Netflix Sails Ahead: Q4 Earnings Beat Economy and Expectations

netfilx earnsMany companies are struggling through the economic environment with weak earnings or weak outlook.  Netflix, the mail-order DVD rental pioneer, is so far managing to sail through on smooth waters.  Confirming “strong results” previously hinted, the company announced fourth quarter and year end earnings today ahead of expectations.

Revenue for the fourth quarter was $359.6m, a 19% year over year gain and a 5% sequential improvement.  Earnings, at 38 cents a share, were up 65% year over year.    Analysts had expected EPS of 34 cents on revenues of $354m. 

Admitting the kind of mistake many are happy to accept, CFO Barry McCarthy said on the conference call,  “Our October forecast of slowing growth turned out to be wrong.”

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Blockbuster and Sonic Solutions Buddy Up for On Demand Movies

blockbuster on demandMovielink and CinemaNow were among the early entrants to pace digital movie delivery.  Investors ponied up tens of millions to the promise: movies beamed on demand straight to viewers over the Internet.  Movielink and CinemaNow both burned out; ideas ahead of the market opportunity.

Blockbuster and Sonic Solutions stepped in in each case to opportunistically take advantage of the early birds’ failures; each buying up the assets and content libraries for pennies on the dollar.  Blockbuster bought Movielink for $6.6m in 2007.   Sonic Solutions grabbed CinemaNow last month for about half of that.

Now, in a new alliance, Blockbuster and Sonic will pool their resources and strengths in a joint venture positioned to try and carry them both forward into the eventual digital delivery transition.

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Connected Devices: LG TVs to include built in Netflix Streaming Functionality

netflix lg small tv metueIn October of 2007, Netflix CEO Reed Hasting spoke to analysts about convergence and digital movie distribution.   In the remarks, he defined three long term goals for the company: “to expand the content [Netflix] offers online.”  “To make it inexpensive and easy for consumers to view that content on the television,” and lastly, “to understand what the financial model for the hybrid service will be in the long term.”  Throughout 2008, the company made progress on all three, especially one and two.  Heading into 2009, the company looks poised to keep pushing forward.

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Redstone Defaults on Debt, Lenders Look the Other Way

movie debtThere’s an old saying that says if you owe a bank a thousand dollars they own you but if you owe them a billion, you own them.  While the numbers in the saying vary, today, media mogul Sumner Redstone seems to have validated the theory of the adage: if you owe enough, you’re in control. 

Redstone’s National Amusements, the controlling shareholder of CBS Corp and Viacom Inc, had $800m out of a total $1.6b  in debt obligations due to be repaid Friday.   The bill wasn’t paid.  Instead, the 15 lenders provided National Amusements an indefinite extension, the New York Post reported.

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Hack Watch: iPhone 3G Unlocked? BD+ Secured?

unlock iphone 3gWith Digital Rights Management (DRM) there’s a constant cat and mouse game at play.  Companies spend money to restrict their product’s use, hackers spend time trying to set it free.   Recently, in two different battles from the same war – both sides scored victories.   For the hackers, a group called the iPhone Dev-Team is reporting they’ve unlocked the iPhone 3G. For the content industry, the Blu Ray DRM standard BD+ has taken back some ground.

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Project Kangaroo Runs Into Antitrust Issues

project kangaroo stopIn the U.S. NBC Universal and News Corp’s joint video on demand service, Hulu, has proven to be a big success, drawing both audience (Quantcast data) and advertisers.  In the U.K., BBC Worldwide, ITV and Channel 4 had hoped to follow a similar path with their own web service, Project Kangaroo (also known as UKVOD).  Their route now looks complicated, if not potentially impassable.

Wednesday, after a prolonged review, the U.K antitrust authority, the Competition Commission (“CC”) issued a provisional finding that the joint venture would unfairly restrict competition. Specifically, the CC believes, as currently defined, Project Kangaroo will lessen essential competition in the supply of UK TV Video on Demand programming.

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Need a Miracle? Need Tickets? Try Blockbuster

bbi lyv ticketsBlockbuster wants to be your entertainment superstore.  They’ll sell you electronics, rent you a movie or now, even get you into a concert.

Today, Blockbuster and Live Nation announced a three year deal to make Blockbuster the brick & mortar retail outlet for Live Nation’s soon to be launched concert ticket service.  500 stores in cities home to Live Nation operated venues will take on the new sales task.

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