Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Netflix (NFLX) and the Streaming Wars -- Ignore unavailable to you. Want to Upgrade?

To: JakeStraw who wrote (382)	3/8/2011 3:01:36 PM
From: i-node	Read Replies (1) \| Respond to of 2280

So, Goldman, who owns half a billion worth of Facebook, tells us how Facebook is going to unseat Netflix. In a backhanded sort of way. ================================= Analyst Ingrid Chung sees no immediate impact from Facebook's test with digital movies, but calls the news an "incremental negative" for Netflix shares. NEW YORK - Facebook's decision to test digital movie rentals and purchases with Warner Bros. is no immediate threat to Netflix's streaming service, but creates a new potential longer-term online video competitor, Goldman Sachs analyst Ingrid Chung said Tuesday. "Facebook’s foray into pay-per-view does not impact our Netflix estimates," she said in a report. "However, Facebook represents a new potential entrant that few in the investment community were concerned with prior to this announcement, so we believe it does indeed represent an incremental negative for Netflix shares." She added that Facebook "could some day become a credible threat to Netflix." For now, Facebook seems to position itself as a pay-per-view platform, "which is more of a threat to other forms of VOD (such as iTunes or Amazon)," Chung said. She added that the social networking site "lacks content, does not have wide distribution across devices that connect to the living room TV, has few people on the payments platform and does not have an incumbent business that is under threat from increasing online video viewership." Longer-term, it could become a challenger and concern for Netflix, she argued, citing Facebook's more than 500 million active users, compared with Netflix’s 20 million subscribers. "The “wisdom of friends” could be a bigger driver of movie viewership than the “wisdom of crowds"," Chung also said. Plus: "We believe that many of the issues outlined above could be fixed over time, including the gap to the living room TV." Netflix shares had opened lower on Tuesday following the Facebook-Warner Bros. news. Goldman earlier this year invested $450 million in Facebook.