Two companies in the business of distributing video had a good day on Thursday: Netflix beat out the New York Times for a spot on the S&P 500, and Cablevision also joined the index, thanks to King Pharmaceuticals merging with Pfizer.
The S&P 500 switchup is good news for the companies, both of which occupy potentially tenuous positions within their respective industries. Cablevision, for example, spent a good portion of October in a messy fight with News Corp over retransmission rights for Fox programming, eventually caving in right before Game 3 of the World Series).
Congress may start intervening in such disputes, since cable providers are dependent on companies like Fox for their content. But every retrans battle in recent memory seems to end with customers losing out on content they want, like G4 or the Hallmark Channel, or the content provider getting what they want.
Meanwhile, the Hollywood studios that fuel Netflx’s catalog of movies and TV shows are growing increasingly uneasy with Netflix’s rising success. While Netflix is making plenty of deals to add new content, several execs were quoted recently as saying that they saw Netflix as a shark out to steal their content — more than a hint that the company may struggle in the coming months to secure the titles it needs to stay relevant. It’s easy to see why Hollywood might feel threatened — Netflix’s stock is up over 230 percent from last year.
But today’s reindexing means a boost in stock prices for both companies and potentially greater stability in the marketplace. It’s no guarantee of success, but these days, there’s really no such thing.
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