From Seeking Alpha
The rise of Netflix (NFLX), or other companies offering video streaming services such as Amazon (AMZN), is the biggest threat to the status quo of American
cable. In its last quarter, Netflix was able to add 630,000 domestic streaming
subscribers, which was in line with its guidance of 230,000 to 835,000
additions and an improvement from 530,000 additions reported in the same
quarter last year. The company's total domestic streaming base has now reached
29.8 million. Netflix is eyeing 700,000 to 1.2 million net additions in the
current quarter. Therefore, we can safely assume that Netflix's domestic subscriber
base will easily cross the 30 million mark when it reports its next quarterly
results.
Traditional Cable Television On
The Back Foot
Essentially,
every additional streaming subscriber of Netflix, Hulu or Amazon is a loss to
traditional cable television companies such as Cablevision Systems (CVC). I have been a believer
in the idea that the future of television lies on the broadband, but to my
surprise, the head of Cablevision has also said something to this effect. In a
recent interview to Wall
Street Journal, James Dolan, the CEO of Cablevision said that "there could
come a day" when broadband would dominate the industry. While analysts
have been pointing out the changing landscape for a long time, but a head of a
cable company has never made such comments. I believe this implies that
Cablevision's current business model is approaching obsolescence ….. Read More
