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The Best Way to Watch Movies Without Paying a Fortune

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By Bruce Watson

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About two years ago, I decided to leave Netflix. There were a lot of reasons, but the big one was their decision to split their streaming video and their DVD service. My daughter, who was addicted to “Phineas and Ferb,” was foursquare in favor of the streaming service. I, on the other hand, was unimpressed with the offerings but liked the DVDs by mail.

Keeping both streaming and DVDs, unfortunately, would have doubled our monthly Netflix bill. Add in the fact that the streaming in our building was insanely slow, and the upshot was that my wife and I decided that we could come up with about a billion better ways to spend our money — and at least three or four better ways to watch movies and TV shows.

The first thing we did was sign up for Amazon Prime. For $79 per year — about $5 per year less than Netflix’s basic streaming service — it lets users stream unlimited movies and TV shows. Beyond that, though, it also includes free two-day shipping on Amazon orders and allows users to borrow Kindle books for no additional cost. Perhaps most important, Amazon’s streaming service offers every “Phineas and Ferb” episode at speeds a lot faster than Netflix (at least in our apartment).

Streaming is all well and good, but what about the films I wanted to watch that aren’t available through either Amazon or Netflix? After a search of the available options, I decided to go with Blockbuster, which has a DVD delivery service that is roughly comparable to what Netflix used to offer. The difference is that it costs $10 per month — about $2 more than Netflix used to charge — and only gives me one DVD at a time. On the other hand, the selection is incredible, the service is convenient, and I haven’t had any problems.

Of course, Netflix will still mail you DVDs. The only problem is, you have to get the streaming service as well, and the two combined services would run me $16 per month. Put in context, that’s a little bit less than my total monthly payment for Amazon Prime and Blockbuster. And Netflix doesn’t give me free shipping on Amazon orders or free loans of Kindle books. With those two options, I estimate that Amazon Prime is saving my wife and me at least $10 per month.

There are trade-offs, of course. We can’t watch Netflix’s original series House of Cards, which I’m told is brilliant. And, when Netflix releases its new episodes of Arrested Development, we won’t be able to watch them, either. If they ever come out on video, perhaps we’ll get them from Amazon — along with free second-day shipping.

Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him …read more

Source: FULL ARTICLE at DailyFinance

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Neither Apple Nor Microsoft Are Buying Netflix

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By Rick Munarriz, The Motley Fool

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Netflix would apparently look good on the arm of Apple or Microsoft .

Jim Cramer played up the video service as a potential acquisition target on CNBC’s Mad Money show on Monday night.

However, instead of going the more common Amazon.com route, Cramer only singled out Apple and Microsoft as logical buyers.

Tying the knot with Netflix
Apple, according to Cramer, “needs a mobile content offering as well as something proprietary to run on Apple TV.”

He also suggests that Apple needs to make a meaty acquisition to wake up its freefalling shares: “How do we reverse that? Netflix!”

Cramer also argues that Microsoft should bid $13 billion for Netflix, a 30% premium to where it is now.

“Don’t rule it out,” he argues. “Why should this monster stay independent with its 27 million subscribers and Steve Ballmer desperate to leave a legacy?”

Both possibilities make sense, but they seem flawed after thinking them through.

Apple is being widely criticized for stashing $137 billion in cash as growth prospects peel away. The theory that the iEverything titan needs something proprietary for Apple TV isn’t necessarily a good reason to buy Netflix. If the plan is to tie Netflix only to Apple TV owners, it would be merely keeping a Ferrari in the garage. Netflix’s global appeal is easy accessibility, and that means not tethering it to any particular platform. Anything that would limit Netflix’s subscriber count would also limit its ability to pay for content.

Microsoft makes more sense, especially since it was pretty suspicious when Netflix CEO Reed Hastings stepped down from Microsoft’s board last year. There must have been something there.

However, the notion that Microsoft can sweep Netflix away for $13 billion is poorly conceived. A year ago, Netflix could’ve been had for half that price. Its stock was out of favor. Now that analysts are jacking up targets and subscribers are topping 33 million globally, do you really think Netflix and its shareholders will consider an exit strategy?

Apple, Microsoft, and Amazon could’ve probably had Netflix at the nadir of the Qwikster fiasco. They would have been welcomed as saviors.

They would’ve gotten a great price. Apple would make sure that the iOS Netflix app would be the best. Amazon could retire its less popular Amazon Prime streaming offering. Microsoft could’ve kept a cool toy from its rivals, making it the cornerstone of the new Xbox experience.

However, it’s too late to buy Netflix. The only ones buying Netflix now are tomorrow’s investors.

