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Netflix Sinks to a New Low

Jeff Baumgartner
9/30/2011

Leading off Friday's cable news roundup, the hits keep coming at Netflix Inc. (Nasdaq: NFLX), and we're not talking about movies that killed it at the box office or TV shows that topped the The Nielsen Co. ratings.

  • Netflix stock took an 11 percent haircut Thursday, closing at a new 52-week low of $113.19, as investors fretted about the competitive prospects of Microsoft Corp. (Nasdaq: MSFT)'s Xbox TV platform and the new Kindle Fire tablet, which will bake in Amazon.com Inc. (Nasdaq: AMZN) streaming video service. Netflix, which has been reeling amid a recent price hike and a reduced subscription forecast, has seen its market cap drop by $10.1 billion in just 10 weeks, notes The New York Post. Netflix shares were down $3.38 (2.99%) to $109.81 in pre-market trading Friday. (See Netflix Does the Splits and Netflix Chops 1M Subs From Q3 Forecast.)

  • A few more details are bubbling up about how Verizon Communications Inc. (NYSE: VZ) and Comcast Corp. (Nasdaq: CMCSA, CMCSK) intend to integrate with Microsoft's coming Xbox TV effort. Verizon, taking a page from the AT&T Inc. (NYSE: T) U-verse playbook for the Xbox, will offer its full FiOS TV service, while Comcast will start off by providing access to its Xfinity On Demand service, says Multichannel News. Bloomberg, meanwhile, has identified several Xbox TV content partners, including HBO, NBCUniversal LLC 's Bravo and Syfy, and Amazon's LOVEFiLM International Ltd. . (See Microsoft's Pursuit of 'Input 1' and Microsoft Sees Xmas Debut for Xbox TV .)

  • Cable operators beat the telcos in all U.S. regions in the latest J.D. Power and Associates customer satisfaction rankings for residential phone service. Cox Communications Inc. took the crown in the East and West regions, while Bright House Networks was tops in the South; and WideOpenWest Holdings LLC (WOW) led in the North Central. But not every MSO scored well in every region. Charter Communications Inc. ranked last in the West, and Comcast brought up the rear in the South.

  • CableLabs has unveiled PeerConnect, a registry that connects cable operators so they can exchange data for voice and video calls, SMS messages and other IP apps over their respective networks. Among examples, Shaw Communications Inc. is using PeerConnect as a number translation service, and Cox TMI Wireless is using it as a component of its SMS-MMS service. CableLabs says the registry has been in production since 2009.

    — Jeff Baumgartner, Site Editor, Light Reading Cable

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    msilbey
    msilbey
    12/5/2012 | 4:52:14 PM
    re: Netflix Sinks to a New Low


    This gives Microsoft traction in the TV space, but it's still just a portal to other content experiences. I assume operators are imposing their branding and interfaces all over this. Will be interesting to watch. 


    Also, Ryan Lawler made the point this morning that this is an issue for cable operators because it opens up a lot more choices for consumers when they turn on their TVs, of which cable programming is only one. However, my feeling is that content is still king. If cable offers the best content, it's still the choice consumers will make - whether they tune in on a set-top, or through an app on an Xbox. 

    shygye75
    shygye75
    12/5/2012 | 4:52:12 PM
    re: Netflix Sinks to a New Low


     "[Netflix] has seen its market cap drop by $10.1 billion in just 10 weeks...." I don't think even Paul Allen has ever blown through $1 billion a week for this length of time.

    msilbey
    msilbey
    12/5/2012 | 4:52:11 PM
    re: Netflix Sinks to a New Low


    Didn't Paul Allen once navigate his massive boat up to the Cable Show or SCTE conference and host meetings/parties there? I may be misremembering, but I seem to recall hearing that story once upon a time. Jeff would know.

    msilbey
    msilbey
    12/5/2012 | 4:52:11 PM
    re: Netflix Sinks to a New Low


    Ugh, sounds like a terrible kludge. And yes, this does highlight some serious differentiation between the Verizon implementation and the Comcast one. Verizon did say back in January that it could flip the switch on IP delivery of linear content (i.e. simulcast). Guess this is proof. 

    Jeff Baumgartner
    Jeff Baumgartner
    12/5/2012 | 4:52:11 PM
    re: Netflix Sinks to a New Low


    We've been talking about this since CES and the cable guys started talking about their work with Samsung and Sony on connected TVs, but this sort of thing does turn cable into an app and does indeed cede some control. But it's either that or get lumped on the head by Allvid.  Take the lesser of the two evils/distractions?


    but, you're right, they'll still need to have the content to stand out from all those choices.


    Found it interesting that Comcast apparently won't be offering the whole lot, so guess a IP video simulcast indeed won't be in play yet for them (yet). Maybe they can enable the live TV piece by connecting that Motorola Televation doodad to the Xbox 360... more klugy, for sure, since we're talking about another box, but perhaps it's an option? JB




     
    msilbey
    msilbey
    12/5/2012 | 4:52:10 PM
    re: Netflix Sinks to a New Low


    The boxes could be flipped, but not the network, I assume. Not yet anyway.

    msilbey
    msilbey
    12/5/2012 | 4:52:10 PM
    re: Netflix Sinks to a New Low


    His loss. :)

    Jeff Baumgartner
    Jeff Baumgartner
    12/5/2012 | 4:52:10 PM
    re: Netflix Sinks to a New Low


    And Comcast apparently has that possible option too. They acknowledged awhile back that their RNG-class boxes could be flipped to handle IPTV. So it would seem that simulcast is in their thinking too, just maybe further out. JB

    Jeff Baumgartner
    Jeff Baumgartner
    12/5/2012 | 4:52:10 PM
    re: Netflix Sinks to a New Low


    He did... but i can't recall for sure, but i thought it was his 414-foot Octopus that he brought in when the show was held in New Orleans.  Or was it the 303-foot Tatoosh?   And, no, I didn't get an invite to the party he held on whichever one he cruised in on. JB


     

    Jeff Baumgartner
    Jeff Baumgartner
    12/5/2012 | 4:52:09 PM
    re: Netflix Sinks to a New Low


    Right, i'm assuming it would be a transitional simulcast since they'd be running an IPTV simulcast. Of course, I don't know if that's their initial intention with the IP capabilities inside the millions of RNG boxes that are in the field now. maybe they want to flip them into hybrids initially to keep QAM on them but also support that new cloud-based navigation system and IP-based apps slate for the Xcalibur/spectrum box that Comcast demod at the cable show. JB

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