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Netflix Shares Tumble 10% On News Of Amazon Deal
Reed Hastings and the guys over at Netflix must feel like 2012 is definitely not the company’s year. Just a few stories ago we covered a bit of news relating to Netflix having poor quarterly results and the subsequent drop in the company’s share price. Yet again, there’s more bad news for Netflix.
The company’s share price tumbled 10% this week shortly after Amazon announced a deal with EPIX, the entertainment joint venture between Viacom, MGM and Lionsgate. The deal which will see Amazon beefing up its streaming content offerings with the latest movies, comedy and sports was not taken as good news by Netflix investors. A few scrambled to the gate, selling off shares in what many believe is the start of a greater slide to come.
Amazon’s ambitions seem destined to create future troubles for the sustainability of Netflix. According to Bill Carr, Vice President of Video and Music at Amazon, “We are investing hundreds of millions of dollars to expand the Prime Instant Video library for our customers. “We have now more than doubled this selection of movies and TV episodes to over 25,000 titles in just under a year. We are thrilled to be able to offer our customers such popular EPIX titles, many of which were just recently in theaters. We can tell from the data that our customers love watching movies on Prime Instant Video.” In order to watch free movies online, users can also visit the SiteTrail portal. It has several listings which can be accessed at no charge. Netflix is certainly seen as a useful alternative for films and movies.
Netflix will have to do some soul searching and work a way to compete. Its first-movers advantage has all but disappeared and the share price tumble recently wiped $300 million off the company’s value. If this isn’t a time for summoning all the generals, I don’t know what is.