Recommended reading
The tumultuous performance of Netflix shares since the summer of 2011 has caused headaches for many devoted shareholders. While the company’s first-mover status is often viewed as a competitive advantage, the opportunities in streaming media have brought some new, deep-pocketed rivals looking for their piece of a growing pie. Can Netflix fend off this burgeoning competition, and will its international growth aspirations really pay off? These are must-know issues for investors, which …read more
Source: FULL ARTICLE at DailyFinance

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Google Doesn't Know When to Say "No"

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By Tim Brugger, The Motley Fool

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In addition to its outstanding financials, part of what makes Google such an attractive investment alternative is its unending drive to innovate. From space age glasses to playing with the notion of a self-driving car, Google has quickly differentiated itself from every company out there — and that’s good. But its latest initiative — bringing home delivery of food and other goodies to Silicon Valley via its Shopping Express experiment — is just plain wrong.

The latest foray
In addition to the challenge of taking on established industry leaders Amazon and eBay , Google’s Shopping Express seems more like cockiness than a genuine, long-term revenue opportunity. At this point, shopping express is in a test phase, according to Tom Fellows, Google’s product management director. For the next six months, consumers in the San Francisco area will enjoy free, same-day delivery of products from the likes of Target, Wal-Mart, and several Bay Area food and specialty shops, among others.

You don’t have to be a CFO to recognize that margins in the home-delivery business are razor-thin, which raises the question: What’s the point of Shopping Express? Some have speculated that Google wants to drive more traffic to its site, generating additional advertising revenue. As it stands, shoppers can access Amazon.com or eBay either directly or using any search engine they choose. Users of Google’s Shopping Express, so the line of reasoning goes, would boost its site activity and, ostensibly, the amount of ad revenue.

Amazon’s Prime delivery service is viable primarily because of its widespread — and growing — distribution system. eBay’s model doesn’t allow for distribution centers, but it’s not trying to generate revenue with fast, home delivery. That’s simply a carrot eBay dangles to drive more sales.

Google hasn’t said what the service might eventually cost, only that “We’re still working out our long-term pricing plan but early testers will get six months of free, unlimited same-day delivery. The pilot will expand as we work out the kinks, so please stay tuned.”

Perhaps Google plans to work out some kind of deal with the retailers associated with Shopping Express, taking a bit off the top for each item sold. Or perhaps, when the testing phase is over, Google thinks consumers will be so enamored with the idea of sitting at home, waiting on their groceries, that they’ll fork over enough to cover costs and possibly even produce a slight profit.

The future of shopping express
The history of failed home-delivery efforts is replete with such names as Kozmo, Urbanfetch, and Webvan. They all died a mercifully fast and unprofitable death, after sucking venture capital firms dry. Retail’s a tough industry, as Target, Wal-Mart, and others like them will attest. Acting as a third-party delivery service by piggybacking on other retailers, as Google Shopping Express does, just adds another layer of expense on top of margins that are already too thin. According to Value Line data compiled by New York University, retail …read more
Source: FULL ARTICLE at DailyFinance

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Netflix: Next Stop $225?

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By Rick Aristotle Munarriz, The Motley Fool

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Netflix‘s amazing run — as its shares have more than tripled since bottoming out this past summer — may not be over yet.

The stock moved 5% higher yesterday after Pacific Crest analyst Andy Hargreaves boosted his price target on the leading video service.

Hargreaves is jacking up his goal to $225 from a now obsolete target of $160.

He’s not merely keeping up with the buoyant share price. Hargreaves is also juicing up his expectations for the service’s growing magnetism.

The bullish analyst now sees Netflix serving as many as 46 million domestic streaming subscribers by 2021, higher than his earlier forecast of 43 million and well above the 27 million domestic streaming accounts that were on Netflix’s rolls when this year began.

There will naturally be heady upside outside of Netflix’s home turf. By 2015, Hargreaves sees 17 million international accounts, and that’s up sharply from today’s 6 million subscribers.

HBO is more of an opportunity than a threat
Hargreaves was on CNBC yesterday to discuss his refreshed optimism.

He was asked about Time Warner‘s HBO in light of recent comments by the premium movie channel indicating that it may make HBO Go a stand-alone option through broadband service providers.

“We think that that would be tremendously positive for Netflix, and at the end of the day that’s certainly underlining our view here, is that we think there’s a paradigm shift,” he responded. “Netflix is essentially the best in the world, we think, at executing that model.”

As a result of Netflix’s value proposition — face it, $7.99 a month for unlimited access to a growing digital library is pretty cheap — Hargreaves doesn’t have a problem seeing roughly half of the broadband-enabled homes in this country on the platform.

HBO itself will probably have a hard time competing at its substantially higher price, but it’s certainly feasible to see consumers moving away from cable and satellite in eight years and cherry-picking their channels and services.

A lot can change in three months
A target price of $225 would’ve seemed outrageous several months ago.

Coinstar‘s Redbox was teaming up with the country’s largest wireless carrier to introduce Redbox Instant. Amazon.com was busy making its own luck by slashing prices on Kindle tablets ahead of the holiday rush, as Amazon Prime subscribers can tap the leading e-tailer’s digital vault that way.

