPad and iPod touch, as well as Apple TV and Google TV. In all, more than 200 devices that stream from Netflix are available in the U.S. and a growing number are available in Canada.  For more information, visit www.Netflix.com.

SOURCE Netflix, Inc.

by Dr. Netflix Anonymous | posted 12.10.2010

"Dr. Netflix Anonymous here. Do you find yourself Netflixing all the time? You know, that insatiable urge to stream movies and TV shows over the internet to your favorite Netflix-enabled device. Flix after flix. Pulling from your Instant Queue, program after program? I'm here to tell you that you're not alone. Come on in, take a seat. Join your the other Netflix Junkies. We'll commiserate together and see how we can get your life back together... Life, yes, the stuff that goes on around you between Netflix fixes. We'll also talk about how best to enjoy your Netflixation experience. Hey, if you're going to fall off the Netflix sobriety wagon, you might as well enjoy the journey, right? So okay all ready, take a seat. We'll begin our session in a sec."

"Ahem, good evening everyone. My name is Dr. Netflix Anonymous. I'm glad you are all here. We're going to begin our support group for Netflix Junkies, Netflixaholics, or whatever you'd like to call your addiction to Netflix internet streaming. Yes, if you're here, you know you're one of us. The purpose of this support group is to share our experience of that darker part of our lives: where we do the minimum in life to just get by until the next flick, or Netflix that is, excuse me. Without further ado, let's begin this first session with a round of introductions. I'd like to go around the room and ask that each one of you introduce yourselves: your first name will do, tell us how long you've had that urge, how you like your fix served. That's good for now. So let's begin with you over here."

"Hi, my name is John."

"Hi John", the group replies.

John continues, "I have been a Netflix Junkie for about six months now. It all started when I bought a Sony Playstation 3 at the beginning of summer. My main purpose was to use it for gaming, you know. I just felt the Call of Duty. Then, one night, my dudes were over and we were serving together in the Call of Duty. After a while, we got a little tired and decided to watch a movie. Instead of heading out to the video store to pick up something the guys can all agree to, my bud Reed suggested that we give Netflix instant streaming a try. Normally, I would be skeptical. But okay, we gave it try. And that was it. There was no turning back. We picked a war movie and started the instant streaming to my PS3 gaming console. The picture quality was great and the sound was pretty good. I was totally tripped out with the experience. After that night, I downloaded the free Netflix app to my iPod touch. Now everywhere I go, and I mean everywhere, I check for Wi-Fi service. If it's available, I'll just start streaming right then and there. Forget about the gaming apps. And ther'es no need to wait to get home and sit in front of my PS3 to stream from Netflix. When I do get home, I can just resume where I had left off with the iPod touch. What could be better? I find myself watching all sorts of movies now. It's way cool."

Tune in next time to read the next installment of Dr. Netflix Anonymous' support group session...

Disclaimer: The storyline and characters in this blog post are fictional and are intended for entertainment purposes only. Any resemblances to real life personalities are purely coincidental.

posted 12.9.2010

Netflix stock (Nasdaq: NFLX) will be replacing the Office Depot (NYSE: ODP) as a constituent of the Standard and Poor's S&P 500 stock index. NFLX is up in after-hours trading this evening, as S&P 500 index funds are expected to buy NFLX to replace Office Depot causing additional demand for the stock.  The change will take effect after the close of trading on Friday, December 17, 2010. NFLX has been in the S&P MidCap 400.

> Read the S&P press release

Netflix and Disney-ABC Television Group Announce Deal to Stream Array of ABC Network, Disney Channel and ABC Family Shows to Netflix Members
Agreement Includes Prior Seasons of ABC Hits 'Grey's Anatomy,' 'Desperate Housewives' and 'Brothers & Sisters,' plus Favorites from Disney Channel and First-Time Netflix Access to ABC Family Shows

BEVERLY HILLS, Calif. and BURBANK, Calif., Dec. 8, 2010 /PRNewswire/ -- Netflix, Inc. (Nasdaq: NFLX) and Disney-ABC Television Group today announced a new licensing agreement between the two companies that will allow Netflix to stream hundreds of episodes from the ABC Television Network, Disney Channel and – for the first time – ABC Family over the Internet.

The agreement, brokered by Disney-ABC Domestic Television, will add significantly to the growing selection of movies and TV episodes that can be streamed from Netflix.  Once made available to Netflix from Disney-ABC – which, for relevant programming, will be no earlier than 15 days after initial telecast – episodes can be streamed instantly with Netflix memberships starting at $7.99 a month.

