Netflix Stock Rises On Rumors Of Amazon Acquisition

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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Is Amazon Looking To Acquire Netflix?

Shares of Netflix stock rose five percent yesterday on indications that Amazon may be looking to acquire the popular movie rental service, according to the Memphis Business Journal.

The paper reported Netflix shares (NASDAQ: NFLX) closed at $42.19 on Monday, up 5.29 percent after trading as high as $42.40 earlier in the day.

Netflix stock has more than doubled since hitting a 52-week low of $17.90 on Oct. 27.

Seattle-based Amazon (NASDAQ: AMZN) offers its own video-on-demand service, which competes directly with Netflix’s online video streaming service.

Neither company would comment on the rumor.

On Slice of SciFi #219 we reported on how Netflix was looking to address the future of the video rental industry when their core business model of delivering DVDs through the mail begins to wane. Netflix was exploring ways to deliver more on-line content but one thing holding them back was licensing agreements with Hollywood studios. If this merger goes through, consumers could benefit from a greater selection of movies offered between Netflix and the Amazon Unbox service.

Kindle DRM Is Getting Even More Frustrating

Amazon needs to work on its Kindle DRM policy, because the following story is ridiculous.

Basically, the way Kindle and the Kindle iPhone app are set up today, users have no idea how many times they can download a book, nor can they easily know how many devices can be used to read said book.

Making the situation even more confusing is the fact that the DRM information actually varies by publisher, and to find out how many times they will allow you to download a book you have to visit the legalese. Sometimes the info isn’t there, either. The worst part is this was all confirmed by an Amazon tech support person:

“How I find out (sic) how many times I can download any given book?” I asked. He replied, “I don’t think you can. That’s entirely up to the publisher and I don’t think we always know.”

I pressed - “You mean when you go to buy the book it doesn’t say ‘this book can be downloaded this number of times’ even though that limitation is there?” To which he replied, “No, I’m very sorry it doesn’t.”

As the author notes, this isn’t so bad if you’re buying a beach book or something you’ll read once and be done with it. Where it does get shitty is with reference books, which the author would like to read today, on his iPhone 3GS, and perhaps in a year, on the theoretical iPhone 4G, powered by unicorn tears. With certain books, you could be limited in such a way that your reading material does not follow your gadget’s natural upgrade cycle.

At the very least Amazon should update its policy so this info is out in the open and easily accessible. The best case scenario would be to allow consumers to actually, you know, literally own the books they’ve just bought. [Gear Diary]

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E-Book Sales Continue To Climb

Anime Network Taken Off Comcast, Put on DirecTV

A.D. Vision’s Anime Network television service has announced on its web forum on Friday that it will no longer be available on the Comcast cable service provider in the United States. At the same time, The Anime Network announced it is available on the VOD service from the DirecTV satellite television provider. The network is also offering the first five episodes of the Kiba, Mezzo, and Azumanga Daioh anime series on the Ovi Phone Service for select Nokia phones.

Thank you to Prede for the news tip.

Update: The American anime distributor Funimation put its Funimation Anime video-on-demand content on Comcast earlier this month. This move coincided with the removal of Comcast’s own Anime Selects package from the same cable provider.

The Anime Network was available as one of DirecTV’s Pay per View Channels in 2006. It later became part of DirecTV’s Video On Demand offerings.

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Xbox 360 Reaches 30 Million Console Sales

Microsoft today dropped an Xbox 360 statbomb, showering figures on a range of metrics including the fact that the Xbox 360 has now sold over 30 million units worldwide.

After combing through financial reports and rooting around in bins, Shacknews offers the following list of worldwide lifetime console sales:

1. Nintendo DS - 101.78 million units (as of March 31 2009)
2. Nintendo Wii - 50.39 million units (as of March 31 2009)
3. PSP - 50 million units (as of February 13 2009)
4. Xbox 360 - 30 million units (as of May 28 2009)
5. PlayStation 3 - 22.91 million units (as of March 31 2009)

Microsoft also boasts it leads current-generation consoles in attach rate, with 8.3 titles being bought per console, as well as sales for third-party developers–$5.9 billion.

On the community front, Xbox Live’s 20 million active accounts have downloaded nearly 1 billion pieces of Marketplace content. Sony announced in February that the PlayStation Network had 20 million registered users, though this includes forum and PSP accounts.

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AT&T May Reduce Price for iPhone Data Plan by $10

Expectations that AT&T will lower the cost of wireless service for Apple’s iPhone are growing. A $20-a-month data plan with limited access is a possibility for the exclusive U.S. iPhone service provider.

AT&T’s monthly plan for the iPhone is currently $69 plus taxes and fees and includes a $30 unlimited data plan. A comScore study found that 43 percent of current iPhone users have incomes above $100,000, so AT&T needs a lower price for it and Apple to grab a larger share of the smartphone market.