It’s hard to bet against Netflix these days, and it’s not just Hargreaves who’s growing more and more upbeat over time.

Just three months ago, the average consensus estimate from the more than two dozen major analysts modeling Netflix was a profit of $0.43 a share this year and $1.41 a share in 2014. Now those bottom-line forecasts are perched at $1.41 a share in 2013 and $2.99 a share come next year.

Hargreaves is naturally reiterating his earlier outperform rating, feeling that healthy overseas growth and natural margin expansion given the scalable model will breathe new life …read more
Source: FULL ARTICLE at DailyFinance

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What's Sending Netflix Higher Today

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By Dan Caplinger, The Motley Fool

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Netflix jumped out of the gate this morning and has kept moving higher throughout the trading session, rising almost 6%, or $10.50 per share, as of 1:45 p.m. EDT. This comes after analysts at Pacific Crest Securities gave a bullish outlook for the video-streaming giant, boosting its price target on the stock from $160 to $225.

Pacific Crest‘s analysis echoes the bullish sentiment that many investors have long believed about Netflix. Although most investors have focused on Netflix’s domestic business, its international expansion prospects are even larger, and Pacific Crest believes its overseas business could account for nearly a third of total Netflix subscribers by 2015.

That doesn’t mean Netflix will reap this success without effort. Competitors are lining up to threaten the company’s business model. Amazon.com seeks to use the power of its Amazon Prime customer base to drive demand for its own streaming content. The company has traditionally been willing to accept razor-thin margins or even short-term losses in the early stages of a budding new technology in order to build up a strong position in the industry, and that can have negative effects on the companies it’s competing against. But Netflix CEO Reed Hastings is quite familiar with Amazon’s tactics, and the company has also done a better-than-expected job of holding onto its DVD subscribers even after threatening to jettison them in its ill-fated strategic shift back in 2011. That, in turn, has held Coinstar and its Redbox service back, allowing Netflix to keep more profit for itself.

The key to continuing success for Netflix remains obtaining content that people want to see and are willing to pay for. With its recent deal with Disney , Netflix unlocked the door to a vast reservoir of high-value content, and that value will only grow as Disney’s recent acquisition of Lucasfilm adds to its established stable of potential blockbusters from Pixar and Marvel. Moreover, Netflix’s own foray into content creation with its House of Cards series could prove to be the next step in the company’s evolution and help it keep costs down while maintaining high quality.

As long as Netflix keeps growing, its share price has the capacity to follow suit. Even with the massive run in its stock, a further 15% to 20% increase to $225 per share doesn’t look out of the question for Netflix in the near future.

Find out more about Netflix by reading our premium research report on the stock, in which we look at the streaming giant’s best chances for future growth. You’ll learn about the key opportunities and risks facing the company, as well as reasons to buy or sell the stock. The report includes a full year of updates to cover critical new developments, so be sure to click here and claim a copy today.

…read more
Source: FULL ARTICLE at DailyFinance

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The Streaming Music Dance Floor's Getting Crowded

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By Rick Aristotle Munarriz, The Motley Fool

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Will the last dot-com juggernaut to enter the music subscription niche plug in the amp?

Amazon.com is apparently the latest player angling to cash in on the success that Pandora and Spotify are having in serving up streaming tunes to consumers hungry for ear candy. Multiple sources are telling The Verge that the online retailer is in the early stages of talking to the major record labels, paving the way for an on-demand service that would be similar to Spotify’s platform that has attracted 6 million premium customers worldwide.

“Premium” is the key. Spotify has 24 million active listeners, but the real model here is getting them to pay up. Pandora has struggled badly on that front. It hasn’t had a problem growing its active user base to 67.7 million as of last month, but just 13% of its revenue is coming from subscriptions.

Sirius XM Radio , on the other end, doesn’t offer a free ride on its fledgling streaming platform. Even Sirius and XM subscribers with receiver-based accounts have to shell out $3.50 a month for access to Sirius XM‘s growing online features.

It remains to be seen if Amazon’s model will be a true premium offering. Amazon has other ways to monetize an on-demand platform. As a leading seller of music downloads, the Seattle-based e-tailer can try to make it back on the sale of individual tracks and albums. A streaming smorgasbord can also be packaged into the popular $79-a-year Amazon Prime loyalty shopping program, as the dot-com darling has done with monthly Kindle rentals and unlimited video streams.

Amazon can also make a streaming offering a cornerstone feature of Kindle Fire, giving the tablet a true differentiator in a niche that’s starting to get crowded.

The only thing we know is that Amazon won’t be alone. Reports have surfaced that Google will be rolling out a pair of streaming services through YouTube and Google Play. Apple has been reportedly in negotiations with the major labels since last year, and a recent New York Post update suggests that Apple is trying to secure lower royalty rates than Pandora or Spotify before moving forward with its offering.

