Amazon, Verizon throw wrench into Netflix's plans
New movie-streaming ventures could mean serious trouble.
Verizon (VZ) recently announced a joint venture with Redbox to launch a streaming service, and now Amazon (AMZN) seems to be planning a stand-alone video-streaming service.
So far Amazon's video-streaming service has been a free add-on for customers who subscribe to Amazon Prime service, which makes them eligible for free shipping in exchange for an annual subscription fee. If the service becomes stand-alone, it would imply more money will be pumped into content. This could pose some serious trouble for Netflix and slow future subscriber growth.
On the other hand, international prospects look good. The U.K.'s major pay-TV service provider Virgin Media has stated that the company is talking to several video-streaming service providers to add TV shows and movies to its TiVo recording service. This includes Netflix, and it could help the company expand more smoothly in this new geography.
Moreover, Netflix seems to be exploring entry into the Russian market, according to a report. The international opportunity is huge and Netflix could begin expanding to other international markets in the second half of 2013.
Overall, the era of self-made troubles is over and the company will now need to demonstrate good business acumen to beat competitors. We think that the stock is more or less near it fair value, and high stock growth from this point is unlikely given the increasing content costs and growing competition.
MORE ON MSN MONEY
Copyright © 2013 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
The photo-sharing site only has 10 employees, and it may be up for grabs.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.