Netflix (NFLX) Ticks Lower as Amazon (AMZN), NBCUniversal (CMCSA) Expand Agreement

August 24, 2012 9:06 AM EDT
Netflix, Inc. (Nasdaq: NFLX) shares are ticking lower following an announcement from peer (Nasdaq: AMZN) that it entered into an expanded licensing agreement with Comcast's (Nasdaq: CMCSA) NBCUniversal Cable & New Media Distribution.

The expanded agreement, which Amazon said will add "hundreds of popular and award-winning TV episodes to Prime Instant Video," is going to make it a little tougher for Netflix to retain customers without adding more content of its own.

Shares are down about 1 percent in early trading.

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DLAL on 2012-08-24 09:30:38
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This article implies that NFLX current drop has something to do with AMZN gaining rights to content to create competition and do not believe this is a significant direct cause/effect. Streaming companies are not like cable companies where customers have one service or the other. With streaming, many customers have multiple accounts with several content providers such as Netflix, Hulu, Amazon, iTunes, Roku/Boxee services, etc. and may also rent from a Redbox. This is particularly true with cable cutters as the combined relative cost having all these services is still much lower than cable. So this does not typically cause them to cancel or neglect their Netflix account.

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