Netflix Available On-Demand Through LG Tvs
Los Gatos, Calif. Netflix and LG Electronics are taking on-demand movies to a new level, as the electronics company plans to market a high-definition television that will stream movies from the video-rental company.
Netflix members can build their selections directly through the Netflix Web site. The set will use broadband connections to deliver selected HD movies and TV shows through the set, without any external devices. The feature will be included in Netflix’s existing price plans at no extra charge. Netflix has approximately 7 million subscribers.
iPhone coming to Target?
The increasing tendency on the part of Apple to sell its products through mass market retailers suggests that its popular iPhone could eventually be available at Target stores.
The iPhone was initially sold at Best Buy, and then last week distribution was extended to Walmart, where a major launch involved the use of special in-store fixtures and prominent positioning in advertising including the front cover of the retailer’s most recent circular.
From Apple’s standpoint, the move increases consumer access to the popular product, whereas for Walmart, the iPhone brings added brand cache to an electronics department that has undergone a significant makeover the past few years. Apparently, the brand halo of Apple was worth a considerable amount to Walmart as the company agreed to sell the iPhone for only $2 less than the price at which it is offered in Apple’s stores. However, as a company keen on protecting the image and equity of its brand, an Apple distribution agreement with Target would appear to have made more sense since the brand identities of Target and Apple are more closely aligned, even if the short-term sales potential with Walmart is greater.
Prediction: Target sells credit
A deteriorating credit environment could make it more likely that Target will sell the remainder of its credit card receivables, according to Citigroup investment analyst Deb Weinswig. That possibility and nine others were listed in a report highlighting 2009 predictions. According to Weinswig, the weak performance of the credit segment in 2008 and continued headwinds in 2009 may lead Target to sell its remaining receivables, possible at fire-sale prices. JP Morgan Chase would be a likely buyer in our view given its significant current investment in the portfolio as well as its strong consumer credit business.
On May 19, 2008, Target sold a 47% undivided interest in its credit receivables to JP Morgan Chase for an initial investment of $3.6 billion.
As for some of Weinswig’s other notable predictions, look for falling membership income at warehouse clubs, increased private brand penetration at Walmart and deteriorating drug store profitability due to prescription drug pressures.