Light Reading

Icahn: Netflix Sale Has 'Crossed Our Minds'

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner

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        ADD A COMMENT
    Jeff Baumgartner
    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  


    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?  

    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.


    User Rank: Light Sabre
    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.

    User Rank: Light Sabre
    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.

    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? 

    From The Founder
    The comms industry is rallying to the cause of open, independent interoperability testing.
    Flash Poll
    Live Streaming Video
    CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
    Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
    LRTV Interviews
    BT Updates on Plans

    10|2|15   |   03:16   |   (2) comments

    Peter Bell, CIO at Openreach, the access network division at UK incumbent BT, provides an update on the operator's trials and how Openreach is planning to deploy the broadband technology in its street cabinets.
    Telecom Innovators Video Showcase
    Sonus Shakes Up SD-WAN

    10|2|15   |   7:22   |   (0) comments

    Sonus CTO Kevin Riley sat down with Light Reading to discuss the trajectory of the company, its SDN ambitions and why Sonus is taking a market-disruptive approve to SD-WAN.
    LRTV Interviews
    CityFibre's Gigabit Vision

    10|1|15   |   03:18   |   (1) comment

    Mark Collins, director of Strategy & Public Affairs at competitive UK city network operator CityFibre, talks about his company's plans to help build Gigabit Cities.
    Telecom Innovators Video Showcase
    Automate, Scale & Create With Juniper's vCPE Solution

    10|1|15   |   6:34   |   (0) comments

    Join Kireeti Kompella, Juniper Networks CTO, and Steve Saunders, Light Reading Founder and CEO, as they discuss Juniper Networks' approach to NFV showcased with a turnkey vCPE solution, which demonstrates how service providers can use automation to rapidly deploy services.
    LRTV Interviews
    Gigabit Europe: Day 1 Takeaways

    9|29|15   |   05:47   |   (5) comments

    Light Reading's Ray Le Maistre and Iain Morris sup a beer and discuss some of the key takeaways from the first day of Gigabit Europe 2015.
    LRTV Interviews
    Gigabit in Europe

    9|29|15   |   04:24   |   (0) comments

    At the Gigabit Europe 2015 event in Munich, Heavy Reading's Graham Finnie talks about the availability of gigabit broadband in Europe.
    Women in Comms Introduction Videos
    AT&T's Band of Women

    9|28|15   |   4:36   |   (0) comments

    Brooks McCorcle, the president of AT&T's partner solutions divisions and a mathematician by trade, shares stats on AT&T's diversity and advice on how to create your own band of women at work.
    Telecom Innovators Video Showcase
    Metaswitch's New CEO Martin Lund Discusses His Role

    9|25|15   |   11:36   |   (0) comments

    Technology industry veteran Martin Lund joins Metaswitch Networks this week as the company's new CEO. In this interview, Lund discusses his new role and the industry's progress with Light Reading CEO Steve Saunders. Lund believes that the industry disruption caused by SDN and NFV is creating opportunities for companies like Metaswitch – network software providers ...
    It's All About That App

    9|23|15   |   02:15   |   (2) comments

    The long-range goal of service providers is to deliver app-specific network performance and that is showing up in technical developments today.
    Women in Comms Introduction Videos
    Verizon's Healthy Approach to WiC

    9|22|15   |   2:30   |   (2) comments

    If you think there are too few women in comms, you should see the healthcare industry. Nancy Green, Verizon's healthcare global lead, shares ideas on what we can do about it.
    LRTV Huawei Video Resource Center
    UBBF 2015 Highlights

    9|22|15   |     |   (0) comments

    Drilling down deeper into the transformation process will provide network operators with a practical look at building new businesses around a digital virtualized network architecture, and lay out some of the transition steps required, particularly in the struggle to enable more dynamic and focused enterprise network services.
    Telecom Innovators Video Showcase
    ActiveVideo's Cloud Virtualization Technology

    9|22|15   |   7:23   |   (0) comments

    ActiveVideo's CMO, Murali Nemani, discusses how virtualized CPE functions can deliver applications from the cloud to various devices at home.
    Upcoming Live Events
    October 14-15, 2015, New Orleans Ernest N. Morial Convention Center, New Orleans, LA
    November 5, 2015, Hilton Santa Clara, Santa Clara, CA
    November 17, 2015, Santa Clara, California
    December 1, 2015, The Westin Times Square, New York City
    December 2, 2015, The Westin Times Square, New York City
    All Upcoming Live Events
    Communication service providers realize that an ICT transformation is critical to their long-term survival, but most haven't yet committed to making it happen.
    Hot Topics
    Are Sports Next for Netflix?
    Mari Silbey, Senior Editor, Cable/Video, 9/28/2015
    Google Gives Huawei a US Device Boost
    Dan Jones, Mobile Editor, 9/29/2015
    Verizon's Go90 Is Live – Will Anyone Watch?
    Mari Silbey, Senior Editor, Cable/Video, 10/1/2015
    Following the Bouncing Capex Ball
    Carol Wilson, Editor-at-large, 9/29/2015
    Good News for NFV Interoperability
    Steve Saunders, CEO and founder, Light Reading, 9/29/2015
    Like Us on Facebook
    Twitter Feed
    Webinar Archive
    BETWEEN THE CEOs - Executive Interviews
    With so many new and exciting communications technologies now under development, it's easy to get caught up in the industry's escalating hype cycle. That's why the ...
    Last week saw a big day in the 15-year history of Light Reading when Editor-in-Chief Ray Le Maistre and I were invited to interview the Deputy Chairman and Rotating ...
    Cats with Phones
    Hold My Calls, Indefinitely Click Here