By David B. Wilkerson
CHICAGO (MarketWatch) -- CHICAGO (MarketWatch) -- Netflix Inc. NFLX +4.86% was up 6% Wednesday on news that a Congressional bill allowing the video rental company to reach its customers via such social networks as Facebook and Twitter, has been passed by the House of Representatives. The House bill, H.R. 2471, passed on Tuesday by a vote of 303-116. It relaxes a law enacted in 1988, during the VHS rental era, that prohibited video rental firms from disclosing a customer's rental history without that person's permission.
"I think that's a positive for Netflix," said Eric Wold, a senior analyst at B. Riley & Co., in an interview with MarketWatch. "Up to now, they haven't been able to connect to Facebook and Twitter. This can create a lot of marketing possibilities, as their customers can share what movies and TV shows they've been watching on Netflix."
The Senate will introduce its own version of the bill. Also Wednesday, Netflix said it would update its offering for Microsoft's MSFT -0.43% Xbox 360, including support for 720p high-definition streaming and other new features. Xbox support will also now be offered in Brazil, Chile, Colombia and Mexico for the first time. The Xbox has been one of the post popular ways for new customers to access Netflix, along with the Apple Inc. APPL +19.38% iPad.
Article Link: http://www.marketwatch.com/story/netflix-higher-on-bill-xbox-announcement-2011-12-07
Eric Wold, analyst with B. Riley & Co. in Santa Monica, Calif., believes Netflix’s defections could reach 4.7 million, which he said represent upwards of $445 million in disc rental revenue up for grabs. In a Nov. 16 note, Wold surmised that the majority of the aforementioned defectors would downsize their monthly rental activity since a-la-carte rentals carry a higher perceived cost than a monthly subscription.
Continue Reading >With the rental agreement between Warner and Redbox set to expire Jan. 31, 2012, B. Riley & Co. analyst Eric Wold doubts Redbox management would agree to a 56-day or longer embargo on new-release Warner titles — even with built-in per-unit discounts.
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