They created the market and they are about to get lost in it...
Netflix Stock Drops on Amazon News
Thursday October 14, 9:16 pm ET
Netflix Stock Drops on Anticipation of Amazon Competition
LOS GATOS, Calif. (AP) -- Shares of mail-order DVD rental company Netflix Inc. plunged Thursday after it warned that it was slashing its subscription price in anticipation of Amazon.com Inc. entering an already crowded market.
In after-hours trading, Netflix share price fell more than 35 percent, or $6.18, even after it announced it had posted its most profitable quarter. The company's stock traded up 8 cents a share at $17.43 Thursday on the Nasdaq Stock Market.
"We recently learned from several sources that Amazon is likely to enter our market soon," Netflix chief executive Reed Hastings said during a conference call with analysts. Hastings didn't specify who the sources were.
Netflix also announced it was cutting its monthly fee from $22 a month to $18. The company had earlier this year raised its fees from $20 to $22.
The company also said it was temporarily halting its expansion plans into the United Kingdom to confront the expected challenge from Amazon, which declined to discuss its mail-order plans in detail.
"Our customers have encouraged us to offer low-priced online DVD rentals, but we have no announcements to make at this time," Amazon spokeswoman Patty Smith said
Wal-Mart Stores Inc. and Blockbuster Inc. have already launched similar mail order DVD services.
For the three months ended Sept. 30, Netflix reported earnings of $18.9 million, or 29 cents per share, compared with $3.3 million, or 5 cents per share in the year-ago quarter. Revenue for the period was $141.6 million, almost double the $72.2 million posted last year.
Excluding the amortization change, profit totaled $14.9 million, or 23 cents per share.
Adjusted income was $22.6 million, or 35 cents per share, compared with $6.1 million, or 10 cents per share in the year-ago period. Excluding the changes, adjusted income was $18.6 million, or 29 cents per share.
Analysts surveyed by Thomson First Call predicted earnings of 32 cents per share on revenue of $140.6 million for the period.
Netflix ended the quarter with about 2.2 million subscribers after having acquired 590,000 new trial subscribers during the period. In last year's quarter, the company acquired 383,000 new trial subscribers.
Looking forward, Netflix said it anticipates an increasingly competitive market in the coming year.
http://biz.yahoo.com/ap/041014/earns_netflix_3.html
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Competition from Amazon spurs Netflix to cut price
Netflix expects Amazon.com to offer a competing video-rental service.
New competition spurred the California company, the largest mail-order video-rental service, to announce yesterday that it will cut its monthly video-rental subscription price — a move that pushed its stock down $6.18, or 35 percent, to $11.25 in after-hours trading.
Netflix Chief Executive Reed Hastings said on a conference call with investors and analysts yesterday that he heard rumors two weeks ago that Seattle-based Amazon, the largest online retailer, would offer a Web-based video-rental service. He said he had been able to confirm the plan, though he didn't say how he got the information.
Video-store chain Blockbuster started an online service in August. In response to the competition, Netflix will cut the price of its subscription service to $17.99 a month from $21.99 on Nov. 1.
Amazon.com spokeswoman Patty Smith declined to comment on whether the company will offer video rentals. "Our customers have encouraged us to offer low-priced online DVD rentals, but we have no announcements to make at this time," she said.
http://seattletimes.nwsource.com/html/businesstechnology/2002063788_bizbriefs15.html
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Blockbuster's online sales boom
It claims most customers are coming from Netflix
By Herb Greenberg
CBS MarketWatch.com
Oct. 14, 2004
SAN DIEGO (CBS.MW) -- On its conference call Thursday, Netflix conceded that its higher-than-expected subscriber cancellation rate in the third quarter "seems to coincide" with the rollout of Blockbuster's competing online DVD rental service. Netflix went on, however, to downplay the significance of Blockbuster as a competitor.
Oh, yeah? In response to my query -- and through a spokesman -- Blockbuster CEO John Antioco said that Blockbuster has added more subscribers in a half a quarter than Netflix "added in its first year and a half of existence. And we added more net paid subscriptions in the first half a quarter than Netflix added for the entire quarter."
"We are confident," he added, "that we will end the year after only four and half months with more subscribers than Netflix had after its first three and a half years."
Where are the new customers coming from? According to Blockbuster's research, the spokesman says, 70 percent came from Netflix. Antioco added, again through the spokesman, that "we are determined and convinced we will be the leader in the online rental space, no matter what it takes."
http://cbs.marketwatch.com/news/story.asp?guid=%7B60D80709-6FDF-46A8-AA82-353A517D5311%7D&siteid=google&dist=google
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