Nasdaq:NFLX Archive

4

DISH Network Prepares to Battle Netflix

By
Andrew Montero
– April 26, 2011
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Last week, DISH Network (NASDAQ:DISH) released a PR which I find quite exciting. Here is the press release in its entirety:

DISH Network’s DISHOnline.com delivers HBO® and Cinemax® titles not available on Netflix’s online service

ENGLEWOOD, Colo., April 21, 2011 /PRNewswire/ — DISH Network L.L.C. today announced that DISHOnline.com now gives customers instant, unlimited access to HBO and Cinemax titles not offered by Netflix’s online service. In connection with Home Box Office, Inc.’s new online video destinations, HBO GO® and MAX GO®, DISH Network customers who subscribe to HBO or Cinemax premium channels can now instantly watch nearly all of the respective current HBO or Cinemax programming inventory – most of which is available in high definition – at DISHOnline.com. Customers have access to more than 1,800 titles including Hollywood hits such as Avatar, The Hangover and Up in the Air, original content like award-winning series Boardwalk Empire® and True Blood®, as well as independent films, cult favorites and more.

“DISH Network is thrilled to be working with HBO to bring this broad collection of top-billed content to our customers for instant access at DISHOnline.com,” said Dave Shull, senior vice president of Programming for DISH Network. “DISH Network customers with an HBO or Cinemax subscription can also get new series titles after their premiere – plus bonus content including interviews, recaps and behind-the-scenes extras – none of which are available through Netflix’s online service.”

DISH Network customers who subscribe to the HBO or Cinemax TV packages can enjoy the respective online content any time and from any U.S. location with a broadband connection by simply logging on to DISHOnline.com, HBOGO.com or MAXGO.com.

DISH Network’s DISHOnline.com is the only online video portal that gives customers the ability to integrate live and recorded TV with more than 150,000 popular movies, TV shows, clips and trailers into one easy-to-use-interface. For more information or to create an account, visit www.DISHOnline.com

This PR in and of itself is very good, but couple it with the recent winning bid for Blockbuster Video by DISH and I would say a certain other online movie service is in for a major battle; are you paying attention Netflix (NSADAQ: NFLX) ?  Perhaps due to waiting for final approval from the bankruptcy court and satisfaction of certain conditions related to the bankruptcy, DISH network has been relatively quiet about the winning auction bid for Blockbuster. In the April 21 filing with U.S. Bankruptcy Court in New York, lawyers for DISH said they needed more time to determine which of the 1,700 Blockbuster stores would remain in operation.

DISH has until May 5 to close the deal, which was previously extended to April 25. Blockbuster has agreed to waive a $500,000 daily fee that was to have been previously assessed to the sale when extended beyond the closing date. DISH has agreed to assume costs associated with continued store based operations, including employee costs and vacations. U.S. Bankruptcy Judge Burton Lifland is due to rule this week on granting Dish 90 additional days (to July 21) to assume or reject current store leases. In court filings, Dish listed about 575 stores it intends to keep operating.

However, this media powerhouse would appear to be a very formidable foe for NFLX and seems poised to beat NFLX at its own game and with considerably more available media and choices for the consumer. The video entertainment customer base will likely now have some exploring to do and choices to make once Charlie Ergen has that final approval of the sale in his hands. Make no mistake, Mr. Ergen is going to make sure that his Blockbuster purchase wields a significant profit and helps continue to accumulate significant market share for his media empire.  The combination of DISH and Blockbuster seems a very formidable opponent for Netflix or any other video or cable entity to try and fend off. Investors should pay attention to DISH news and filings in the coming weeks. The quarterly conference call for DISH is scheduled for May 2nd at noon. The dial in number is (800) 616-6729. Additional information can be found here;

http://dish.client.shareholder.com/releases.cfm

Disclosure:  No position in DISH, BLOAQ or NFLX currently

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17

Sirius XM Radio (NASDAQ: SIRI) Validating Itself and Moving Up

By
Andrew Montero
– October 27, 2010
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globexmsiriusbig

There’s a reason why the stock of Sirius XM radio is moving up. The recent refinancing of some of its debt has left the company in a much more favorable position going forward with significantly reduced interest on their debt,that, along with the fact that more money stands to hit the bottom line as CAPEX will be reduced for the next several years, has left the company primed for success. There will be substantial differences, tangible ones on future quarterly balance sheets after 2010. With Sirius XM beginning to  show it will be routinely profitable, those $ 8 billion dollars in NOLs will really have some positive effect on the bottom line going forward.

