Potential Buyers for Netflix's DVD Division
NEW YORK (TheStreet) -- On Wednesday, I wrote an article for TheStreet advocating that Netflix(NFLX) needs to -- and will -- sell its DVD division in a bid to not only fund its streaming operation, but for survival. Hastings will likely spin it as part of his vision for the future, but the truth is the company will need the cash to fund that vision. As I wrote in that article:
One way or the other the DVD will help keep Netflix alive. The company will either need to flip-flop again and place a renewed focus on the service or sell it for what will amount to another bailout.
If Netflix wants to unload the DVD business -- and at least one source familiar with the company's operations told me that I am not crazy for thinking they will -- it needs to find a buyer. On the surface, this seems like an impossible task.
Even as a NFLX bear, I have loads of respect for Reed Hastings. He's a big-picture thinker. A visionary. I love people like that. He is correct when he classifies streaming as the future; however, he's too quick to give up on the DVD.
DVD has lots of life left in it, plus, as noted, it can provide much-needed revenue to fuel streaming and international expansion. It can also make movie studios, who do not want to see the DVD die just yet, happy -- possibly prompting them to give Netflix better deals for digital licensing rights.
But, for one reason or another, Hastings is in the process of spurning the girl that brought his company to the dance. Ironically, the DVD business he neglects could save his company, at least for the time being.