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  (Source: venturebeat)
Verizon is reportedly thinking about purchasing Netflix in an effort to make its way into the video streaming/DVD rental business and to give Netflix a boost as well

Just last week, reports indicated that Verizon was preparing to launch a video streaming service that would rival the likes of Netflix and traditional cable TV. However, according to Fox Business, Verizon is reportedly thinking about purchasing Netflix in an effort to make its way into the video streaming/DVD rental business and to give Netflix a boost as well.
 
While Verizon has a large user base with its internet, phone, data and wireless services, it would have had to come up with a unique video streaming service that challenged already-established Netflix as far as content and subscription prices. This wouldn’t be an easy task, and taking hold of Netflix would give it an automatic 23 million customers.
 
The deal could be advantageous for Netflix as well, since it has been struggling this year after raising prices and changing plans back in July. From there, the once unstoppable video giant continued ticking off customers with antics such as the loss of Starz content after the premium subscription channel refused to renew its distribution deal, launching a DVD spinoff business called Qwikster requiring a completely separate account, and then changing its mind about the Qwikster idea altogether.

So far this year, Netflix stock has fallen 57 percent. Just last month, it announced a bleak 2012 outlook and its shares dropped to their lowest point since March 2010.

Despite the potential advantages that most reports are pointing out, the potential disadvantages could likely outweigh any benefits listed above. For instance, Verizon could get greedy and decide to limit the Netflix service to Verizon customers only. Also, Netflix has been known for its rebellion against traditional cable TV by offering its own business model with cheaper monthly services and a growing amount of content. If Netflix were to fall under Verizon's thumb, this likely wouldn't be the case anymore.

According to Porter Bibb, managing partner at Mediatech Capital, Verizon may partake in a "bidding war" for Netflix that could end in a $4.6 billion purchase by Easter 2012. However, neither Verizon nor Netflix have confirmed the rumor.

Netflix shares jumped 6.2 percent to $75.26 after the announcement Monday.

Sources: Fox Business, Bloomberg



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Classic
By Raiders12 on 12/13/2011 10:01:25 AM , Rating: 4
With Netflix and Verizon price increases I would love to see the new business model.

With Verizon's policies, they will take 1 DVD off each rental plan, cap data at 4 GB, and with Netflix policies they will supplement the cuts with additional charges of $2/mo.




RE: Classic
By kleinma on 12/13/2011 10:17:59 AM , Rating: 2
Verizon <> Verizon Wireless

Verizon owns about half of Verizon Wireless, but they are run seperately and very differently.


RE: Classic
By nafhan on 12/13/2011 10:43:25 AM , Rating: 2
quote:
Verizon owns about half of Verizon Wireless

Which side of that "about half" you are on makes a HUGE difference. Verizon owns a controlling interest Verizon Wireless. Plus, there's been talk lately about how Verizon is scaling back it's FiOS and hardline business in general in order to focus more on the wireless side of things.


RE: Classic
By ICBM on 12/13/2011 11:28:47 AM , Rating: 2
By half, you mean one half has reached the maximum they can rip people off, and the other half has room to milk more money out of their customers?


RE: Classic
By StevoLincolnite on 12/13/2011 11:59:09 AM , Rating: 2
quote:
With Verizon's policies, they will take 1 DVD off each rental plan, cap data at 4 GB, and with Netflix policies they will supplement the cuts with additional charges of $2/mo.


Actually if you look at the Aussie Telco's...
Generally they have fairly piss poor data caps to.
However allot of companies partner up with 3rd party video streaming companies (Or start their own) and offer them data free.
People then buy Internet and movies which also ties them into the internet plan because if they move to another provider it will no longer be offered data-free.

My ISP here in Australia offers it's own gaming servers, streaming services, DVD rental... File hosting with 10's of Terabytes of files and even Steam all data free so they don't impact my monthly allowance.

If the US goes this way it will be interesting.


RE: Classic
By sigmatau on 12/13/2011 2:03:55 PM , Rating: 2
WOW! People bitched and moaned about the $5 increase from Netflix.

Imagine what they will say when they get billed double for 1 dvd a month instead of what they are getting now.


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