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hrsd

This will suck. Amazon just isnt as creative as nflx. people compare netflix with aaple and google in terms of creativity. Amazon is just a internet walmart whose core business isnt video rentals. If this deal goes through, it will be the death of netflix. It wll be a great thing for BBI. They must be praying for that and must be gearing up for the exodus of nflx subscribers.

McDahling

While I don't like the idea of Netflix being bought out, I would MUCH rather they be purchased by Amazon, then those idiots at Yahoo who think their something special, when Google will always be the number 1 search engine. Or Bill Gates and his army of assholery. Netflix is bought out by Microsoft, I join BB. However, Mike your right about the Amazon/Netflix connection. It is very there and they share quite a bit in common. But I would really like it if Netflix just stayed there own though, and didn't make it seem like this was just a money-making venture for Hastings.

Werd2406

If this become fact, then I hope this will soon mean we will be able to download movies from Netflix onto our TiVo since TiVo now has the deal going on with Amazon.

leonardodicrapio

Amazon would have to charge sales tax in a lot more states (going from about 4 to 30+) if they purchased Netflix. But supposedly there might be some sort of Internet Sales Tax that could be in the works later this year.

There is speculation at Techdirt that a buy-out could mean shutting down some Netflix distribution centers (which would probably be bad no matter what) to avoid adding sales tax in too many more states. But if this means I could get Unbox videos through Netflix this would be intriguing.

http://blogs.zdnet.com/BTL/?p=5302

http://www.techdirt.com/articles/20070606/123509.shtml

http://www.nytimes.com/2005/06/27/technology/27ecom.html?ei=5088&en=7027d93440949887&ex=1277524800&pagewanted=all

I won't make any comments at Barron's Online about RickLogic (Richard Hanley), but I will say here that an approximately $2.1 Billion price tag is about a 40% premium to what Netflix is worth today (about $1.5 Billion). But if that offer were to come in Amazon stock (which looks to be rather expensive trading at a P/E over 100 and a forward P/E over 60), the would probably not dilute Amazon's earnings at all (in fact it would probably help AMZN's earnings).

http://www.forbes.com/2007/06/06/amazon-netflix-buyout-tech-cx_0606paidcontent2.html?partner=yahootix

http://blogs.barrons.com/techtraderdaily/2007/06/06/netflix-shares-higher-on-rumors-of-amazoncom-bid/

The call price action is interesting (425% gain in one day), but the calls were probably pretty worthless on Tuesday (06/05/07) with Netflix closing at $21.31 on the 5th.

"The heavy volume in the calls giving investors the right to buy Netflix at $22.50 a share by next Friday suggest investors anticipate an imminent announcement, Wilkinson added.

Those contracts closed at $1.05, up 85 cents on the day. But he figures much of the call volume of 18,928 contracts could have been the result of traders booking winning trades made earlier in the day."

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070606:MTFH00653_2007-06-06_21-58-07_N06435125&type=comktNews&rpc=44

Manda

Ditto what Werd2406 said. If I could get Watch Now titles downloaded to my TiVo, I'd never have to leave the house again!

Ricklogic

Netflix is a mail order company with a heavy manual process. For each and every DVD that passes through Netflix, an envelop must be manually opened, each disc must be manually inspected, and each outgoing DVD must be manually stuffed in an envelop. Netflix now has about 44 distribution centers in which many low-paid workers do this work. The work is so potentially damaging to the muscles and tendons that it is mandatory for the workers to stop working every hour and a half to do mandatory exercises for half an hour. Do a Google search. Amazon would not want to inherit the potential headaches.

With VOD, IPTV, DVD rental kiosks, video games and all kinds of interactive entertainment being made available, how likely is it that Netflix is worth $2,000,000,000 to Amazon or to anyone else?

Amazon is not interested in Netflix for WatchNow. Amazon has more download rights than Netflix.

prozac


There are pros and cons to a buyout. Based on what little I know about buyouts, I perfer NF to remain the way it is. True if Amazon were to buy NF then alot of new things would be comingout way but alot we love about NF would be lost too. NOt sure what would change but change would happen both good and bad. It's fine the way it is and NF is still a growing company.