Among the highlights, Netflix members will be able to enjoy:

• Prior season episodes of current ABC hit series "Grey's Anatomy,"  "Desperate Housewives" and, for the first time on Netflix, "Brothers & Sisters," all of which are among the network's most successful and popular TV franchises in recent years.
• Every episode of recent ABC favorites "Lost" and "Ugly Betty," the latter making its streaming debut at Netflix.
• Each season of several hit series from ABC Studios, including "Scrubs" and "Reaper," which are both new additions to Netflix.
• A host of content from the Disney Channel, including the hits "Phineas and Ferb" and "Good Luck Charlie," which are also new to Netflix; updated and expanded offerings of "The Suite Life on Deck" and "Wizards of Waverly Place;" and library offerings from the smash hits "Hannah Montana" and "The Suite Life of Zack & Cody."
  A wide range of content from ABC Family, marking the introduction of ABC Family content streaming from Netflix.  Included are the hit series "Greek," "Make It or Break It," "The Secret Life of the American Teenager" and "Melissa & Joey."

"TV content streamed from Netflix has proven to be immensely popular with our members," said Ted Sarandos, the company's chief content officer.  "Adding to our existing Disney-ABC lineup with great network and cable shows, and opening up ABC Family for the first time, are important steps in creating a wide and diverse selection of content Netflix members of all ages can watch."

In addition to the hundreds of TV episodes included in the agreement, Disney Channel and ABC Family movies such as "High School Musical," "High School Musical 2," "Camp Rock," and "Beauty & the Briefcase," as well as new releases "Avalon High," "Camp Rock 2: The Final Jam" and "Revenge of the Bridesmaids," will also be available to watch at Netflix.

About Netflix
With more than 16 million members in the United States and Canada, Netflix, Inc. [Nasdaq: NFLX] is the world's leading Internet subscription service for enjoying movies and TV shows.  For $7.99 a month, Netflix members can instantly watch unlimited movies and TV episodes streamed over the Internet to PCs, Macs and TVs.  Among the large and expanding base of devices streaming from Netflix are Microsoft's Xbox 360, Nintendo's Wii and Sony's PS3 consoles; an array of Blu-ray disc players, Internet-connected TVs, home theater systems, digital video recorders and Internet video players; Apple's iPhone, iPad and iPod touch, as well as Apple TV and Google TV. In all, more than 200 devices that stream from Netflix are available in the U.S. and a growing number are available in Canada.  For more information, visit www.netflix.com.

About Disney-ABC Television Group
The Disney/ABC Television Group is composed of The Walt Disney Company's (NYSE: DIS) global entertainment and news television properties, owned television stations group, as well as radio and publishing businesses. This includes the ABC Television Network, ABC Owned Television Stations Group, ABC Studios, Disney Channels Worldwide, ABC Family and SOAPnet, as well as Disney/ABC Domestic Television and Disney Media Distribution. The Radio Disney network, Hyperion publishing, and the Company's equity interest in A&E Television Networks round out the Group's portfolio of media businesses.

SOURCE Netflix, Inc. 

posted 12.7.2010

Netlix announced today that its Chief Financial Officer (CFO) Barry McCarthy is resigning to pursue outside interests. Mr. Carthy has served in this capacity since 1999 and led the company's initial public offering (IPO) in 2002. David Wells will replace him as the new CFO, effective December 10. Mr. Wells served as the VP of financial planning and analysis, and had reported directly to Mr. McCarthy.

> read Netflix press release (pdf)

Netflixation Perspective: In a time when Netflix is negotiating billion-dollar content deals with Hollywood studios for internet streaming rights, it is not an ideal time to replace the CFO. As we commented yesterday, Netflix may be leveraging such deals with debt. With Netflix potentially going into high debt and a change in CFO, investors may not react well to these risk factors. In fact, as of after the market close today, shares were down 3% in after-hours trading, to just below $183.

Netflixation Disclosure: In the interest of full disclosure, we at Netflixation have not bought any shares of NFLX, yet, at the time of this post. Long or short.

NETFLIX ANNOUNCES CFO BARRY MCCARTHY WILL DEPART, APPOINTS COMPANY FINANCE VETERAN DAVID WELLS TO SUCCEED HIM

LOS GATOS, Calif., December 7, 2010 – Netflix, Inc. [Nasdaq: NFLX] today announced the appointment of company finance veteran David Wells as its chief financial officer to succeed outgoing CFO Barry McCarthy, who has expressed a desire to pursue broader executive opportunities outside the company. The change is effective December 10.

In naming Mr. Wells as CFO, Netflix promotes an executive who has served at the company for nearly seven years and combines both senior analytical and operating experience. He most recently served as vice president of financial planning and analysis, a position in which he reported to Mr. McCarthy and was responsible for strategic planning, forecasting and financial analysis. He earlier headed financial planning and analysis for the company’s operations group, spanning the company’s large DVD and streaming content operations.

