Today: Netflix debuts in Germany a day after France launch, but will U.S.-centric shows such as new Apatow purchase play well in Europe? Also: Tesla leads tech stocks to a rebound.
The Lead: Netflix lands in Europe, but will it succeed?
Much like the titular character in one of its upcoming shows, “Marco Polo,” introduced Europe to Asia hundreds of years ago, Netflix is bringing Silicon Valley-style video streaming to Europe.
But will anyone care?
The Los Gatos video-on-demand company launched its streaming service in Germany on Tuesday, a day after Netflix made its debut in France, where it already faces criticism. Next on the company’s schedule are four more European countries — Austria, Belgium, Luxembourg and Switzerland.
The costly expansion is expected to net Netflix as many as 6 million new subscribers, more than 10 percent of its current streaming subscription base. However, the company could have issues finding that many new customers if its content isn’t tailored to the wants and needs of the specific countries, analysts believe.
“Viewers will search for the shows they know, and if they can’t find them, they’ll never subscribe,” Gilles Fontaine, a Digiworld analyst based in France, told Bloomberg News.
While Netflix has secured the rights to a couple of German shows — “Stromberg” and “Der Tatortreiniger” — and plans an original show for the French market called “Marseille,” success or failure could depend on the popularity of its U.S.-focused original shows such as “Orange is the New Black” and second-run American TV shows it does not own the U.S. rights to, such as “Modern Family.”
“They’re going to either thrive or fail based on their ability to pick the shows that work the best,” Wedbush Securities analyst Michael Pachter told Bloomberg Television.
CEO and co-founder Reed Hastings told Reuters in an interview that Netflix is looking long-term, with plans to add to its content lineup while attempting to convince French cable companies to provide access to Netflix through their cable boxes.
“After launch is when the real work begins: improving the content being offered and getting on set-top boxes,” Hastings said.
As it spends big to expand into new countries, Netflix is still shoveling money at Hollywood for U.S. shows, as well. On Tuesday, the company announced that it had agreed to a two-season deal for a new television show from Judd Apatow, called “Love.”
Netflix had to fight off Hulu for the show, Variety reported, and guaranteed two seasons to an untested show for the first time since it landed “House of Cards,” the Kevin Spacey-helmed show that was the original spark for Netflix’s recent critical acclaim for original series. Apatow’s track record as a producer and writer of comedies seemingly helped, with Netflix already showing his TV series from the early 2000s, “Freaks and Geeks” and “Undeclared” — both of those shows were canceled after one season.
“Netflix has been supportive in ways I couldn’t create in my wildest fever dreams,” Apatow said in Tuesday’s announcement.
Netflix stock dropped 0.2 percent to $456.91 on the day, and has fallen more than 4 percent so far this week.
SV150 market report: Tesla bounces back along with Wall Street
After Silicon Valley tech stocks slid hard Monday, Wall Street bounced back Tuesday with help from a Tesla Motors rebound.
Tesla had its worst day in months on Monday after a bullish analyst detailed the problems the Palo Alto carmaker has, but gained 2.7 percent to $260.74 Tuesday after a separate analyst checked in on the stock. ISI established coverage of Tesla on Tuesday, giving the stock a price target of $320 — the same as Morgan Stanley’s Adam Jonas — and refuting at least a couple of issues Jonas brought up in his note on Monday. While Jonas considered other manufacturers’ focus on hydrogen fuel cells to be a minus for Tesla, as it could stunt growth of electric-vehicle infrastructure and demand, ISI predicted that battery power would eventually win out and help Tesla. Jonas also doubted Tesla’s entry into China, but ISI wrote, “Examining China’s electric vehicle policy, it is difficult to foresee an OEM better placed than Tesla to assist the government in meeting its (clean fuel vehicle) goals.”Tesla CEO Elon Musk had more to celebrate than a stock gain Tuesday, as his SpaceX space-exploration company shared a big government contract to take U.S. astronauts to the International Space Station.
Apple went against the grain and dropped 0.8 percent to $100.86 after the Subway food chain announced the impending arrival of NFC charge terminals, which should boost the coming Apple Pay mobile payments service, which is already being attacked by eBay’s PayPal; eBay gained 1.3 percent to $51.61. Adobe announced earnings after the bell, and investors didn’t like the San Jose company’s results, as shares dipped more than 4 percent in late trading after gaining 0.7 percent to $70.73 in the regular session. Yelp fell 0.1 percent to $76.54 after the San Francisco online reviews company was hit with a federal lawsuit claiming it collected information from children without parental consent. Google increased 1.2 percent to $588.78 while receiving the bulk of California’s first permits for self-driving cars, and Symantec added 0.1 percent to $24.21 after changing its search filters to stop blocking gay websites. Gilead jumped 3.7 percent to $104.76 amid higher expectations for Sovaldi sales, and fellow SV150 biotech company Nektar Therapeutics gained 0.4 percent to $13.59 after winning FDA approval for an anti-constipation drug.
Up: Pandora, Zynga, Gilead, Twitter, SanDisk, Tesla, LinkedIn, Facebook
Down: GoPro, AMD, Juniper, Apple, SolarCity, Netflix, Yelp
The SV150 index of Silicon Valley’s largest tech companies: Up 12.83, or 0.8 percent, to 1,616.83
The tech-heavy Nasdaq composite index: Up 33.86, or 0.75 percent, to 4,552.76
The blue chip Dow Jones industrial average: Up 100.83, or 0.59 percent, to 17,131.97
And the widely watched Standard & Poor’s 500 index: Up 14.85, or 0.75 percent, to 1,998.98
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