The market‘s going to get crowded. A shakeout will come, but the online giants can’t afford to miss out on the trend. Amazon’s tendency to absorb short-term pain for long-term gain — as it has done in marking down its Kindle products so aggressively — will serve it well.

In the meantime, check out The Motley Fool’s new premium report on the company, which will tell you what’s driving its growth and fill you in on reasons to buy and reasons to sell Amazon. The report also has you covered with a full year of free analyst updates to keep you informed as the company’s story changes, so click here now to read more.

…read more
Source: FULL ARTICLE at DailyFinance

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Is Netflix's House of Cards Built of Steel?

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By Doug Ehrman, The Motley Fool

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In the race for supremacy among streaming video services, original content has emerged as one of the critical differentiators that can allow one company to flourish where others flounder. A number of events, capped off with the release of the new original hit series “House of Cards,” has pushed Netflix  back to the top of the pack. The stock has already doubled this year.

Before you get too excited, though, it is important to remember that the company’s two biggest competitors are not exactly stagnating. While Amazon’s Prime service and Coinstar’s venture with Verizon , Redbox Instant, have different focuses, they are coming hard for Netflix.

Content wars
Perhaps the single largest battleground on which streaming video services clash is on content; the technology side of the business is another differentiator and an area in which Netflix also excels. Because content is so important, and because gaining exclusive rights to content is so expensive, original content has become one of the most direct ways that video services seek to stand out. After a weak showing from its first attempt called “Lilyhammer,” the company has created a significant buzz with “House of Cards.”

The political thriller represents several firsts in programming: It is the first time a series has had an entire season released at once, has ever been developed with the aid of big data, and that completely circumvented traditional television or cable production release. The show, which stars Kevin Spacey and Robin Wright, has been extremely successful for Netflix. While specific user data has not been released, Chief Content Officer Ted Sarandos said that nearly everyone who watched the first episode also watched the second and it was one of the most-watched pieces of content on Netflix within a few weeks of its release.

Amazon understands the importance of content as well. Fellow Fool Steve Symington recently explained that CEO Jeff Bezos has explained with usual flair that his company is already spending more than $1 billion per year for content. Its Prime service recently secured exclusive rights to “Downton Abbey,” which is alone anticipated to attract new users. The service is also expected to pilot as many as a dozen of its own original shows in the near term .

The non-content incentives
In an attempt to compete with Netflix, both Amazon Prime and Redbox Instant offer ancillary benefits aimed at making each more competitive. Prime, which costs about $7 per month — less than a standard Netflix subscription — also gives subscribers free two-day shipping on all products offered by Amazon. Subscribers are also given one free book rental per month from the Kindle Owners’ Lending Library. The company’s strategy is constantly evolving to allow it to appeal to core Amazon users.

Redbox Instant offers subscribers four DVD rentals per month at its popular Redbox kiosks. The service costs the same as Netflix ($8 per month), but users who wish to forgo the DVD access can get streaming only for $6 …read more
Source: FULL ARTICLE at DailyFinance

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Why Costco Isn't Failing in Retail

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By Steve Heller, The Motley Fool

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Costco‘s unconventional business model remains highly successful despite living in the age of Internet retailers. Paid memberships remain central to Costco’s business model not only for profitability, but also for driving repeat visits. In this video, Motley Fool contributor Steve Heller goes through what makes Costco a great business, and whether the threat of Amazon Prime is more than just a threat to Costco’s business. 

Costco’s low prices haven’t just benefited customers — shareholders have walloped the market, returning 11,000% over the past two decades. However, with prices near all-time highs, is the ride over for Costco investors? To answer that and more, The Motley Fool‘s compiled a premium research report with in-depth analysis on Costco. Simply click here now to gain instant access to this valuable investor’s resource.

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Source: FULL ARTICLE at DailyFinance

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Is This Wholesale Clubber Safe From Amazon?

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By Steve Heller, The Motley Fool

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In a world where price has become an increasingly important factor for consumers, big-box retailers remain challenged to compete against that retailer in the sky named Amazon.com . Amazon lacks fancy retail locations and all the other added costs with running a retail store, which has largely contributed to success of its business model over the traditional retail model.

Although Amazon remains an ominous threat within the traditional big-box retail world, the one bright spot within retail continues to be wholesale clubs. Considering Costco‘s most recent earnings results, Amazon has yet to make significant inroads within the wholesale-club market. However, the rise of Amazon Prime members suggests that Amazon has begun taking a page out of Costco’s unconventionally successful playbook.

Breaking down the numbers
Last quarter, Costco’s net revenues increased 8% year over year to $24.3 billion, which brought home $547 million in net income, a 39% increase from the previous year. During the period, same-store sales increased by 5% year over year, and membership fees accounted for more than 71% of Costco’s $738 million operating income. Membership revenues remain critical to Costco’s overall profitability, because without them, Costco’s business would operate with about a 10% gross profit margin, which doesn’t leave much room for margin of error.

