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
TheStreet Open House

Can Netflix and Disney Make Amazon Insecure?

Stock quotes in this article: NFLX, AMZN, DIS, TWX, CSTR

NEW YORK ( TheStreet) -- I've spent a good portion of this year beating up on movie streaming giant Netflix (NFLX). It seems too often the company has not been able to get out of its own way.

An ill-timed price hike was one example of how Netflix was forced to bandage what have been chronic self-inflicted wounds. However, it appears those days are over.

With Netflix having just announced a content licensing deal with Walt Disney (DIS), I'm now beginning to wonder if Netflix turned the corner and placed Amazon.com (AMZN) in an unfamiliar position -- feeling a bit insecure.

Although Netflix's deal does not adversely impact upon Amazon's overall growth potential, I wonder if the lure of Disney will be enough to convince investors to be patient until the company can generate meaningful returns on its capital. Although Netflix has been growing revenue, profits have lagged. That wasn't the worst of it.

Netflix's situation looked even more grim three months ago when Amazon announced its content deal with premium TV joint venture Epix. This was Amazon's attempt to steal would-be Netflix subscribers. The deal allowed Epix to offer content to Amazon's Prime instant Video streaming service, including several popular hit movie titles such as The Hunger Games, Thor, The Avengers, Iron Man 2 and many more.

What the deal also meant was Netflix's partnership with Epix was no longer exclusive since Netflix allowed the agreement to lapse, which left the door open for Amazon. At the time, I asked what Netflix was thinking. How could a company already dealing with competitive pressures from the likes of Time Warner (TWX) and Coinstar (CSTR) (Redbox) allow such an advantage to slip away?

It seems the Disney deal answered this question. But it's going to take some time.

Although Disney will bring several advantages by allowing Netflix subscribers to stream not only Disney movies but also those from subsidiaries including Pixar and Marvel, this won't take effect until 2016. In the meantime, Netflix will have to execute perfectly and hope that the world's fiscal concerns improve.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,857.33 -185.57 -1.09%
S&P 500 1,957.27 -15.02 -0.76%
NASDAQ 4,446.0810 -47.3090 -1.05%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs