Netflix shares get a big boost
Apple's new Apple TV announcement drives enthusiasm among Netflix investors.
That's because Netflix came out looking like a major winner with a prominent spot in the new Apple TV device coming out this month. Netflix customers can use Apple TV to access Netflix's growing library of on-demand movies and shows.
"Depending on the fate of Apple's device, the relationship could further establish Netflix as a mainstay in electronics devices that deliver Web content to the living room," writes Nick Wingfield in The Wall Street Journal.
It gets increasingly difficult to pick a winner in the crowded race for the TV-watching audience. Apple is a strong contender now, Google (GOOG) is gearing up for an ambitious effort, and Amazon (AMZN) is moving in as well.
Consider all the relationships Netflix already has. You can view Netflix's content on:
- The new Apple TV
- The Xbox 360
- The PlayStation 3
- The Nintendo Wii
- Televisions that connect to the Internet
- Blu-ray players
- Roku players
- The iPhone and other mobile devices
Netflix has a huge head start, with 15 million subscribers in the second quarter (up 42% from the year before). Most of those subscribers have watched the company's streaming video service.
Netflix decided a long time ago that the DVD-by-mail model was a short-term path to a hugely ambitious goal: Becoming the top online video rental service. It has spent tens of millions of dollars (at least) building out the platform for this service, and it has paid hundreds of millions to license the videos that run on it.
And, as it turns out, all the hardware makers now want a partnership with Netflix. That fits nicely into Netflix's business model.
He who makes the most deals wins? In this business, and for Netflix, that might be the case.
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