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

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

NEW YORK ( TheDeal) -- What was Netflix Inc. (NFLX - Get Report) 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

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
DISCA $28.83 -0.04%
NFLX $109.78 -3.20%
AAPL $111.73 0.12%
FB $94.12 -0.15%
GOOG $652.26 0.86%


Chart of I:DJI
DOW 17,081.89 -49.97 -0.29%
S&P 500 2,014.89 +15.91 0.80%
NASDAQ 4,796.6090 -42.0340 -0.87%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs