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Redbox Flexes Its Muscles As It Prepares For More Battles In Hollywood

UPDATE: Redbox To Unveil Streaming Plan As It Raises DVD Rentals To $1.20 A Night

There was an underlying message in Redbox parent Coinstar’s presentation to analysts yesterday following its 3Q earnings report: Warner Bros, Universal, and Fox had better not double the delay period for providing DVDs to Redbox. Despite his easy-going speaking style, CEO Paul Davis firmly indicated that such a strategy — increasing the window for those studios to as much as 60 days from the current 28 – would lead to corporate warfare and probably backfire. It would help Paramount, Sony, and Lionsgate, which recently extended their agreements to supply DVDs to Redbox the same day that they’re available elsewhere. (Disney also provides discs on opening day to Redbox.) What’s more, Redbox execs say that they can buy DVDs from other sources instead of securing them directly from the studios. “The great thing about the United States is that the first-sale doctrine gives you opportunity for workarounds, and we evaluate that … to protect the windows we enjoy today,” Davis says.

Coinstar executives say that they want a win-win solution — that studios have something to gain by helping Redbox. The company illustrated that with its new agreement to give Paramount 100,000 Coinstar shares for extending its day-and-date deal, with an option for 100,000 more if the studio takes it two years beyond 2014. They also subtly reminded studios that they’ll need Redbox if they decide to milk DVDs as long as they can while waiting for consumers to warm to cable and Internet VOD services. Coinstar noted that it recently became the leading renter of DVDs in the wake of Netflix’s blundering decision to raise subscription prices by 60% for people who want to to rent discs as well as digital streams. Read More »

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Is It “Nuclear Winter” For Netflix? Analysts Tell Investors To Bail After 3Q Setbacks

Netflix is in for a brutal morning: The stock is down 35% in pre-market trading from its $118.84 close yesterday as some influential Wall Street analysts tell investors it’s time to dump the stock following last night’s disappointing earnings report and forecast. Susquehanna Financial Group’s Vasily Karasyov downgraded Netflix to “negative” from “neutral.” He says  that it “looks like the nuclear winter scenario is playing out” for the company as “subscriber base expansion in the U.S. appears to be minimal and losses from international launches are weighing on profitability.” The combination will “put to rest the bull case on (Netflix) as we know it.” Janney Capital Markets’ Tony Wible also downgraded the stock to “sell” – and slashed his price target in half to $51. Calling the company’s business model “unsustainable” he says: “Fundamentals are eroding, management credibility is shot, international growth is deteriorating, and margins are imploding. Furthermore, the company’s disclosures support our view that the DVD business accounts for a disproportionate amount of (Netflix’s) profits (82%),” which means investors should look at it as an old-fashioned rental company instead of a digital-age power. Even Netflix supporters are retrenching. Read More »

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Why DreamWorks Animation & Netflix Near Exclusive Online Streaming Deal

Netflix reports its earnings and then will talk with Wall Street analysts tonight, and Dreamworks Animation does the same tomorrow. Both might benefit if they can announce a deal that would provide online streaming rights for Dreamworks’ films exclusively to Netflix in the pay TV window. Dreamworks hasn’t been able to cash in on the growing market for digital streaming so far. HBO controls those rights in the pay TV window through 2014. HBO may let DreamWorks out of that agreement early according to Bloomberg which broke the story about the deal with Netflix.

Wall Street is eager to see the details — especially how much Netflix is willing to pay for the Dreamworks rights — to determine whether Netflix “won a (Dreamworks) deal or was the buyer of last resort,” Janney Montgomery Scott analyst Tony Wibble says this morning. Investors also want to know whether the deal diminishes the chance that someone will buy Dreamworks. If HBO is willing to let the company out of its pay TV deal then that would suggest there’s a “low probability” that Time Warner might be interested, Lazard Capital Markets’ Barton Crockett says.

There’s no question that Dreamworks Animation desperately needs an upbeat story to tell. The value of the company’s stock has fallen 28.6% in 2011. Investors are wondering how CEO Jeffrey Katzenberg’s studio will profit from the two films Dreamworks typically releases … Read More »

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BARGAIN NO MORE: Netflix Unveils 60% Price Hike For Streaming-Plus-DVD Service

Netflix is about to become less compelling bargain for people who want to stream videos and also watch DVDs: The company’s abandoning its $9.99 a month plan that enabled subscribers to watch unlimited video streams and also have one DVD out at a time sent via mail. The price for that combo service will jump to $15.98 as Netflix requires consumers to separately order unlimited streaming for $7.99 a month or 1-at-a-time DVD rentals for $7.99. The new pricing begins immediately for new customers, and on Sept. 1 for existing ones. Netflix already offered the streaming-only service, and is spinning this as a price break for DVD-only subscribers. “By better reflecting the underlying costs and offering our lowest prices ever for unlimited DVD, we hope to provide a great value to our current and future DVD-by-mail members,” Chief Service and Operations Officer Andy Rendich said in a release.

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Netflix and NBCU Expand TV Streaming Deal

By | Friday September 24, 2010 @ 9:44am PDT
Nellie Andreeva

Netflix and NBC Universal announced an expanded license agreement through which Netflix members can watch a selection of broadcast series from the NBC television network and – for the first time on Netflix – content from some of NBC Universal’s cable channels. The multi-year deal kicks off next week. Available are:

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