I doubt it.

type-cast

I would love for Amazon to buy out Netflix or at least partner with IMDB. Maybe then they'd let us SORT reviews by various criteria, like IMDB and Amazon have done for like a decade.

type-cast

"I won't make any comments at Barron's Online about RickLogic (Richard Hanley),"

Apparently you won't comment on how you know that RickLogic and Rick Hanley are the same. Google and Richard Hanley and you only get a couple hits on this site. With "Rick Hanley" you get two other sites. Neither of them are proof that the two users are the same. There is more than one person named Rick. I'd like to see proof and relevance for Leo's claim.

aussieguy

Where there is smoke there is fire. The top brass have been selling off their netflix stock the past 3 months. The writing is on the wall....and yes Netflix will be acquired by someone.....Amazon would be the most logical candidate in my mind.

Ricklogic

Recently, Hastings gave the following gifts per SEC filings of Insider Trades:
On May 30, 2007, Hastings gifted 46,000 shares
On June 4, 2007, Hastings gifted 10,000 shares
http://www.form4oracle.com/company?cik=0001065280&ticker=nflx

At the time of gifting, the shares were valued at about $1,200,000. If a sale is really happening the gifts would have been worth $1,800,000. Why would he not wait a week or two to give the gifts if a sale was really in the works?

This whole thing was created by some piece of crap analyst named Brian Bolan to help kick in a massive short squeeze.

Edward R Murrow

Any NFLX employees remotely involved with any part of the business process involved with the physical DVD's had better update and circulate resumes pronto.

type-cast

I find it disrespectful to refer to users by any name other than the one they use. People who engage in such annoying smear tactics do not deserve to post. Apparently Leonardo has not outgrown the childish habit of referring to people by names other than their own. You have never answered this, Leo, so I guess it just shows you are deranged. Ordinary people use the name someone posts under, to respond to them. You have gone from Rickillogical to Richard Hanley. What's the point?

leonardodicrapio

"Apparently you won't comment on how you know that RickLogic and Rick Hanley are the same."

It doesn't take a brain surgeon to figure it out, and Rick said he posts at other sites a few weeks/months ago. And Rick basically just cut and pasted his comments (one of which I quoted below) from Barron's (which I provided a link to).

"Netflix is a mail order company with a heavy manual process. For each and every DVD that passes through Netflix, an envelop must be manually opened, each disc must be manually inspected, and each outgoing DVD must be manually stuffed in an envelop. Netflix now has about 44 distribution centers in which many low-paid workers do this work. The work is so potentially damaging that it is mandatory for the workers to stop working every hour and a half to do mandatory exercises. Do a Google search.

With VOD, IPTV, DVD rental kiosks, video games and all kinds of interactive entertainment being made available, how likely is it that Netflix is worth $2,000,000,000 to Amazon?

Comment by Richard Hanley - June 6, 2007 at 6:09 pm"

"I find it disrespectful to refer to users by any name other than the one they use."

I posted a link to the Barron's article and said I wasn't going to respond to Rick there. Why do you need to make two posts about a non-issue? Do you have nothing to say about the Amazon buy-out rumor?

leonardodicrapio

"At the time of gifting, the shares were valued at about $1,200,000. If a sale is really happening the gifts would have been worth $1,800,000. Why would he not wait a week or two to give the gifts if a sale was really in the works?"

Rick, you should have done a little more extensive research. The gifts were made indirectly by a trust that is his name and one other person's name (his wife's maiden name?). Reed did not sell the stock directly. And you do already know that he sells large chunks of stocks like this anyways on a regular, automated basis every single week for months now so this shouldn't have surprised you in the slightest bit anyways (although you know it will provide some shock value to those who are uninitiated/uneducated about Reed's weekly habits).

CJ

Sounds like a logical and complementary merger of business functions - lots of synergy apparent. Tax implications are really non-existent with today's accounting magic. And Reed has a history of starting then selling businesses when they mature.

I'd love to see IMDB for searching and hyperlinking integrated with the Netflix rental service, and then if you wanted to buy the rental you just use Amazon's "one-click." Amazon could put the Netflix recommendation engine to use - the current one seems a little lame.

Neither Yahoo or Microsoft are good fits with Netflix - and besides both are too slow and cautious to take such a risk.

Edward R Murrow

"Any NFLX employees remotely involved with any part of the business process involved with the physical DVD's had better update and circulate resumes pronto."

Come to think of it, if this does happen then why would Amazon retain anyone? If any company knows how to build a scalable web site, it's Amazon.