“We are lucky to have an executive with David’s proven financial skill and operating impact within the company and I am confident he will continue to serve Netflix extremely well as CFO,” said Netflix Co-Founder and CEO Reed Hastings. “At the same time, we offer both great gratitude and sincere best wishes to Barry. Over the last few years, Barry has balanced his affection for Netflix – and the excitement all of us have felt by the tremendous growth of the company – with his personal desire for broader professional opportunities. Barry concluded that now is the right time to seek out those opportunities, and we will be cheering for him.”

Mr. McCarthy has served as CFO of Netflix since 1999 and led the company’s initial public offering in 2002.

Prior to joining Netflix in 2004, Mr. Wells spent six years in increasingly senior roles at Deloitte Consulting, where he managed consulting engagements in the retail and consumer products industries. Mr. Wells earned an MBA in finance and economics at the University of Chicago’s Booth School of Business and an undergraduate degree in finance from the University of Virginia.

About Netflix
With more than 16 million members in the United States and Canada, Netflix, Inc. [Nasdaq: NFLX] is the world’s leading Internet subscription service for enjoying movies and TV shows. For $7.99 a month, Netflix members can instantly watch unlimited movies and TV episodes streamed over the Internet to PCs, Macs and TVs. Among the large and expanding base of devices streaming from Netflix are Microsoft’s Xbox 360, Nintendo’s Wii and Sony’s PS3 consoles; an array of Blu-ray disc players, Internet-connected TVs, home theater systems, digital video recorders and Internet video players; Apple’s iPhone, iPad and iPod touch, as well as Apple TV and Google TV. In all, more than 200 devices that stream from Netflix are available in the U.S. and a growing number are available in Canada.

posted 12.7.2010

Blockbuster Express kiosks in the limited markets (900 kiosks in San Francisco, Phoenix, Miami, and Atlanta) will test if consumers would be willing to shell out $2.99/DVD for the first night to rent a new release title within the first 28 days of release, before it becomes available for rental from Netflix or RedBox. Blu-ray rentals would be available for $3.99 for the first night. Subsequent nights would cost an additional $1. Warner Bros' Inception is being made available today, while 20th Century Fox's Knight and Day was made available last Tuesday.

As we reported on Nov 22, Blockbuster started an ad campaign entitled "Less Waiting. More Watching", to differentiate itself over its fiercest competitors, Netflix and RedBox.

> read the Associated Press article

posted 12.6.2010

As Netflix stock made new highs over the past couple of weeks and then retraced its steps, it's a stock price tug of war with the NFLX bulls and bears duking it out...

The Bulls
Morgan Stanley analyst Scott Devitt re-iterated his "overweight" rating on NFLX shares today, citing that Netflix's price plan increase on Nov 22 was justified because it has a "sustainable competitive advantage" due to four factors:

1. significant lead in Netflix-enabled streaming platforms
2. unrivaled content available for streaming
3. best-in-class streaming technology/architecture
4. iconic brand in streaming video

Mr. Devitt states that Netflix's scale, value, consistent execution will position it as a long-term prospect to benefit from the growth of digital video.

The article also points out that Amazon.com is developing a Netflix-like subscription service that offers streaming video for movies and TV shows and would be bundled with its Amazon Prime shipping service (currently $79/year).

> Read the Wall Street Journal article

Netflixation Perspective: It is not clear to us why Amazon.com would bundle a subscription-based streaming video service with its premium shipping service. More importantly, we believe that the points made by the Morgan Stanley analyst have already been discounted by the stock market, as NFLX closed at $193.47 today.

The Bears
In contrast, a well-known short seller Manual Asensio, CEO of Mill Rock LLC, said to CNBC on Friday that Netflix is "never going to make what the analysts are saying they're gonna make in 2013. It's just not a reality, it's a complete fiction." Mr. Asensio does not believe that in three year's time, Netflix will make $600M. While the analyst are projecting $400M to just shy of $600M, Mr. Asensio asserts the following fallacies and myths:

1. Subscriber level and churn: In order to achieve the earnings target, Mr. Asensio states that Netflix would have to attain 40 million subscribers, and asserts that in order to reach this level, Netflix would have to go through 65 million subscribers, given the expected churn rate.
2. Netflix subscriber account piracy: One subscription can be shared by many users, and this would potentially undermine Netflix's ability to reach its target number of subscribers.
3. Internet streaming video and bandwidth: Mr. Asensio points out that the internet is owned privately [by the likes of Comcast and internet providers will not allow unlimited streaming forever without usage fees].
4. Netflix selection engine: Mr. Asensio asserts that it is worthless.
5. The studios: streaming content deals like Epics and Starz are not exclusive [and these licenses will not last forever, as they are subject to re-negotiations].