So…. the market believes that Sirius XM is more valuable at the moment than Netflix( NASDAQ:NFLX).  Not a surprise since there are only 3.9 billion shares being traded and available right now and not really the 6.4 billion shares outstanding constantly quoted.  Liberty Media owns preferred shares with the potential to convert into another 2.5 billion or so common. Those shares are attributed to Liberty Capital (NASDAQ:LCAPA,LCAPB) And while that value percentage of the company has to be accounted for, it also makes  the available shares not so available.  Sirius still has another $3 billion in debt, but it is much more manageable debt.  Sirius XM commands an enterprise value of roughly $11.7 billion. But let’s take a closer look at that.  Enterprise value is calculated by adding a corporation’s market capitalization, preferred stock, and outstanding debt together and then subtracting out the cash and cash equivalents found on the balance sheet. The reason the cash is subtracted is that once you have acquired complete ownership of the company, the cash becomes yours. I will come back to this part of the article a little later.

Sirius XM has kept monthly churn down and has reported churn of 1.8% latest quarter. Not a surprise really since Sirius XM subscribers receive significant discounts for pre  paying their subscriptions. Lets talk growth. Sirius XM’s subscriber base has grown from 1.6 million subscribers in 2003 to 20 million strong in 2010 just 7 years later, with no signs of stopping as the Auto industry recovers. We know and understand that OEM radios are the driver so far for subscribers, but the company has been smart if not aggressive in leveraging their content over the internet and portable devices as well.

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12

Blockbuster May One Day Be Forced To Sue Netflix for Anti-trust Violations

By
king1
– March 24, 2010
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By Relmor Demitrius

 

It might be hard for some people to imagine Netflix (NASDAQ:NFLX) as the big bad bully in the entertainment distribution market, especially when you consider the once retail superpower Blockbuster Inc. (NYSE:BBI) as the victim.   In the new digital age, court rooms and laws have to evolve as fast as the industries they cover.  There are more grey areas in technology based anti-trust laws than teenage fans of the new Twilight Movie release.  

When you dominate an industry, and then are late to the party on the digital age, you really only have yourself to blame.  With a new CEO and a very warranted sense of urgency Blockbuster is making this game of catch up very interesting.  As Blockbuster seeks to move in this direction, and indeed they have made great strides in that area, they might find the path a little more difficult than Netflix had it.  Should one company dominate the On Demand Video distribution business?  Not if customers want quality and pricing to remain affordable.  Blockbuster does have some leverage though with exclusive same day of release distribution capabilities for many new movies, they can offer the game system manufacturers something more;ie more bang for the buck.

Rarely, does one company dominating an industry provide better overall quality than  two companies competing for that same market share.  Would Intel (NASDAQ:INTL) chips be as fast and affordable today without AMD (NYSE:AMD) pushing them?  Of course not.  Would McDonalds only charge $1 for a McDouble if Wendy’s didn’t have a dollar menu too?  I think the answers here are obvious, and lessons learned in other industries shouldn’t be ignored.  Am I claiming Netflix is in violation of anti-trust laws?  Not at all.  That is actually the furthest thing from what I am saying here.  But lessons learned can be applied here.  I mean Netflix is just a company like any other.  They have stockholders to satisfy too.  If Blockbuster approached Sony, Nintendo or Microsoft for their XBOX 360 device, and proposed an agreement to be available on any of their devices as an alternative download method for digital entertainment, and Netflix said if you don’t do that, we will give you a percentage revenue share of all profits, there could be a line being crossed.   This is just one very hypothetical future scenario Blockbuster could be in, or for all we know already is facing right now.

For instance, when a company was thinking about going with an AMD products versus Intel, Intel was accused of offering pricing AMD could not compete with, even at a loss to them, on top of kick back rebates for simply buying Intel products, and for not switching.  There are other nuances to this dispute and settlement, but that is the basic concept Intel was accused of, and in fact settled with AMD for over 1 billion dollars.  This was considered an anti-trust violation by the courts.  Through legal avenues, options expanded for AMD where otherwise doors were closed.  Is it the end all of AMD’s problems?  Of course not, but the precedence by the court was set, and should help AMD’s penetration going forward.

