Amazon Deal ‘Final Straw’ for Netflix: Analyst
A deal between Amazon and Epix to provide streaming movies could be the death knell for Netflix, Ironfire Capital analyst Eric Jackson told CNBC on Tuesday.
“It’s a huge deal because if you’re a Prime subscriber and you use the video-on-demand service, the titles just doubled with this Epix announcement this morning,” he said on “Fast Money.”
Amazon Prime subscribers already get upgrades such as free shipping and can watch streaming movies on the Kindle Fire.
Responding to a question from trader Stephen Weiss over whether the announcement could be “the final straw” for Netflix, Jackson said, “I totally agree.”
Jackson added that the announcement pushed Netflix stock lower than it boosted Amazon’s, and he added that Epix would likely strike other deals with Verizon or CoinStar, which spells trouble for Netflix.
“It just shows that the exclusivity is going away for Netflix, and therefore, what are you left with with Netflix? You’re left with just a streaming business where you’ve got to bid against all these other well-capitalized companies for content.”
Jackson said Amazon was a stock with short-term upside into Thursday’s announcement of a new Kindle Fire device.
“I think on the news you sell it and kind of stay to the sidelines,” he said. “On a fundamental basis, just take a pause.”
Trader disclosure: On Sept. 4, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long AGU; Guy Adami is long MSFT; Guy Adami is long NUE; Guy Adami is long BTU; Stephen Weiss is long HK; Stephen Weiss is long QCOM; Stephen Weiss is short X; Stephen Weiss is short TCK; Stephen Weiss is short AKS; Stephen Weiss is short VALE; Stephen Weiss is short AAPL PUTS; Joe Terranova is long VRTS; Joe Terranova is long WFM; Joe Terranova is long AAPL; Joe Terranova is long CSTR; Joe Terranova is long CHKP; Joe Terranova is long EMC; Joe Terranova is long NXPI; Michael Murphy is long WFC; Michael Murphy is long TGT; Michael Murphy is long SDS; Michael Murphy is long JCI.
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