As we reported earlier this month, Cote Collaborative analyst Michael Cote expects AT&T to cut the monthly iPhone plan by $10, to $59 a month, a savings of $240 off the $1,656 cost of a two-year plan. Other reports have speculated that Apple may offer a lower-priced version of the iPhone, particularly since the cost for the touchscreen component has dropped.

Competition Rising

As the three-year anniversary for the iPhone nears, competition is rising, with the BlackBerry Curve and the Palm Pre getting good notices. In addition, more devices powered by the Google-backed Android mobile operating system are coming, and the platform is expected to grow fast.

Apple has an advantage over other smartphone makers in its App Store, which has started carrying more business-oriented apps for the iPhone, including a USAA Mobile App that arrived last week and lets customers handle banking, insurance and investment accounts securely on the iPhone. As we have reported, the App Store may not make much money for Apple, but it helps drive sales of the iPhone and iPod touch.

While its competitors are copying Apple’s App Store model with their own online stores, including App World for the BlackBerry and the Android Market, more than one billion apps have already been downloaded from the App Store.

Apple has offered iPhone deals through…

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AT&T Considering Price Cut For iPhone Plan

Over the last two years, Apple and AT&T have collaborated on one of the most successful product launches in recent history, using a wave of positive press to help sell more than 17 million iPhones.

But the three-year anniversary of the iPhone is fast approaching, and as phone manufacturer Motorola can attest, few high-tech devices remain shiny and compelling forever. The seemingly endless number of apps available for the iPhone may help delay consumer ennui, but Apple — and particularly AT&T — are clearly worried about the rising buzz for new entrants in the smartphone category.

The Blackberry Curve, for instance, has earned some rave reviews, as has the Palm Pre. Android-driven phones are slowly gaining market share, aided by a surprisingly quick upgrade of Android to version 1.5. And Nokia, which has long been absent from the high end of the smartphone market, is reportedly set to introduce three different touchscreen models this summer.

Same Data for Fewer Bucks?

Given the rising competition among smartphones, it’s not surprising that analysts are speculating about an AT&T price cut. Cote Collaborative analyst and pricing strategist Michael Cote told TheStreet.com Thursday that he thinks AT&T will cut the cost of the iPhone’s monthly service plan by $10, from its current $69 per month to $59.

If AT&T does so, it will cut $240 off the $1,656 cost for a two-year service plan for the iPhone. Cote argues that the cut is necessary for AT&T to extend the reach of the iPhone beyond early adopters and Apple fans to more price-conscious mainstream consumers. Cote, who wasn’t available for comment, told TheStreet.com that the high cost of the service plan "does not address the whole market."

Cote’s reasoning is based in part on Apple’s experience with offering its iPhone at Wal-Mart, where sales haven’t met expectations, and the reaction of…

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Richard Garriott Sues NCsoft Over Stock Options

Claiming breach of contract, Tabula Rasa and Ultima Online creator Richard Garriott is suing MMO publisher NCsoft for “more than $27,000,000 in actual damages,” GamePolitics reports.

The official complaint crafted by Garriot’s legal team (.pdf) alleges that NCsoft fired him during the “quarantine from his space flight” and then publicly characterized his departure as voluntary. Aside from being rude, this act proved financially detrimental. Per court documents:

As Mr. Garriott prepared to leave NCSoft, however, Mr. Garriott learned that NCsoft had internally re-characterized his termination by Mr. Chung as a “voluntary” resignation… This mischaracterization had profound and detrimental effects on Mr. Garriott’s stock options: if NCsoft terminated Mr. Garriott’s employment (which it did) then the options - worth tens of millions of dollars - would remain in effect until 2011; but if Mr. Garriott resigned voluntarily (which he did not), then NCsoft might have terminated those options… within ninety days of his departure…

NCsoft forced Mr. Garriott into a Hobson’s choice of exercising his options… and forced him to sell into one of the worst equity markets in modern history…

Since we first reported on Garriott’s departure from NCsoft, I’ve spoken to friends at the company who all seem to genuinely believe he left amiably and of his own free will. Garriott however, alleges that he repeatedly asked the firm to “retract its misstatements … and the cancellation of his stock options,” all to no avail.

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Federal Trade Commission Investigating the Apple-Google Relationship

The FTC has begun an investigation into possible antitrust violations caused by the often close relationship between two of our favorite companies, Apple and Google. But they look so nice together!

The biggest issue here seems to be that Apple and Google share two directors, in this case Eric E. Schmidt and Arthur Levinson. Both Schmidt and Levinson sit on the boards of the two companies, and a 1941 law prohibits such a relationship when it could reduce natural inter-company competition. The proper term for this is "interlocking directorates."

Google and Apple, of course, compete in several categories: Google’s Chrome and Apple’s Safari web browsers, Android and Mac OS, YouTube and iTunes, Picasa and iPhoto, and many, many more. Yet the companies’ fates are intertwined, and our faithful government watchdogs want to make sure nothing untoward is happening in the union. We’ll keep you updated if anything interesting develops out of the investigation. [New York Times]

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