This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Verizon Netflix Gains Could be Limited: Analyst

NEW YORK ( TheStreet) -The rumors of Verizon Communications (VZ - Get Report) making a bid for Netflix (NFLX - Get Report) continue to swirl. One analyst thinks that Verizon does have something to gain from buying Netflix, but the gains might be limited in scope.

Morningstar analyst Michael Hodel said that buying Netflix would bring in more than 23 million current customers, a "decent brand name," and a number of content deals, albeit expensive ones.

Where Verizon could see value in the deal is the customer base, and packaging that with its FiOS television and other services, he added. Hodel also speculated that "Verizon may see some value in adding Netflix to Verizon Wireless as well."

On the other hand, Netflix has overpaid for content, and the content deals might not be worth much, Hodel said.

Hulu, Redbox and Netflix have already been mentioned as potential partners for Verizon. Holden would expect Verizon to make a decision on online video distribution based upon the financial impact of each option.

Hodel has a $38 fair target price on Verizon.

Netflix has come under a great deal of pressure in 2011, as the company announced a price hike to its subscription service without announcing any increase in services. It also proposed to separate its DVD-by-mail business from the online streaming business, which caused a slew of negative comments, and forced the company to rethink the controversial strategy.

CEO Lowell McAdam spoke at a conference last week and said the company is interested in the video streaming subscription business, moving beyond its FiOS TV service. He said Verizon looked at Hulu, when it was up for sale over the summer, according to Businessweek.

Porter Bibb, managing partner at Mediatech Capital, went on Bloomberg television yesterday and added fuel to the story. He said he heard "rumblings from inside Verizon that they are very serious about Netflix or something similar."

Verizon declined to comment for the story.

Verizon shares were falling Tuesday, down 2 cents to $38.33.

-- Written by Chris Ciaccia in New York

>To follow the writer on Twitter, go to

>To submit a news tip, send an email to:

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
NFLX $108.33 0.00%
VZ $44.06 0.00%
AAPL $111.31 0.00%
FB $92.80 0.00%
GOOG $645.44 0.00%


Chart of I:DJI
DOW 16,790.19 +13.76 0.08%
S&P 500 1,979.92 -7.13 -0.36%
NASDAQ 4,748.3610 -32.9030 -0.69%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs