Light Reading

Icahn: Netflix Sale Has 'Crossed Our Minds'

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
11/1/2012
50%
50%

Welcome to today's broadband and cable news roundup.

  • A sale of Netflix Inc. (Nasdaq: NFLX) is among the strategies that have "crossed our minds," billionaire activist investor Carl Icahn told Bloomberg TV soon after word spread that he had taken a 10 percent stake in the video streaming and DVD rental giant. He said the over-the-top video market is getting crowded and he expects to see some consolidation, identifying Microsoft Corp. (Nasdaq: MSFT), Google (Nasdaq: GOOG) and Verizon Communications Inc. (NYSE: VZ) among potential suitors. "We don't have any definite plans or proposals, but I think it's almost obvious that there should be consolidation," Icahn said. (See Icahn Nabs 10% of Netflix .)

    He also thinks "nobody has a better platform than Netflix" to take advantage of a trend that is seeing consumers view more and more video via Internet-connected TVs, tablets and smartphones. Icahn believes Netflix should place less emphasis on older library content and spend a lot more developing original programming to help it compete with premium subscription services such as HBO. For more, check out the interview below:



  • Cable outages in areas affected by Hurricane Sandy had fallen "well under" 20 percent as of Wednesday morning, Broadcasting & Cable reported, citing David Turetsky, chief of the Federal Communications Commission (FCC) 's Public Safety and Homeland Security Bureau. The day before, the FCC said the average was about 25 percent. (See Service Providers Assess Sandy's Impact .)

  • Cablevision Systems Corp. (NYSE: CVC) said recovery efforts underway following the storm has caused it to reschedule its third-quarter earnings call to Tuesday, Nov. 6 at 11 a.m.

  • Online video publisher Brightcove Inc. posted a third-quarter net loss of $600,000 (2 cents per share) on revenues of $22.1 million, up 32 percent from the year-ago quarter. Brightcove ended the quarter with cash and cash equivalents of $30.8 million, down from $58.6 million in the previous quarter due primarily to its $27.2 million acquisition of Zencoder, a cloud-based video encoding service. (See Brightcove Raises $55M in Nasdaq Debut .)

  • The Denver-based The Cable Center has expanded its board by three with the appointments of: Cox Communications Inc. SVP of Customer Experience Paul Cronin; CableLabs President and CEO Phil McKinney and newly named Comcast Corp. (Nasdaq: CMCSA, CMCSK) Regional VP, Mountain Region, Kyle McSlarrow. They'll serve three-year terms. (See McSlarrow Takes Over Comcast's Mountain Region and Ex-HP CTO Named CableLabs CEO.)

    — Jeff Baumgartner, Site Editor, Light Reading Cable

    (6)  | 
    Comment  | 
    Print  | 
  • Newest First  |  Oldest First  |  Threaded View
    Jeff Baumgartner
    50%
    50%
    Jeff Baumgartner,
    User Rank: Light Beer
    12/5/2012 | 5:18:21 PM
    re: Icahn: Netflix Sale Has 'Crossed Our Minds'


    He's certainly placing a bet that he can do well with another agitation.


    We haven't gotten a response (yet), but here's the first comment so far from Netflix, according to the NY Times: "We have many shareholders, now including Mr. Icahn, and we're alwasy open to their perspective on how to build on our success."


    Which doesn't say anything other than an acknowledgement that they've noticed. JB  


     

    elgato990
    50%
    50%
    elgato990,
    User Rank: Light Beer
    12/5/2012 | 5:18:21 PM
    re: Icahn: Netflix Sale Has 'Crossed Our Minds'


    So he is betting that Netflix is the next Instagram or OMGpop or Skype?   Where the strategy is to attack someone with a money losing business in hopes that they buy you for an irrational sum of money?  

    ethertype
    50%
    50%
    ethertype,
    User Rank: Light Sabre
    12/5/2012 | 5:18:20 PM
    re: Icahn: Netflix Sale Has 'Crossed Our Minds'


    The story of Netflix streaming to date is "great platform, shame about the content."  It's hardly their fault; their early dominance painted a huge target on their back, leading content owners to cripple them by withholding and overpricing content.  


