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Netflix: Let's Make a Deal!

September 06, 2012 – Comments (1) | RELATED TICKERS: NFLX

Board: Value Hounds

Author: LeKitKat

Ted Hastings BFF and content chief loses another one. The company can't afford to get left in the dust of faster more aggressive deal makers.

Last week HBO made a deal with Parsifal tech to stream content in Scandinavia with no subscription required

While in the US, requests for an HBO Go subscription option that brings the channel's programming without being tethered to a cable or satellite-TV package go unheeded, HBO revealed today that its Scandinavian offering will do just that.

While the HBO Nordic joint venture between HBO and Parsifal International will be available over "local distribution partners," it is also available strictly as an over-the-top service for VOD and subscription access to premium content for less than €10 when it launches in October.

It brings all the HBO current and catalog content you'd expect (subtitled for the local markets in Sweden, Norway, Finland and Denmark) and it's also tossing in content from other providers, like the popular Canadian show Continuum. CEO Hervé Payan says it will be available on "any" internet connected device, and says the decision to go over the top is because its target group of viewer have changed their consumption to multiple screens.

Reed Hastings using FaceBook again as a preferred medium of communication said he welcomes the competition. Netflix recently announced plans to move into Scandinavia. Unfortunately it won't be Netflix offering Game of Thrones and Boardwalk. It could have been them if Ted Sarandos had the vision to look at HBO as a must have instead of letting the deal get made by competitors.

It happened again today--Amazon gets Epix for prime members. The stock is down almost 7%. As always, they shrug it off and marginalize it:

http://online.wsj.com/article/SB1000087239639044357190457763...

Netflix says Epix only represents around 5% of its viewing hours, adding that it is focusing resources on content that viewers are more interested in watching. But Amazon Prime costs less per month than its service and offers free two-day shipping.

Heard the same rationale for losing Starz--it was a small part of content--not worth the expense. Too bad for anyone looking for Disney movies.

Get enough small losses and put them together and Netflix becomes the also ran in streaming. There is no profitable niche carrying old programming and ignoring the new stuff. It's a grave.

I still own a few shares that are about flat. I am waiting for Hastings to get a Eureka! (and the series latest season)moment and get Ted out and find a new more aggressive and imaginative content chief and BFF.