Replies to post #61511 on Mike Lindell Media Corp (MLMC)

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asleep at the wheel? Netflix Unflustered by VOD Threat
Maya Roney, 12.15.05, 11:55 AM ET

NEW YORK - Piper Jaffray research analyst Safa Rashtchy maintained an "outperform" rating and $34 price target on Netflix in anticipation of a strong fiscal fourth quarter.

Netflix (nasdaq: NFLX - news - people ) shares have eroded over the last several days on concerns of competition from Video-on-Demand, but Rashtchy believes these suspicions are unwarranted, noting the sell-off represents a buying opportunity.

"The arguments about movie downloads are similarly overly optimistic and ignore the reality of consumer behavior," said the analyst. "We believe Netflix remains the most viable and attractive value proposition for renting movies."

While Video-on-Demand has been technically possible and available for several years, it has not garnered substantial usage because it is not cost effective for the content producers, Rashtchy explained.

Netflix saw unique visitors to its website increase 8% and 23% sequentially in October and November, respectively. Rashtchy called the uptick "very encouraging" and expects upside to his estimate for a 12% sequential increase in fiscal fourth-quarter traffic.

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jrod, yep, even Netflix knows whats coming and they left the door open. eom

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Risks for Netflix include a new entrant to the U.S. rental market for DVDs, competitive pressure from Blockbuster Inc.'s online service and shifts by media companies toward other content distribution channels, the firm said. Walt Disney Co.'s ABC, for instance struck a deal with Apple Computer Inc. this year to make some TV programs downloadable onto iPods, while CBS is teaming with Comcast Corp. and NBC with satellite operator DirecTV Group Inc. to offer on-demand programs.