Like Costco, Amazon also operates with a similar gross profit margin, which could be a motivating force behind increasing its Amazon Prime membership base. Although Amazon itself doesn’t release exact numbers as to how many Prime members exist, Morningstar analyst R.J. Hottovy believes Amazon has lured in more than 10 million Prime members, which currently contributes to about one-third of Amazon’s operating income. Although this number is dwarfed by the 37 million households that have a Costco membership, Prime members are estimated to outspend non-Prime members by a factor of 2. In other words, when a consumer pays for a membership, it compels that person to use it more, and that’s a very powerful preposition for Amazon.

Price wars
In an all-out price war between Costco and Amazon, Costco comes out on top because the wholesaler leverages its economy of scale more effectively by selling fewer products. You aren’t going to find countless brands for sale at a Costco, but the ones you do will probably be offered for a better price than anywhere else.

In exchange for an added discount, Amazon offers “Subscribe & Save” to anyone who’s willing to receive automatic scheduled deliveries of consumer-staple products. To top it off, Subscribe & Save now offers an additional 15% off your total order when five or more Subscribe & Save items are delivered within the same month. Clearly, Amazon is appealing to consumers who value convenience more than getting the absolute best price. Since there are only 448 Costcos located in 42 states and Puerto Rico, chances are you’ll have to take an outing to receive the absolute best price, or you may simply live too far away from a …read more
Source: FULL ARTICLE at DailyFinance

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Redbox Instant Is No Match for Netflix

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By Demitrios Kalogeropoulos, The Motley Fool

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Redbox Instant hasn’t exactly lived up to its name so far. The combination DVD and streaming video service, jointly run by Coinstar and Verizon , took forever to get into customers’ hands. But after months of limited beta testing and a couple of launch delays, the wait for Instant is finally over.

And now that it’s taking on paying subscribers, the 30 million member question is: Just how well does the Redbox service stack up against Netflix‘s offering? The short answer is: not well.

The good
Cheaper price: On the plus side, Redbox Instant has Netflix beat on price. For $8 a month, users can stream to their hearts’ content while enjoying four nights of rentals from one of their local DVD kiosks. You only get unlimited streaming from Netflix at that monthly price, with DVDs costing extra.

Video games: Redbox users also get a gaming bonus. They can spend their free DVD rentals on any of a host of popular console games that can be checked out from the company’s thousands of kiosks. Netflix doesn’t play in the video game market at all.

But that’s about where the close comparisons stop. Beyond video games and price, the two offerings are actually worlds apart.

The bad
Limited content: Redbox Instant‘s selection just doesn’t compare. It has less than 5,000 titles available for streaming now. And those are mostly from the company’s content deal with Epix. Of course, Netflix and Amazon.com both have deals with Epix too, along with dozens of other content owners.

By Netflix’s count last quarter, Redbox Instant carried just 12 of Netflix’s top 200 streaming titles. And those 12 movies were all available on Amazon’s Prime service as well. So Redbox streamers are getting a small subset of what Netflix and Amazon already offer.

No TV shows: And Redbox Instant is a movies-only service. That’s fine for movie lovers, but it leaves a huge amount of viewing possibilities on the table. We know that TV shows account for the majority of Netflix’s usage. Television series were good for two-thirds of all of the company’s streaming in the third quarter of last year.

By focusing on movies, Redbox Instant gains some brand clarity. But it loses any realistic shot at becoming the daily entertainment destination that Netflix is for many of its subscribers. How many nights a week do you have time to watch an entire movie?

Limited devices: Redbox is also hampered by a small selection of devices that its customers can stream content from. It’s now available on Microsoft‘s Xbox console, iOS and Android devices, and a handful of Samsung TVs. But that’s a far cry from the thousands of Internet connected devices that Netflix boasts, including all major consoles and nearly every smart TV and DVD player that’s been sold over the past few years.

No original content: But probably the biggest difference going forward will be in the original content arena. Netflix and Amazon are both barreling down that …read more
Source: FULL ARTICLE at DailyFinance

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How Long Can Netflix Keep Rising?

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By Steve Symington, The Motley Fool

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Shares of Netflix sure look expensive nowadays, don’t they? I mean, seriously, who would want to buy a stock that trades at more than 650 times trailing earnings?

Apparently, plenty of people.

Netflix’s new deal
In fact, Netflix bulls were out in force Wednesday, as the stock traded up nearly 6% after the company announced deeper integration with social-networking giant Facebook . In the very near future, then, U.S.-based Netflix users will be able to automatically share what they’re viewing with their Facebook friends — a feature that, as fellow Fool Rick Munarriz pointed out, has already been incorporated in each of the other 44 countries in which Netflix operates.

So what’s the big deal? To be sure, the U.S. market represents nearly 82% of Netflix’s more than 33 million subscribers, so the added global visibility it can garner from allowing the bulk of its customers to automatically share their viewing habits among Facebook’s 1 billion-plus active users could be substantial.

