Friday, May 31, 2013

Jeff Macke and Dr. Jon Najarian Discuss Amazon and Netflix Stock Prices Affected by Original Content

Jeff and John
Jeff Macke and Dr. Jon Najarian on Breakout

Jeff Macke Has Dr. Jon Najarian on Breakout

Jeff Macke of Breakout (Yahoo! Finance) says: “It’s very hard to make original programming.”
He’s speaking in particular about the upcoming challenge that Netflix is facing. They have some success with the Kevin Spacey original series House of Cards. Macke points out that HBO is a subsidiary of Time Warner for that very reason.

Jeff Macke makes the point that Netflix is trying to make it on their own without a deal with Viacom to stream their content. Guest analyst Jon Najarian on Breakout thinks that it is tougher on Netflix to produce original programming than it would be on Amazon, because Amazon is more diversified.

Dr. Jon Najarian says that it is harder on Netflix stock prices because they deal exclusively in content, but Amazon is more diversified, and gets paid up-front with Amazon Prime. Netflix does not get paid up front for their content. Netflix stock prices have gone above $200 at the end of May 2013, while Amazon’s stock prices are above $260 per share.

Dr. Jon Najarian thinks that Reed Hastings did very well with the Kevin Spacey original series House of Cards. However the jury is still out on Arrested Development.

Dr. Jon Najarian thinks that since the Netflix stock price is above $200, there may be a stock split coming in the near future.

Amazon has Announced to launch 5 New Original Shows

Is Amazon making a smart move by producing 5 original series?

Good question.

Dr. Jon Najarian thinks they are trying to “confuse the investor,” but thinks that because Amazon is so diversified, it is less volatile (than Netflix) in the event that the new original programming is a flop. 

Essentially, the stock price of Netflix is more likely to be directly affected, than it is for Amazon.

He thinks that the original content plan for Amazon “may or may not work.”
Dr. Jon Najarian points out that Amazon doesn’t want to be compared to Disney and Time Warner, because it affects the stock prices.

Amazon plans to release a full season of the comedy shows Betas and Alpha House, along with kids shows Annebots, Creative Galaxy, and Tumbleleaf, exclusively on Amazon Prime.

Amazon is confident in launching these shows because the success of their pilots looked promising.

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