Netflix Set to Benefit From DVD Retail Restrictions
Trefis submits:
Netflix (NFLX) may benefit from new restrictions placed by retailers, like Walmart (WMT) and Target (TGT), on the number of new release DVDs that can be purchased at a time. Such restrictions are designed to impact rental kiosks, like RedBox (a subsidiary of Coinstar (CSTR)), that purchase their DVD rental inventory from the retailers and compete with new DVD sales at those retailers as well other film rental services like Netflix. Below we highlight why retailers are restricting new release DVD sales and why we think DVD rental kiosks like RedBox do not pose a significant threat to Netflix. We also show how there could be a 10% upside to our $57 Trefis price estimate for Netflix’s stock if the company’s subscriber growth were higher than we forecast.Complete Story »
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