For Facebook users’ sake, however, I should hope Netflix can find a way to at least give its users some semblance of control over exactly what’s posted to encourage the use of the new integration (short of allowing us to simply not use it, that is). For instance, some gentlemen might not be quite ready to admit they really enjoy their marathon viewing sessions of My Best Friend’s Wedding. Or, as is the case in my household, my Facebook friends probably might not appreciate that 99% of our Netflix viewing consists of LeapFrog, Dora, Curious George, and various Disney  movies.

Streaming heats up
That said, Wednesday’s Facebook news still doesn’t change the fact that Netflix’s well-funded competitors continue going to increasing lengths to bare their teeth.

Just last week, for example, Redbox parent Coinstar raised eyebrows by selling $350 million in bonds. Of course, the company was light on details, saying only that it intends to use the money for “general corporate purposes, which may include but is not limited to maintenance or repayment of outstanding debt, acquisitions or other investments, and payment of other corporate expenses.” That still didn’t stop many investors from at least hoping some of that cash will be allocated to content purchases for its new Redbox Instant streaming service — the beta version of which, incidentally, launched on Thursday by offering one month free trials to new members.

Even more worrisome for Netflix, Amazon.com CEO Jeff Bezos has said that his company is currently spending more than $1 billion per year on content for its Prime streaming service. Of course, Bezos has had no qualms making his long-term plans of broader Web domination crystal clear from the very beginning, so patient Amazon shareholders have been more than willing to put up with temporary losses and sky-high valuations as they wait for the real payoff down the road. What’s more, Amazon Prime not only undercut’s Netflix’s prices at less than $7 per month, but it also provides free two-day shipping on millions of items …read more
Source: FULL ARTICLE at DailyFinance

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Redbox Instant Is Netflix, With a Twist

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By Tim Brugger, The Motley Fool

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It’s been over a year since Coinstar and Verizon first announced plans to join forces to take on industry-leading Netflix . At least, that’s what most industry insiders seemed to think, and why not? Coinstar, owner and operator of all the Redbox kiosks, and $138 billion telecom giant Verizon make a formidable team. In typical fashion, Netflix CEO Reed Hastings pooh-poohed the notion that this dynamic duo would pose a threat. Well, we’re about to find out.

Redbox Instant is up and running
Redbox has officially launched its new video streaming and DVD rental service in the U.S., after completing a successful beta testing phase that began in December. For $8 a month, users can stream movies using their Android or iOS mobile devices, an Xbox or Blu-ray player, and some Samsung TVs. Redbox Instant customers will also receive “4 fabulous DVD credits at the kiosk” as part of their $8 monthly fee.

Customers of Redbox Instant also have the option to forgo the DVDs and stream an unlimited number of movie titles for $6 a month, $2 less than a similar Netflix subscription. That would appear to directly compete with Netflix, so why did Strickland go out of his way to emphasize that Redbox Instant isn’t playing in Netflix’s field?

At least for now, the differences between the two services somewhat support Strickland’s assertion that Redbox Instant doesn’t want to be Netflix. Unlike Netflix and direct competitor Amazon Prime, Redbox Instant is all about movies. There’s no original content with the new Redbox service, something both Netflix and Amazon are diving headlong into.

In addition, the number of streaming titles is limited to about 4,600, or 10% of the entire Redbox library. Current rules surrounding which movies can be streamed and when will put a crimp in the Redbox Instant content library for the foreseeable future. The movies offered for streaming come from an agreement Redbox has with Epix, similar to the arrangement Amazon recently signed to supplement its Prime service content.

So it’s not another Netflix, right?
As former Verizon executive and current Redbox Instant CEO Shawn Strickland tells it, the new service was never supposed to compete directly with Netflix. But there are similarities between the two services that Netflix investors shouldn’t discount.

For one thing, the new Redbox Instant service is targeting high-margin DVD rentals. Unlike Netflix and its negative outlook toward the DVD market, which Hastings has overtly stated he wants little or nothing to do with, sending electronic DVD credits to customers for use with existing Redbox kiosks does away with the time and expense of mailing selections.

When Hastings was quoted last year saying, “We expect DVD subscribers to decline every quarter, forever,” he left little doubt what side of the fence he fell on. But why? Here we are a year later, and the number of Netflix DVD customers has dwindled to 8 million in its most recent quarter, compared to about 30 million paid, …read more
Source: FULL ARTICLE at DailyFinance

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2 Retailers' Winning Formula

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By Chris Hill, The Motley Fool

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The following video is from Tuesday’s Investor Beat, in which host Chris Hill and analysts Jason Moser and Andy Cross dissect the hardest-hitting investing stories of the day.

Costco   reported a 39% increase in second-quarter earnings. In this installment of Investor Beat, our analysts talk about Costco’s loyal membership and the future of the stock. The guys also weigh in on an eye-opening Morningstar report on the success of Amazon Prime.

