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Also: CBS claims Dish hid ad-zapper details during retrans talks; 3net lands Comcast deal; Cable ONE does more with Synacor

Netflix Surges on Profit, Subscriber Gains

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
1/24/2013
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Welcome to today's broadband and cable news roundup.

  • Netflix Inc. ended a turbulent 2012 on a high note. Shares in the streaming video specialist soared more than 30 percent in after-hours trading Wednesday after the company issued fourth-quarter results that included a surprise profit and the addition of more than 2 million U.S. subscribers. Wall Street analysts were expecting a loss of 12 cents per share, but Netflix turned in a profit of 13 cents ($8 million) on revenues of $945.2 million, up 8 percent year-on-year and better than the $934.5 million that analysts were expecting. Netflix lost 380,000 DVD subscriptions, narrowed from a loss of 2.76 million a year earlier. The addition of 2.05 million streaming subs pushed Netflix's U.S. totals to 27.15 million. The surge comes ahead of the Feb. 1 premiere of Netflix's anticipated, new original series, House of Cards. Netflix predicts it will add 1.7 million customers in the first quarter of 2013. (See Icahn: Netflix Sale Has Crossed Our Minds.)

  • But how much higher can Netflix's streaming subscription totals go? Sanford C. Bernstein & Co. Inc. analyst Carlos Kirjner said in a research note that he's "highly skeptical that Netflix can get anywhere close" to the range of 50 million to 80 million U.S. subscribers this decade, even if company management views that as a realistic goal. He thinks cable operators will be forced to jack up broadband prices, or perhaps charge a fee directly to Netflix, if Netflix usage continues to rise. At this point, though, Kirjner sees Netflix's ceiling at about 38 million U.S. streaming subs.
  • CBS Corp. claims that Dish Network Corp. concealed material facts about its new ad-skipping technology when the companies were negotiating a new retransmission pact in 2011, reports Reuters. CBS added those allegations in a revised copyright lawsuit centered on Dish's AutoHop, a feature in the Hopper HD-DVR that automatically skips commercials in recorded prime-time programming from the nation's major broadcasters. CBS claims Dish "deliberately failed" to disclose that it had developed AutoHop and argues that it would not have struck a new retrans deal based on the current terms if the broadcaster was aware of the feature. (See Dish, Broadcasters Go to War Over Ad-Zapper.)
  • 3net, the Sony Corp., Discovery Communications Inc. and IMAX joint venture, has landed the biggest fish of them all. Comcast Corp. has struck a deal to carry programming from the 3-D channel on a part-time basis starting Jan. 28, with plans to offer "select" video-on-demand (VoD) titles from the network at a later date. Initially, Comcast will offer three hours of 3net programming each day (at least five days per week) on the MSO's own Xfinity 3D channel. In addition to 3-D programming, 3net is also set to produce some new series in the new UltraHD/4K format. (See 3net Puts 4K TV in the Picture.)
  • Synacor Inc. has inked an expanded TV Everywhere authentication deal with Cable ONE Inc., a Tier 2 MSO that serves more than 740,000 subs in 19 states. In addition to providing authentication for the HBO GO and MAX GO services via Cable ONE's customer portal, the new deal also covers similar access to Hulu LLC and TV Everywhere content from Fox Broadcasting Co., Turner Broadcasting System Inc. and Big Ten Network. — Jeff Baumgartner, Site Editor, Light Reading Cable

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    mendyk
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    mendyk,
    User Rank: Light Sabre
    1/25/2013 | 12:01:15 AM
    re: Netflix Surges on Profit, Subscriber Gains
    In other news, the lines for the lottery machines are out the door again.
    Jeff Baumgartner
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    Jeff Baumgartner,
    User Rank: Light Beer
    1/24/2013 | 8:25:45 PM
    re: Netflix Surges on Profit, Subscriber Gains
    And Netflix is still on the rise.. Shares were up $42.44 (41.10%) to $145.70 each in afternoon trading Thursday...
    Jeff Baumgartner
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    Jeff Baumgartner,
    User Rank: Light Beer
    1/24/2013 | 5:49:09 PM
    re: Netflix Surges on Profit, Subscriber Gains
    Great quarter for Netflix, but Will Richmond notes why everyone shouldn't get too giddy about the company again-á just yet now that it seems to be righting itself after the Qwikster debacle and rate increases.-á Among warnings, he points out that Netflix will likely have trouble hitting those lofty subscriber predictions, Amazon is going after Netflix big time, and that Netflix's international expansion is still taking on water (-á $389 million for all of 2012). And there's more...
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