Netflix Stock Drops on News of Amazon, HBO Partnership

The streaming company faces stronger competition in the online video marketplace.
4:35 | 04/23/14

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Transcript for Netflix Stock Drops on News of Amazon, HBO Partnership
I'm Michelle Franzen in New York the financial markets close here in New York Wednesday. It's -- third its story stuck. Today Netflix is in the news again this time its stock shock took a hit thanks to the announcements. Of a major media alliance to explain what I'm talking about I'm joined by -- -- toll of Yahoo! finance. Might give us a run -- what happened that took the wind out of Netflix sales. Well struck a deal with HBO which is owned by Time Warner to. Basically carry a lot of HBO programs on Amazon prime and also through. It's new device fire TV which is going to be kind of up a piece of hardware you can attach to your TV. Now this basically takes -- shows he's not current shows not first drive but any sort of back catalog of HBO. It takes them out you know all out of access for Netflix so basically I think has sort of accentuated to the market. That this a very competitive game Netflix by no means owns the streaming video us basically space. They can't necessarily guarantee themselves access to everything people want to watch so. It's a very kind of fast moving competitive picture right now -- Netflix I think a lot of people who -- -- got enthusiastic about the stock earlier in the week. Are having a little -- a second thoughts. Well let's take a look at one of the gauges for that competitive field let's take a look at -- today's Netflix stock -- give us an idea of what we're seeing here after that job. So we didn't get a job after Netflix reported its results which had you know very good subscriber numbers are very good growth metrics and also they say they were going to be raising prices on new customers in the coming year which really did. Pessimists and the masses that they feel very secure in their market position I don't really think people are gonna dump. Subscriptions because -- slightly more expensive. But why do you think the Amazon and HBO -- tells us is what could've been. A little more of of a friendly kind of a game here between some in the media companies. And Netflix is becoming a little more you know contentious let's just say you know that don't mind that Reed Hastings. The CEO of Netflix -- for very long time said. Netflix is mission is to try to become HBO before HBO to become Netflix and this complicates an additional element. Sounds like it's a very competitive field very going back and forth -- lineup of course of HBO shows. But Amazon prime will stream is impressive but with one important thing left out no game at -- yet as you mentioned not the first time. But few good library -- there that Netflix will not be able to get their hands on. Can net flicks just absorb this development or will provoke them to strike a deal somewhere else and -- -- I think -- if both in a way they can certainly absorbent in the sense that I don't think there's going to be an activist from Netflix because people say oh I can now. You know get these handful of HBO shows on Amazon. But I do think that the margin it makes them a little more urgent to get better programming exclusive programming. For themselves I think everyone's playing the same game we know this right Netflix is investing in. Original contents as is Amazon. As are other digital media companies so it seems as if the whole industry is kind of getting splendid up and the lines are gonna blur between producers of content distributors of content. And all the rest of -- so at the moment Netflix is okay it's certainly getting continue to grow throughout the world. Meanwhile HBO is trying to protect its HBO to go subscription -- give you all access so it's everyone's trying to figure out exactly how you can sort of play both sides here and get access to all those eyeballs that seemingly want. A lot more choice in what variable watch. So -- -- the real winner here and what does this mean for consumers -- all this back and forth and volleying is that going to help consumers in the end. I what I mean obviously I think it well I you know if there's one clear winner it's probably Amazon prime members because it without paying anything more they're getting more of these of these shows -- that service continues to get. Kind of richer even without the price going up all the time so that's one thing -- you know Amazon has shown it's it's perfectly -- You know to essentially give more to customers at a very low margin and sort of try to make up or down the road so I do think it's it's a win for consumers and I think. You know in a weird way kind of accentuates the value of Netflix to -- -- You know it just tells you that the entire world recognizes. Streaming video on demand. Is words going and so that's not a bad place to be Internet play where it's going where -- sat. Like Santelli at Yahoo! finance thanks for joining us. You've been watching stories stocks -- -- for your latest business headlines I'm Michelle Franzen New York.

This transcript has been automatically generated and may not be 100% accurate.

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