    So if someone is going to buy Netflix, they will have to solve the content problem, most likely by blowing up the one-size-fits all Netflix price-value model, paying more and charging more for premium content.


    Buyer type 1 -- Large multichannel video provider (MVPD) that naturally already has strong content relationships but hasn't figured out streaming yet.  Could DBS providers be at the top of this list?


    Buyer type 2 -- Strong consumer brand, looking to jump start a weak video business. Maybe Sony or Google?


    Buyer type 3 -- Consortium of content players, most likely Hulu, who decide they're ready to accelerate their bypass play, even while they individually continue to act cozy with the MVPDs.


    Discuss.

    shygye75
    50%
    50%
    shygye75,
    User Rank: Light Beer
    12/5/2012 | 5:18:19 PM
    re: Icahn: Netflix Sale Has 'Crossed Our Minds'


    Having Carl Icahn show up on your shareholders roster is like having Gordon Ramsey walk into your restaurant, camera crew in tow. It means things are bad, and they aren't likely to get better for you in the long run.

    shygye75
    50%
    50%
    shygye75,
    User Rank: Light Beer
    12/5/2012 | 5:18:16 PM
    re: Icahn: Netflix Sale Has 'Crossed Our Minds'


    Gordo showed up at two restaurants in my area (Bergen County, NJ). One place closed in less than a year, and the other shut down after the chef/owner jumped off the George Washington Bridge. As far as Netflix becoming something other than a distribution channel by creating its own content, best of luck on that. I would guess that the failure rate for content producers is even higher than for start-up restaurants.

    AESerm
    50%
    50%
    AESerm,
    User Rank: Light Beer
    12/5/2012 | 5:18:16 PM
    re: Icahn: Netflix Sale Has 'Crossed Our Minds'


    That's a frightful image, but Chef Ramsey also on occasion turns a restaurant around, non? That said, not sure I follow Icahn, despite what he sees as "self-evident" and "almost obvious." He points to $2.5b in rev domestically and the prospect of using that for fresh content. Net income in 2011 was $226m. Is that what he wants to tap? 

    Flash Poll
    From The Founder
    The New IP is actually bigger even than business. Like another hugely important tech that Light Reading is digging into right now, the New IP has the potential to change the world by fundamentally advancing what it is possible for people to achieve with communications.
    LRTV Interviews
    Ericsson CEO Talks Telco Data Center Tech

    3|4|15   |   05:45   |   (0) comments


    At Mobile World Congress, Ericsson CEO Hans Vestberg discusses telco data center technology, business models, small cells and more.
    Between the CEOs
    EXCLUSIVE: Cisco's Chambers on Reinvention

    3|3|15   |   8:24   |   (1) comment


    Light Reading CEO Steve Saunders talks transformation and virtualization – including Light Reading's independent testing of the vendor's virtualization solutions – with Cisco CEO John Chambers at Mobile World Congress in Barcelona.
    LRTV Documentaries
    The Three Cs of MWC15

    3|2|15   |   2:33   |   (1) comment


    My visit to this year's Mobile World Congress is going to dominated by three Cs – cloud, cells and coffee.
    LRTV Huawei Video Resource Center
    Huawei Shares Its Vision of the Future of Mobile Networks Innovations

    2|26|15   |   2:30   |   (0) comments


    Mobile broadband is changing our lives. It's reshaping the Internet, industry, and society. It allows us to freely connect with one another anytime, anywhere. At this year's Mobile World Congress, Huawei will share its latest insights and newest ideas and technologies that will shape the future of MBB. They will showcase their end-to-end MBB solutions that will ...
    LRTV Huawei Video Resource Center
    Accelerate Digitizing, Boost Digital Business

