For Sale?

A Wall Street analyst predicts Netflix’s recent announcement to separate itself from its DVD-by-mail rental service (now run independently as ‘Qwikster’) is the first step in selling its online streaming business to Amazon.com.

Michael Pachter, of Wedbush Securities raised his buy rating on Netflix stock, claiming the company could be on the verge of a lucrative sale of its increasingly-important streaming business to the online retailer:

Pachter said that Amazon has always wanted to be in the video-streaming business, but has been hampered by tax considerations due to state sales tax issues. Most states require companies that have physical operations in those states to collect sales taxes on transactions done within those states.

Amazon has so far been able to get around most of those sales-tax issues by virtue of its being an online retailer. Pachter said Amazon would likely have had to begin collecting state sales taxes had it purchased Netflix outright because that company has a wide network of distribution centers across many states.

However, Pachter said a separate video-streaming business from Netflix is more appealing to Amazon, as the company could still avoid enforcing the state sales taxes, and dramatically increase its own video offerings.

“If Amazon were to acquire only Netflix’s streaming business, it could triple the size of its content library, and gain traction as an industry leader,” Pachter said. “Netflix’s streaming has current content deals that provide it with access to movie content during the premium cable TV window, and Amazon has the financial resources to secure additional streaming rights.”

But not every analyst is convinced Pachter is on the right track.

Brett Harriss, an analyst with Gabelli & Co. in Rye, New York, told Bloomberg News that potential buyers are more likely to wait until Netflix gets cheaper before making a bid.

“At some point, this does get cheap,” Harriss said in an interview. “But I don’t think we’re down there yet.”

Other analysts think the concept of a sale is correct, but the buyer is all-wrong.

“The name that would pop in my mind first is Google,” Tim Ghriskey, who oversees $2 billion as chief investment officer of Solaris Group LLC in Bedford Hills, New York, told Bloomberg. “Google loves to throw money at ideas and companies that they think have the potential to be game changers and become major players.”

[flv]http://www.phillipdampier.com/video/CNBC Netflix Feeding Frenzy 9-21-11.flv[/flv]

Netflix Feeding Frenzy: The vultures are circling as analysts on CNBC pound Netflix’s recent price and service plan changes as this compilation of reports illustrates.  (18 minutes)

Earlier this month, many Verizon prepaid customers with texting plans began receiving messages on their phones from the company, typically after completing a minutes refill:

“Starting on October 14th, 2011 when sending a picture or video message, you will be charged for each recipient for each message sent.”

Controversy ensued, as customers interpreted that message to mean Verizon was now only including plain text messages, not picture or video messages, in their texting plans.

But hang on a moment, says Verizon social media rep JoeL_VZW.  It doesn’t mean that at all.  Verizon was attempting to clarify how they charge for messages sent to multiple recipients.  Send it to one person, it counts as one message.  Two people, two messages… and so on.  Customers can still send picture and video messages without extra fees, assuming they have a texting plan with a sufficient allowance.

“If you sent one picture to two people it would count as two messages that would come out of your 250 bundle. You wouldn’t incur any extra picture messaging charges as long as you haven’t exceeded 250 text or pictures,” he says.

Unlimited customers are not impacted by the change at all, but those on texting plans with 250 message allowances might be, if they send a lot of text messages to multiple recipients.

Still, it was easy to interpret the message very differently, all thanks to not having sufficient space in a single text message to explain it better.

Cellular South, a regional wireless provider serving Mississippi, western Tennessee, and parts of Florida and Alabama, relaunched operations this morning as C Spire Wireless.

Company officials claim C Spire will be the first carrier to offer “personalized wireless services” that will adapt to customers based on how they use their phones and other  devices.

“We have entered a new era in wireless – an era centered on broadband networks, mobile computing devices and now personalized services. Completing calls is only a small part of what we deliver our customers,” said Hu Meena, president and CEO of C Spire. “Since 1988, our main focus has been on providing exceptional service for our customers and their wireless needs. Those needs have changed dramatically and will do so at an even more rapid pace in the future.”

Among the changes underway across the mobile industry is an effort to end unlimited wireless data plans for smartphone customers, but that won’t be the case at C Spire, which is retaining unlimited smartphone data usage for many of its service plans, sort of.

“C Spire understands that when customers have to measure and limit their data, they aren’t getting the optimal experience with their wireless provider. That’s why the company is introducing Individual and Family Choice Plans that offer customers the ultimate in choice and flexibility, and access to infinite data,” the company said in a statement.

But there is a major catch — that “infinite” data usage does not include streaming multimedia content.  That comes extra: priced free through October 29. Then 2 hours for $5, 5 hours for $10, or unlimited usage for $30.

How many "percs" can I win picking out the sloppy spelling errors on C Spire's website?

C Spire does away with counting megabytes or gigabytes and asks customers to guess how many hours they expect to use streaming media applications on their phones. That means customers will pay $50 a month for C Spire’s Choice D 500 plan, which includes unlimited web browsing and e-mail, plus 500 talk minutes per month.  But if you want to listen to unlimited online radio or stream video, that price increases to $80 a month.  But that $80 does buy an unlimited experience at that point.

C Spire’s pricing reflects the failure of strong Net Neutrality protection, allowing carriers to charge extra for different types of content on its network.

