Tuesday, April 24, 2012
Gavin O'Malley, April 24, 2012, 11:29 AM
Street Reaction To Netflix Revs MixedThe Verge

Trying to put a rocky 2011 in its rear-view mirror, Netflix this week boasted $870 million in revenue for its fiscal first quarter. “The company also added almost 3 million subscribers to its streaming service -- 1.74 million domestic and 1.21 million for international -- bringing it up to a total of 26 million users streaming worldwide,” The Verge reports.

Alas -- as demonstrated by a stock slip this week -- “Wall Street remembers 2011,” writes AllThingsD. “Specifically, Wall Street doesn’t believe [Netflix CEO] Reed Hastings’ prediction that his company will add 7 million customers to its U.S. streaming-video service this year.”

“The stock slumped after Netflix said subscriber additions would slow down in the second quarter,” VatorNews reports. “The Los Gatos, Calif.-based company said it's projecting 23.6 million to 24.2 million subs in the U.S., up 200,000 to 800,000 from the first three months of this year when it reached 23.4 million subscribers, up 1.7 million from the prior quarter.”

“Netflix's first-quarter financials came in better than expected after a dismal 2011, but it wasn't enough for investors to overlook a weak revenue outlook,” notes CNNMoney.com. “Netflix said it may turn a profit again in the second quarter. The company didn't rule out a loss, but its forecast ranged from a loss of 10 cents a share to a profit of 14 cents a share.”

“Netflix’s ability to source content is a worry,” writes The Next Web. “If it has less total content, it has a harder time providing a value propostion [sic] to consumers, who may leave the service. That in turn would cut revenues.”

As expected, the company’s DVD business saw another decline, down 1.08 million customers to 10.09 million total -- about 7 million of which also subscribe to streaming. Going forward, Netflix expects the physical media side to continue its decline, albeit at a slower pace than past quarters.

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  • Gavin O'Malley, April 24, 2012, 11:38 AM
  • Netflix Calls Out Comcast (Again) In other Netflix news, CEO Reed Hastings is once again suggesting that Comcast is competing unfairly in the streaming-video sector. "Comcast caps its residential broadband customers at 250 gigabytes per month," Hastings explained in a letter to investors, this week. "On the Xbox the Netflix app, the Hulu app, and the HBO GO app, are all subject to this cap. But Comcast has decided that its own Xfinity Xbox app is not subject to this 250 gigabyte cap. This is not neutral in any sense." In other words, Hastings believes Comcast is giving its own Xfinity Web-video service a competitive advantage, explains CNet. Not the first time, however, “Hastings has begun to regularly complain in public about Comcast's decision not to count Xfinity's data against the company's cap,” CNet notes. “Netflix doesn't typically criticize competitors in public, so this is likely a sign that the issue is important to the Web's top video service.” Recently responding to one of Hastings’ broadsides, Comcast explained that the data caps don't apply to Xfinity because its data travels over its own private IP network, and not over the public Internet. According to Hastings, however: "The Xbox is a pure Internet device with a single IP address, works over a consumer's home Wi-Fi, and data to the Xbox is Internet data," Hastings wrote.   Read the whole story...
  • The Matter With Mobile Microsoft How goes Microsoft’s big mobile comeback? By some measures, not so great. In the three months ending in February, for instance, Microsoft's share of U.S. smartphone subscribers was 3.9% -- down from 5.2% last November and 7.7% last February, according to comScore. “Even now, more than a year after Microsoft started shipping Windows Phone 7 devices, U.S. mobile customers are getting rid of Microsoft devices faster than they're buying new ones,” remarks ReadWriteWeb. “Longer term, Microsoft's share has been in a freefall: comScore had it at 18% at the end of 2009, and 36% in late 2007, the year Apple introduced the iPhone.” Since then, Apple and Google have secured the bulk of the smartphone market, with more than 80% of U.S. smartphones, by comScore's latest calculations. What’s the matter with Microsoft? For one, “Microsoft's phones -- though decent -- just aren't good enough to demand attention,” suggests RWW. “They're certainly better now than they used to be -- especially the new Lumia series from Nokia -- but that isn't enough. To cause any real damage to Apple or Google, Microsoft's phones would have to be dramatically better than the competition, and they just aren't.”       Read the whole story...
  • Chirpify Brings Commerce To Twitter Chirpify -- a platform that transforms Twitter from a broadcast platform into a transactional, ecommerce-friendly one -- has secured $1.3 million in series A financing, led by Voyager Capital, with participation from Geoff Entress, BuddyTV CEO Andy Liu, former Facebook exec Rudy Gadre, Hootsuite CEO Ryan Holmes, and TiE Oregon Angels. Until recently known as SellSimp.ly, the startup is pioneering a Twitter-based commerce platform that lets brands and consumers buy, sell, donate and transact through tweets -- all without leaving Twitter. “Since launch,” TechCrunch reports, “Chirpify has seen growing traction, thanks, in part, to a promotional campaign launched at SXSW, called ‘Tweet-a-Beer,’ which used the startup’s API to allow people to buy each other a pint over Twitter.” According to Chirpify Founder Chris Teso, the campaign was so successful that, for a time, two new users where signing up every second. Adds TechCrunch: “Although it’s slowed down a bit since, the campaign proved that direct commerce over Twitter was not only possible, it was so easy a tweet could do it.”   Read the whole story...