Verizon May Be Pondering Netflix Purchase
December 13, 2011 9:19 AM
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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
, 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
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.
jumped 6.2 percent to $75.26 after the announcement Monday.
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all telcos are rippinjg customers
12/28/2011 3:21:12 PM
Charging extra 10-15 bucks for the 4gb per month vs the 2gb limit per month of a new cell phone data plan has nothing to do with that about of usage amounts to a end user. Its all about money for them, as the data usage extra is nothing due to with the lines already in place to handle 100x those amounts. But the revenue they make for doing such is more money for them, nothing more then that.
All telcos currently have more dark-fiber then lit fiber for their long haul usage for data bandwidth.
Data capping is a for profit business model, not an actual barrier for transmission speed limitations, that would effect real world usage. As our current long haul sub systems that move the worlds data around are around 30% utilization most days, even with billions of daily users.
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