Costco’s low prices haven’t just benefited customers — shareholders have walloped the market, returning 11,000% over the past two decades. However, with prices near all-time highs, is the ride over for Costco investors? To answer that and more, we’ve compiled a premium research report with in-depth analysis on Costco. Simply click here now to gain instant access to this valuable investor’s resource.

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Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Google Readies Its Amazon Prime Killer

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By Steve Heller, The Motley Fool

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In an all-out effort to keep shoppers dialed into the Google ecosystem, the company has reportedly been readying a same-day shipping service aimed at directly competing against Amazon‘s Prime shipping service. Dubbed “Google Express Checkout,” the service is expected to cost $10 to $15 less than the $79 annual fee Amazon charges for its Prime service, but will offer same-day deliveries from the likes of Target, Wal-Mart, Walgreens, and even Safeway. On the surface, the motivation appears that Google wants a bigger piece of the e-commerce pie, but deeper down this is likely part of a larger effort to collect more data about its users.

Unlocking Android
Although Android enjoys a 70.1% worldwide market share, it controls the minority of the industry’s profits. The abundance of sub-$250 Android-powered smartphones has attracted a more frugal class of smartphone users compared to Apple iEnthusiasts. As a result, Google has been working on ways to extract more value out of its Android user base, which naturally means improving the effectiveness of its mobile advertising platform. A same-day delivery service would allow Google to collect a combination of online and offline data about user shopping behavior. Over time, this valuable data should allow Google to increase the relevancy of its mobile ads, which ultimately should translate into increased mobile ad spending.

From search giant to e-commerce king?
Google is in a potentially unique position to capitalize on e-commerce growth, since shopping-related searches often start on a search engine. However, Google has to deal the challenge of breaking the association among users that online shopping typically ends away from Google’s domain. If successful, Google has a seemingly large pool of users that it can prospect for new data.

At this time, it isn’t known if this same-day delivery service will be the first nationwide rollout among major competitors. eBay has been trialing a same-day delivery network in New York and San Francisco, which relies on excess delivery capacity within those cities. eBay CEO John Donahoe has coined it “the Uber of deliver networks,” which presents eBay with a massive retail opportunity.

What will Amazon do?
To combat the same-day delivery threat, Amazon plans on growing its warehouse network to reduce its two-day shipping time down to one day for most areas. In larger urban areas, the company believes it will be possible to offer same-day delivery. However, CEO Jeff Bezos has gone on record saying he doesn’t see how a nationwide same-day delivery service would be economical. Should Google or eBay show success with their same-day delivery platforms, you better believe Amazon will find a way to make it happen.

As one of the most dominant Internet companies ever, Google has made a habit of driving strong returns for its shareholders. However, like many other web companies, it’s also struggling to adapt to an increasingly mobile world. Despite gaining an enviable lead with its Android operating system, the market isn’t …read more
Source: FULL ARTICLE at DailyFinance

Computers

Google same-day shipping service may be difficult for search giant to pull off

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When rumors of “Google Shopping Express,” a same-day shipping service allegedly already being tested by Google employees, first hit the Web earlier Tuesday, most people missed the most glaring element of whole plan: Endeavors like this are insidiously difficult to pull off.

Indeed, several companies—mostly online retailers—have dabbled in same-day delivery service, but no one’s really figured out how to do it effectively at a large scale.

First, some background. An unnamed source told TechCrunch that Google Shopping Express will be a subscription-based service like Amazon Prime, but will be $10 to $15 cheaper per year. It will allegedly offer same-day delivery from brick-and-mortar retail stores such as Target, Walmart, Walgreens, and Safeway, but TechCrunch didn’t say how much extra each delivery would cost, if anything.

From TechCrunch’s description, Google’s service sounds similar to eBay Now, which uses couriers to buy items from retail stores and deliver them to customers. But eBay Now is only available in three cities (San Francisco, New York, and San Jose), and is not profitable despite the $5 delivery cost. As the Wall Street Journal reported, eBay pays couriers $12.50 per hour, plus 55 cents per mile driven, so there’s a high up-front cost just to offer this kind of service.

To read this article in full or to leave a comment, please click here

…read more
Source: FULL ARTICLE at PCWorld

Computers

How to browse the Kindle Lending Library on your PC

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Finally, a way to browse the Kindle Lending Library in your browser.

As an avid reader, and an especially big fan of ebooks, I thought subscribing to Amazon Prime seemed like a good idea.

After all, the $79/year membership lets you check out one ebook per month from the Kindle Lending Library, which is rapidly approaching 300,000 titles.

Just one problem: How in the heck do you find those titles? If you’ve ever gone searching for “Kindle Lending Library,” you know that there’s no such thing—not in your Web browser, anyway. Although Amazon lets you browse the collection on an actual Kindle, but there’s no direct link to it anywhere on Amazon’s site. Hassle!