Firstlawofnature

If AMZN won't buy NF b/c of the state tax issues how was there any truth to the rumor 2 years ago that AMZN was about to enter the DVD by mail business?

Who would buy NF? Anyone that wants a leg up in the upcoming digital era.

Old Timer Too

Looks to be a lot of speculation... Anyway, there are some advantages on both sides of the quarter.

One, Amazon has some exclusive agreements of which neither NF or BB has access to. The Calanetics titles are one example.

Amazon may be able to take advantage of even bigger purchases of titles for NF and sales and provide a better venue to sell excess NF inventory. NF would gain considerably in the process.

The sales tax thing is a side note, and really not worth mentioning, other than its obvious disadvantage to the existing customer base. The states would love it. The advantage would go to deepdiscount mostly because it is in only one state.

Interestingly, I purchase CDs from Archive and Berkshire. Berkshire ships from Massachusetts. Archive has a number of shipping facilities. No tax in either case, but no shipping facility in Illinois.

If shipping facilities are the key, then we should be paying tax for NF and BB, since both ship from within the state (most of the time). The key may be that these are rentals, not purchases.

From that standpoint, unless Amazon plans to use all the shipping facilities as distribution points for purchase...

And when I bought my projector, I purchased it from Tiger Direct and paid sales tax (they have a two outlets in the area), but the projector was shipping from Amazon... Go figure. I still had to pay sales tax.

Internet Sales Tax? A problem area unless the Feds are planning on collecting for the states... otherwise, it is just another form of federal taxation, for which the U.S. Gov badly mangles and misspends (misappropriates) anyway.

Getting back to the issue at hand. No to NF and any other suitor. Google would be bad because it has no real presence in retail. Microsoft would be bad because they don't own the product - they'd just tack on their percentage (which would probably result in a higher fee for the same service... uh, if MS continued NF's service).

Amazon and NF would be a good match, especially if not a lot changed. I suspect that throttling would become a thing of the past (a very good thing for everyone) if that did happen. I just might sign up for the service again, especially if NF broadened their coverage to include more than one version of any particular title!

Old Timer Too

Apologies on this one ArkivMusic is the vendor... I used the "generic" term.

Edward R Murrow

Amazon is going to get a better price for Netflix now that BBO has just dropped prices.

"DALLAS (AP) -- Blockbuster Inc. changed its subscription rates for mail-order DVDs, stepping up its competition with rival Netflix Inc. over what the movie-rental chain says is a market expected to grow by 43 percent in 2007.
Blockbuster's cheapest plan is $4.99 per month, but the company did not provide details. It cut the cost of its most popular plan, which allows customers to have three movies at any one time, by $1 to $16.99 per month."

Ouch, that's gonna' leave a mark on NFLX since they *lowered* prices rather than raised them.

Firstlawofnature

BBO by mail w/ ~4 coupons per month was $3 less and it didn't make too much of a difference. $1 less is not much difference.

BBI is doing pretty well at knocking down NF's share price. If only they knew how to make money for their shareholders.

Edward R Murrow

That's all interesting, but $1 per month in my pocket is better than a $1 of mine in someone else's pocket.

As a customer of BBI and NFLX - not a shareholder, I don't really care about shareprice.

For all those who posted about BBI potentially raising prices for BBO, today's announcement must be burning and stinging.

leonardodicrapio

Ho hum. NetFlix could cut the prices on all but their $4.99 by $1 per month and still make a profit. It might be a slim profit, but they would do all right.

After all, there are a significant number of people who are already grandfathered into a 3-Out $16.99 per month plan (pretty much anybody who has been on that plan for more than one-and-a-half years -- that's when my rate went down from $17.99 to $16.99 in January 2006).

leonardodicrapio

This is from Blockbuster's website -- so this mean I could sign up for the $4.99 Online only plan, and then upgrade it a few days later to the $23.99 Total Access plan? I could then cancel about four weeks after that and get 4-DVD's out for a month for a little more than $5 after taxes, etc.

"Account Updates

* Changes to your billing amount will not take affect until your next billing date.
* Downgrading to a lower number of DVDs won't take affect until your next billing date.
* However, if you switch to a plan with more DVDs at-a-time, this change will go into effect immediately. We'll send you additional DVDs from your Queue right away"

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