News Column

Netflix Shares up on Report of Cable Talks

October 14, 2013

Associated Press

NEW YORK (AP) — Shares of Netflix Inc. rose Monday in the wake of a newspaper report that the online TV and movie streaming company is in talks with several cable companies to make its service available to cable customers.

THE SPARK: The Wall Street Journal reported Sunday that Netflix is in discussions with Comcast Corp., Suddenlink Communications and other cable providers to offer its streaming service on cable set-top boxes.

The newspaper cited anonymous sources and said that the discussions are in their early stages. It said that no deal is imminent.

Netflix did not immediately respond to an emailed request for comment.

THE BIG PICTURE: Netflix announced its first deal with a cable company in September. That deal, with U.K. company Virgin Media, will put Netflix's service on Virgin Media's TiVo set-top boxes. That deal sent shares higher at the time.

Cable deals can make Netflix easier to use for customers, as users don't need to switch devices.

THE ANALYSIS: Benchmark Research analyst Mike Hickey said in a note to clients that cable companies have been "reluctant" to offer streaming services, because the technology is seen as "broadly competitive with their traditional content offerings."

Netflix has been acting more like a TV network lately. It has been investing money in developing its own programming.

This year it released several original programs, including "House of Cards" and a reboot of "Arrested Development." There are plans for more original content. Earlier this year, it struck a deal to run original TV shows for children from animation studio DreamWorks Animation.

SHARE ACTION: Up $16.34, or 5.4 percent, to $316.19 in midday trading Monday. Its shares are trading nearly five times higher than they were a year ago. Netflix's stock has recovered since it raised prices for its services in July 2011. The price increase angered customers, sparking a stock selloff. Shares hit an all-time high of $334.50 earlier this month.


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Source: Copyright 2013 The Associated Press. All rights reserved.


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