Netflix Shares Continue To Dive
Shares of Netflix continued to slide today (Wednesday) after dropping 5 percent on Tuesday following an earnings report that disappointed Wall Street. They were down nearly 2 percent at midday. Analysts were particularly concerned about the company's continued losses from overseas expansion and the drop in the number of subscribers for its DVD-by-mail service. In a note to clients on Tuesday, media analyst Eric Wold of B. Riley & Co. suggested that some of the 240,000 DVD subscribers that Netflix lost may have gravitated toward Redbox Instant by Verizon, which gives customers not only access to movies on Redbox kiosks but also 5,000 titles via Internet streaming -- and all for the same $8.00 price that Netflix charges for the streaming or DVD service alone. We continue to believe that the $8 combo disc/streaming subscription plan offered by Redbox Instant will represent an attractive option to Netflix DVD-only subscribers that are paying the same price for disc access only, said Wold, noting that Redbox is apparently waiting until the third quarter to roll out a major marketing campaign -- when the summer blockbusters become available on DVD and Blu-Ray.