Mr. Asensio asserts that as Netflix transitions from the DVD rentals-by-mail business, which he refers to as a "physical delivery of a physical product" to a streaming video model, Netflix is "struggling to survive". Netflix would have to spend on the order of $1B on content licensing deals, while currently pulling in only $150M in earnings. He believes that Netflix would not be able to meet its earnings target for 2013, and therefore NFLX is currently overvalued by a factor of four or five.

> Read the Barron's article (with the CNBC video segment)

Netflixation Perspective: Mr. Asensio did not acknowledge Netflix's prospects into international markets, as they did with Canada last month. We do not agree with him on the Netflix recommendation engine as we found many good movies that way. While many are not available for instant streaming (~20,000 titles), all titles (~100,000 titles) are available on DVD. On the other hand, he does have valid points about subscriber level and churn, Netflix account piracy, internet bandwidth concerns over streaming video, and the content deals. In order to make lucrative content deals with Hollywood, the company is likely to leverage using debt. As a side note, we think Mr. Asensio would have better credibility if he was more objective and gave credit where credit was due. He went over the top when he said the Netflix deal with Epics is "nothing" and that such content is available over the internet everywhere.

Rebuttal from the Bulls
Rick Munarriz of The Motley Fool attempts to rebutt Mr. Asensio's claims in this The Motley Fool article. While his facts are useful, we believe the market already discounted that in the stock price.

Netflixation Perspective: With a market capitalization of $10B and a stock price having increased nearly four fold in 2010, the stakes are high. Our gut feel is that the stock may have gotten ahead of the company. At the end of the day, we will have to crunch a few numbers on our own.

Netflixation Disclosure: In the interest of full disclosure, we at Netflixation have not bought any shares of NFLX, yet, at the time of this post. Long or short.

posted 11.23.2010

There has been a lot of buzz around Netflix and its stock (Nasdaq: NFLX) this past week. So should existing shareholders sell to take profit on the good news? Or is this just the beginning of a huge run up? NFLX broke out of its 52-week high today to close at $187.71. If you appreciate technical analysis, check out this article. It asserts that NFLX most likely to head higher, as the short sellers will be covering their open positions which constituted 22% of tradeable float as of 10/29/2010. Maybe this is an opportunity for us (non-shareholders) to get in on some of the action?

posted 11.22.2010

Today, Netflix announced:

1. A streaming only plan for $7.99/mo.

2. Price increases on existing "unlimited" DVDs-by-mail. No change to Blu-ray Disc rental option (costs extra).

The details:

1. The instant streaming only plan does not include any DVD rentals-by-mail. This announcement is not surprising considering that this plan is identical to that offered to our Canadian neighbors on 9/22/2010.  Except Canadians only pay $7.99 Canadian, which is a tad cheaper than US$7.99.

2. Price increases on existing "unlimited" DVD rentals-by-mail: The price increases are as shown in the adjacent table and take effect immediately for new subscribers, or as of the next billing cycle for existing subscribers. For the most popular 1-disc and 2-disc at-a-time plans, the increase is only $1/mo.

DVD rentals-by-mail only plan?  There is not a DVD rentals-by-mail only plan, without the instant streaming option. Netflix claims that "members are already watching more TV episodes and movies streamed instantly over the internet than on DVDs, and we expect that trend to continue". We think translated it really means: (a) instant streaming marginally costs only a few pennies more (because licensing of movies is a fixed cost, and does not depend on the number of viewings), and (b) Netflix really wants to get all of its subscribers hooked on instant streaming and eventually shift away from DVD rentals altogether. The streaming business model for Netflix offers much higher margins compared to the high costs of DVD purchases, handling/sorting, and shipping costs associated with the DVD rental-by-mail program.

The Limited Plan with 1 DVD rental at-a-time (with 2 DVDs rentals per month limit) remains unchanged at $4.99/mo. This plan allows for 2 hours of streaming per month.

So what do you think? Will you go drop the DVD-by-mail rentals and go only with the instant streaming only plan? How do you feel about the price increases? To change your price plan, visit Your Account.

Our take: Netflixation believes that most consumers will stick with the price plans that they currently have, maybe except for those with the pricier 4+ DVDs at-a-time plans. Those consumers will probably opt to downgrade to fewer DVDs out at-a-time price plan to keep their monthly expeditures level. Price plans with DVD rentals are still the only way to get new releases, since the selection for DVDs is over 100,000 titles vs. 20,000 streaming titles. Most streaming movies are older releases. There are a few new release titles available for instant streaming. Given the price increase for the 1 or 2 DVDs at-a-time plan is only $1 more per month, most subscribers will probably stay with the price plans that offer DVD rentals-by-mail. Finally, the Netflix price plans still offer tremendous value. Netflix may already know that most subscribers would react to the price increase with resilience.  Or should we say netflexibility. Recession or not, Americans want to be entertained. Netflix still offers a lot of bang for the buck!