Netflix Stock Rises On Rumors Of Amazon Acquisition

July 18, 2009 by tcgames

Stock in Netflix Inc. surged earlier this week on rumors that the online movie rental firm would be acquired by a tech giant like Amazon.com.

So far, the rumors have remained just that. But the speculation highlights how the Los Gatos firm that revolutionized the way people rent DVDs has emerged as a big player in an evolving world of Internet video.

Netflix’s strong suit is that it already has the technology, experience and distribution deals in place to stream movies and TV episodes, said analyst Tim Bajarin.

“One of the things (Hollywood) studios are coming to grips with is that DVD sales, especially through retail, are declining,” said Bajarin, principal analyst with Creative Strategies Inc. of Campbell. “The distribution of movies over the Internet is going to increase.”

Amazon and Netflix officials declined to comment on the rumors.

Bajarin also noted there was speculation that Microsoft or Google might make a better partner for Netflix, which has more than 10.3 million subscribers. They rent about 2.2 million DVDs each day online and receive them in the mail, bypassing retail outlets like the once-mighty Blockbuster.

Netflix offers more than 100,000 movies and TV episodes in standard or Blu-ray discs. But since 2007, it has also been expanding its catalog of 12,000 titles available for instant online viewing.

It has secured deals to stream content to a TV monitor hooked to a variety of Internet-connected devices, including Microsoft’s Xbox 360 game console, TiVo, a Roku video player and new Blu-ray players from Samsung and LG.

Netflix hasn’t announced how much streaming video it serves up.

However, Microsoft said in February that Netflix members streamed 1.5 billion minutes of content on the Xbox 360 in the first three months the service was available.

Last week, Netflix said Sony will make streaming available on Internet-ready Bravia TVs. Vizio will have similar models for…

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