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Sell Coinstar, It Can't Beat Netflix

Amazon uses streaming to rope consumers into its larger ecosystem. Google drives advertising revenue. Big companies such as Sony (SNE) can put out relatively weak platforms such as Crackle because they own a considerable amount of content. Or, like Comcast (CMCSA) with Streampix, they have large enough arsenals to subsidize ventures that super-serve their core customer.

That's what AT&T (T) will do with its new streaming complement to U-Verse television. Same goes for Verizon vis-a-vis Redbox and FIOS.

You do not lose much if you're in the cable business and you add value to a traditional subscriber's package with streaming. This strategy will not hurt Verizon. If it fails, Verizon walks away, hardly wiping sweat from between its toes. Small potatoes.

If Redbox Instant fails, Coinstar is, more than likely, toast.

Unless you're a trader playing the chart, news or momentum, there's no reason to own CSTR. If you believe in the notion of third-party streaming, you're much better off riding NFLX's magic carpet back past $100.

Go with the old guard. The giant content owners. The big names who, as I noted in the above-linked article, outperformed NFLX significantly in 2012. At least you're buying strong, well-established companies.

I can't even call CSTR a reasonable speculative play; without a known Plan B and a really bad Plan A, it's a hope and a prayer.

--Written by Rocco Pendola in Santa Monica, Calif.
Rocco Pendola is TheStreet's Director of Social Media. Pendola's daily contributions to TheStreet frequently appear on CNBC and at various top online properties, such as Forbes.
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