This Day On The Street
Continue to site right-arrow
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The Deal: Netflix CEO's Bet on Content Depends on Who Controls It

Stocks in this article: NFLX DISCA

NEW YORK ( TheDeal) -- What was Netflix Inc. (NFLX) founder and leader Reed Hastings really trying to accomplish last week when he unloosed his vision for the video-streaming company?

a) Lull the cable portion of the pay-television firmament into a false sense of security.

b) Intimidate competitors and would-be interlopers into thinking Netflix already has the resources, scale and techniques to crush those intruding on its business model of "commercial-free unlimited-viewing subscription TV."

c) Bring even more transparency to a company that already celebrates having simplicity "at our core."

d) All of the above.

Answer: d) All of the above.

To arrive at this conclusion, it helps to contrast Hastings' "Long Term View," which is linked to Netflix's investor-relations site, with another white paper released last week, "Content Kings: The Changing Landscape of TV Consumption." This second paper, published by investment banking boutique Digital Capital Advisors, was prepared for a clientele described as "innovative media companies for whom digital is core to their DNA as well as those who would like it to be."

Its analysis, presumably agenda-free aside from a desire to win clients, differs markedly from Hastings' over the role of TV Everywhere -- the authentication system that allows cable customers, via passwords, to use any so-called 4-screen device (smartphone, tablet, PC/laptop or TV) for viewing the same networks covered by their cable subscriptions.

According to Hastings, "TV Everywhere will provide a smooth economic transition for existing networks." It'll be so smooth, he continues, "The same consumer who today finds it worthwhile to pay for a linear TV package will likely pay for a 'linear plus apps' package."

But that's not the way DCA sees it. "Seemingly unlimited amounts of new content now accessible online," the media bank contends, "has made the historic role of cable operators ... well, historic." Harsh words indeed, made harsher by the three to five "sustainable years" DCA gives the TV ecosystem as we know it. "Their DNA is simply incompatible with the evolving digital landscape of today," it says of a transition soon to be accelerated by the adoption of Smart IPTVs, "so it is just a matter of time before they are turned on their head."

1 of 3

Select the service that is right for you!

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 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • 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