Fortunately, reader Danner discovered that you can indeed browse the Lending Library in your browser; it just takes a little doing. Here’s the process:

To read this article in full or to leave a comment, please click here

…read more
Source: FULL ARTICLE at PCWorld

Business, Finance, Occupation & Industry

Can Streaming Save the Video Kiosk?

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By 24/7 Wall St.

Redbox Coinstar machine

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When Coinstar Inc. (NASDAQ: CSTR) reported earnings last night, the owner of the Redbox DVD-rental machines beat earnings estimates by 27%, but net income was down by the same amount for the quarter. Sales were up, but well below estimates. And then things got worse.

The company said that it expects fewer new videos this quarter, and that will have an impact on revenues and profits. First-quarter guidance for revenues of $568 million to $593 million is well short of the consensus estimate of $624.18 million. EPS guidance of $0.77 to $0.93 is even further short of a consensus estimate of $1.21.

Fewer new DVDs and the lack of top-quality videos and movies is not going to help Coinstar’s streaming video joint venture with Verizon Communications Inc. (NYSE: VZ) because content producers like movie studios and cable channels have dragged their feet on releasing programming for streaming. Netflix Inc. (NASDAQ: NFLX), once the favorite of content producers, also has become a red-headed stepchild as the producers launch their own streaming channels in an effort to capture more revenue. Either that, or raise their demands so much that content costs batter profits.

The basic way for Netflix and Redbox Instant to fight this is to add subscribers, something that Netflix did quite well in the fourth quarter, with nearly 5.5 million new subscribers. Redbox Instant has rolled out on the Xbox 360 from Microsoft Corp. (NASDAQ: MSFT), and is scheduled to roll out widely by the end of the current quarter. To compete with Netflix or Amazon.com Inc. (NASDAQ: AMZN), Redbox Instant will need to spend big money, which is presumably the reason for Verizon’s inclusion in the streaming joint venture.

But it will be an uphill struggle. Here is a snippet from Netflix’s recent quarterly report:

[W]e looked at the top 200 titles on Netflix: our 100 most popular movies and our 100 most popular TV shows in Q4. Of these 200, 113 are not on Amazon Prime, Hulu Plus or Redbox Instant. Of the 87 that are available on at least one of these services, Hulu Plus offers 27 of the 200; Amazon Prime 73 of the 200; and Redbox Instant 12 of the 200, with significant overlap in TV between Hulu Plus and Amazon Prime, and in movies between Amazon Prime and Redbox Instant. In other words, when it comes to the most popular content with members on Netflix, none of these services are good substitutes to Netflix.

Redbox Instant has yet to launch officially, but Coinstar’s complaints about content are not going to fix this problem. In Coinstar’s favor is that Netflix and Amazon have the same problem, although Netflix’s foray into original programming could help it offset the lack of cooperation from the studios and cable channels. But producing content is expensive too.

The other heavyweight competition will come from Google Inc. (NASDAQ: GOOG) and its 600-pound video gorilla, YouTube, and its sponsored channels that YouTube is expected to test as paid subscriptions.

Coinstar’s shares are down …read more
Source: FULL ARTICLE at DailyFinance

News, Politics, Government

Dijit Buys Miso: Acquisition News, Told in Story Form, 50 Years From the Future

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By Michael Wolf, Contributor Fifty years from now, when those of us who have followed the social TV market are old and grizzled, we’ll sit around in that old  folks home in the sky (and by sky, I mean aboard the floating, Jeff Bezos-owned space retirement complex that comes free with an Amazon Prime membership), and tell our great grandchildren stories of days gone by.
Source: FULL ARTICLE at Forbes Latest

News, Politics, Government

Netflix Earnings Preview: High Content Costs Moderate Subscriber Gains Expected

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By Trefis Team, Contributor   Netflix reports its Q4 2012 and full year results on January 23, 2013, and we do not expect a lot to change. While we expect losses to continue due to high content costs incurred as a result of international expansion, we anticipate overall subscriber gains to be moderate. The U.S. subscriber growth will be impacted by a seasonally strong quarter as will as increased competition from streaming services such as Amazon Prime and Comcast’s Xfinity Streampix. Netflix should see strong subscriber gains internationally due to its launch in Nordic countries. DVD subscriber losses will continue and we look forward to the company’s guidance for the next quarter or year.
Source: FULL ARTICLE at Forbes Latest

Science & Technology

Amazon Instant Video Comes to Wii

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Nintendo has announced that Amazon Instant Video is now available for Wii. The app allows users to stream videos from Amazon, or allows Amazon Prime subscribers to watch more than 30,000 videos for free.

A full rundown of everything Amazon Instant Video offers on Wii is available on Amazon, including steps to sync your account or register a new one. Users will be able to start a video on the Wii and then finish it on another device, and videos can be purchased or rented from within the app itself.

Continue reading…

Source: FULL ARTICLE at IGN Tech