Wireless mobile broadband customers still face a cap on C Spire’s data-only plans: 1GB for $19.99, 3GB for $29.99 or 5GB for $49.99.

Users must spend at least 50 percent of their usage during the month within a C Spire service area.  Excessive roaming can get your service suspended.  As a regional carrier, that means “home usage” is limited to a handful of southern states.

But company officials are spending little time discussing their pricing and plans, instead focusing on how C Spire will “personalize” the wireless experience.

No other wireless provider understands its customers and adapts to their wireless needs like C Spire. Customers will see this unique personalization in apps and content that fit who they are, services that anticipate their needs, and rewards they’ll get just for using their phone in new ways. C Spire’s industry-leading personalization capabilities are powered by Pulse, a proprietary system that enables the company to understand and develop a closer relationship with its customers. In turn, C Spire recommends and provides the right selection of technology experiences tailored for each customer – giving them unmatched wireless personalization.

C Spire offers what they are calling “percs” — points that customers can collect based on interacting with the company’s website and social media platforms, the number of years they remain loyal to C Spire, and opting into company research programs including their Scout Program, which track apps usage.

The rewards on offer at the moment are not impressive — waiving late bill payment fees, priority access to customer service, feature upgrades, and discounts on accessories and shipping.

The company’s website has been unresponsive at times this morning and customers on C Spire’s Facebook page are complaining they are confused about pricing and plan changes, particularly those related to streaming data usage.

C Spire's Rewards Program

[flv width=”480″ height=”290″]http://www.phillipdampier.com/video/C Spire Ads 9-26-11.flv[/flv]

Magic Sparklies: The wireless company’s new advertising campaign introduces Cellular South’s new brand: C Spire Wireless (1 minute)

AT&T customers in western Colorado are furious at AT&T for suggesting expensive phone upgrades were required to get back cell phone service that actually went out because of a cell tower failure.

Stop the Cap! first reported this story earlier this week, when Grand Valley customers discovered their cell phone service (and 2G data services) suddenly stopped working last weekend.  Customers lined up inside and outside the doors of AT&T stores in the Grand Junction area to get an explanation for the service disruption, only to be told their 2G data service had been discontinued and they’ll need to buy new phones to get their service restored.

An undisclosed number of customers signed new two year contracts and upgraded to smartphones — which carry a considerably upgraded price to cover the mandatory data plan that accompanies them.

But now AT&T says a cell tower failure was responsible for customers losing access to voice calling, and any disruption to 2G service will be temporary until the company completes shifting that data service to a different frequency band.

Now customers are complaining they were defrauded by AT&T store employees who emphatically told them no cell service outage existed in the area.

“Is that fraud,” AT&T customer Bill Somerville asked KJCT-TV. “Are they taking advantage of people by not giving them the information they should have gotten?”

“They categorically lied about the status of the service and [forced] people into a new contract and new equipment,” said AT&T customer Jay Anderson.

“If that is customer care, that’s not the customer care I’d like to have,” added Somerville.

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KJCT-TV talked to more angry customers who feel AT&T mislead them into signing expensive new two year contracts for new phones when a tower outage actually was responsible for the disrupted service.  (3 minutes)

According to Edmonton city Councillor Kerry Diotte (11th Ward), Rogers Communications told him the company needs up to 1,000 new cell towers in the Edmonton area alone to meet the growing demands from cell phone, smartphone, and tablet owners who are putting pressure on the company’s wireless network.  That’s a number Rogers disputes, but regardless of how many towers eventually get erected, few residents want to live next door to one.

Diotte is caught in the middle of a major, some say inevitable, fight between the telecommunications giant and homeowners living near the proposed home of a new 25 meter cell tower that is as tall as an eight story building.

Diotte

Diotte attended a heated public meeting Tuesday evening between residents of Hazeldean and Rogers officials over plans to place the new monopole antenna right in the center of town in a residential district.

“I will absolutely bring everything that I can to try to stop this,” Diotte told CTV Edmonton. “It’s the will of the people in this ward.”

CBC Radio in Edmonton explored the cell tower controversy in Hazeldean back in July when Rogers first announced plans to erect an 82 foot monopole cell tower at a local senior’s center. Rogers says increased demand requires the company to place new cell towers in residential neighborhoods to meet demand. July 14, 2011. (7 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

Rogers officials found themselves shouted down at times during Tuesday evening’s meeting, as dozens of residents complained the new tower would reduce property values and could pose a health risk.  At least one resident wants Rogers to pay moving expenses to allow her family to leave the area before the tower is built.

Hazeldean residents say a better spot for the antenna would be in an industrial neighborhood a few blocks away.

Rogers Communications says wireless data demands are growing exponentially, and constructing new cell towers improves reception, data speeds, and divides up the increasing load of data traffic on their network.  Unfortunately, cell towers are increasingly required where customers live, work… and use their wireless devices.

For the immediate future, Rogers has plans for 20 new cell towers in Edmonton, a number dwarfed by their competitor Telus, which has plans to install 80 new cell towers across the province this year.

Industry Canada has the final say on whether Rogers will ultimately win approval to place its proposed cell tower in Hazeldean.

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CTV Edmonton covered the Hazeldean cell phone tower controversy and spoke with a city councilman who shared Rogers told him they would need another 1,000 cell phone towers in the Edmonton area alone to meet growing demands for cell phone users.  (5 minutes)