    2|26|15   |   6:14   |   (0) comments


    A new digital revolution is leading us to a better connected world. Together with millions of digital partners, Huawei will help CSPs to build their digital service ecosystem and aggregate a wide variety of digital services. In this video, we find out how Huawei is going to help CSPs implement digital operations.
    LRTV Huawei Video Resource Center
    The Secret Recipe to Enabling Hyper-Growth Industries

    2|26|15   |   3:38   |   (0) comments


    With a number of successful cases on network capability exposure, Huawei is going to share the secret recipe to enabling hyper-growth markets with a step-by-step approach.
    LRTV Documentaries
    BTE 2015 Is Bigger & Even Better

    2|25|15   |   03:13   |   (4) comments


    This year's Big Telecom Event (BTE) in Chicago is going to provide more opportunities than ever for networking, getting to grips with key industry challenges and opportunities and, equally as important, having some fun.
    LRTV Interviews
    Light Reading ICT Leaders Roundtable at MWC 2015

    2|12|15   |   1:07   |   (2) comments


    On Sunday March 1, 2015, Light Reading will host an ICT Leaders Roundtable in partnership with Huawei. At this half-day event, CIOs, analysts and researchers will discuss key industry trends like virtualization in the cloud with a specific focus on new business models. Located at the luxurious Renaissance Hotel near the Fira Barcelona, space is limited so please ...
    LRTV Documentaries
    Going Green in 2015

    2|12|15   |   02:04   |   (0) comments


    Energy efficiency is set to be an incredibly hot topic in the telecom industry this year.
    LRTV Custom TV
    SDN & NFV: Where Are We Going From Here?

    2|11|15   |   11:27   |   (0) comments


    Vitesse Semiconductor CTO Martin Nuss gives his perspective on why SDN and NFV should be tightly interconnected and how he sees the industry moving forward.
    LRTV Documentaries
    Time for Gigabit Europe?

    2|9|15   |   01:27   |   (4) comments


    Gigabit broadband networks are springing up all around the US and they'll soon become more commonplace in Europe.
    LRTV Interviews
    Brocade Brings New IP Vision to 2020 Vision Executive Summit

    2|3|15   |   4:23   |   (0) comments


    In December 2014, Light Reading gathered telecom executives in Reykjavik, Iceland to discuss their vision for high-capacity networks through the end of the decade. The intimate, interactive meeting was set against the backdrop of Iceland's spectacular natural beauty. As one of the event's founding sponsors, Brocade's Kelly Herrell shared his company's strategy at ...
    Upcoming Live Events
    March 17, 2015, The Cable Center, Denver, CO
    April 14, 2015, The Westin Times Square, New York City, NY
    May 12, 2015, Grand Hyatt, Denver, CO
    May 13-14, 2015, The Westin Peachtree, Atlanta, GA
    June 8, 2015, Chicago, IL
    June 9-10, 2015, Chicago, IL
    June 9, 2015, Chicago, IL
    June 10, 2015, Chicago, IL
    All Upcoming Live Events
    Infographics
    Net neutrality, broadband services and the current outlook on data consumption, as presented by the New Jersey Institute of Technology.
    Hot Topics
    Internet Pioneers Decry Title II Rules
    Carol Wilson, Editor-at-large, 3/2/2015
    Small Cells Enabling Location Services
    Sarah Thomas, Editorial Operations Director, 2/25/2015
    Verizon Takes Radio Dot to Detroit, VoLTE Overseas
    Sarah Thomas, Editorial Operations Director, 2/27/2015
    FCC Adopts Title II Rules
    Alan Breznick, Cable/Video Practice Leader, 2/26/2015
    Like Us on Facebook
    Twitter Feed
    Webinar Archive
    BETWEEN THE CEOs - Executive Interviews
    Check out Light Reading's interview with Jay Samit, the newly appointed CEO of publicly traded SeaChange International Inc. With a resume that includes Sony, EMI, and Universal, Samit brings a reputation as an entrepreneur and a disruptor to his new role at the video solutions company. Hear what he had to say about the opportunities in video, as well as the outlook for cable, telco, OTT and mobile service providers.