The same could be possible for Blockbuster.  As their penetration with On Demand devices now includes a slew of home entertainment system products from Samsung (now including even Blu-Ray capabilities) and availability in Tivo devices as well, Blockbuster in 2009 entered into an area in which previously Netflix only had reigned.  Netflix famous inclusion in  gaming platforms is considered a legendary example of marketing genius and distribution.  Use it or not, on every XBOX 360 is the name Netflix with the ability to download movies directly to your TV through your device.  Mobile apps are now coming up from both companies as well.  The Iphone has a Netflix application and a Blockbuster application is available on the HTC H2 device from T Mobile.  Blockbuster also has a Motorola app in the works for select phones, as well as an application which will work with ARCHOS portable media players giving the user literally hundreds of choices.

Is there room for two distributors?  For consumers sake, I hope so.  If not, then maybe some day a court of law will have to make sure this will be the case.  For now there are avenues for Blockbuster to continue to expand their business model, without legal means being necessary.  Who knows, maybe in 2 years Blockbuster and Netflix may be on every new TV and digital recording device that comes out.  I think that would definitely be a huge win win situation for consumers.  Well have to see what the future holds.

Long BBI

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2

Tivo Poised For Another Price Spike

By
Gino Lattarulo
– March 21, 2010
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Tivo (TIVO) has recently blown the doors off of its price action, rising almost 70 percent last week after the federal appeals court upheld a contempt ruling against EchoStar (SATS) and Dish Network (DISH) for continual patent infringement. All of this isn’t exactly stunning news of course but it does lend itself to some interesting possibilities from Tivo in the future.

First let me say that I became a Tivo user because I was sick of paying $200.00 a month to Time Warner Cable (TWC) for the privilege of Pay Per View and receiving 500 channels that were never  utilized.   I canceled everything but Road Runner, bought the Tivo box  and signed up for Netflix (NFLX) so I can stream movies to it, and finally installed an HD antennae ($50.00) to get the local networks. Presto, $ 200.00 per month became $ 75.00 per month.  OK, so I will miss Bloomberg and CNBC but  not enough to shell out an additional $125.00.  I’m not Jonesing for Cramer that badly, especially when I can get those channels for free on the internet.  I can also can live without college wrestling, The Knitting Channel,  or “Stuff TV”, whatever the hell that is.  You gotta love the technological revolution that is available to cheapskates.

I digress..

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4

Blockbuster Inc. Seeks To Move In a New Direction

By
king1
– March 8, 2010
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By Relmor Demitrius -

Video rental giant Blockbuster Inc. (NYSE:BBI) released its fourth quarter financial results in January of this year.  They showed declining year to year revenue and a large loss per share, although this was due mainly to a one time goodwill charge.  At a quick glance one might think twice about throwing money at this stock.  The results were not impressive to the street apparently.  The stock has been under pressure of late, but has rebounded nicely the last two days, rising from a low of 30 cents to over 39 cents as of Friday.  The stock was trading over 70 cents in January before S&P put them on credit watch after the company released Q4 numbers.

The company currently sits at a 48 million dollar market cap.  They only have 122 million shares, and a large percentage of them are insider owned.  The company reported 42 million in free cash flow during their fourth quarter.  These are a few of the basic reasons I am keeping an eye on this equity.  Yes they have a high cost basis, and declining revenue trends doesn’t sit well with investors, but anytime a market cap is presented this low on a once largely profitable company, that is now dominating the market share of an albeit fading business model, it definitely should be looked at closely.  If this company were to rebound, this stock is currently priced for a huge dilution, bankruptcy, or a hostile takeover attempt, large gains are on the board.  If these things can be avoided, and certain goals of management are seen to fruition, then there is a possible play here.   CEO Jim Keyes has been on a path of promoting change with the company, and trying to show to the street that the company is committed to lowering costs, and moving into the digital age of media distribution.  He thinks the brand name is strong and will aid them greatly in stealing market share from Netflix and Redbox.  It is possible that Blockbuster can credit some of their revenue losses on too many unprofitable stores and a down economy.  Blockbuster is currently in the process of cutting the fat on their bloated retail store numbers, and the economy seems to be improving.

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