J.P. Morgan: Blockbuster and Netflix Will Underperform12 Jan, 2007 By: Jessica Wolf
As Blockbuster and Netflix duke it out for the hearts of online DVD renters, both leading DVD rental companies got a dash of cold water from brokerage firm J.P. Morgan Securities today.
J.P. Morgan analyst Barton Crockett reportedly downgraded both Netflix and Blockbuster from “Overweight” to “Neutral.”
According to reports, Crockett said he is skeptical that Netflix will end the year with its projected 6.3 million subscribers, falling short by about 100,000 subs. And, he reportedly told investors that the online DVD service will be up against tough competition thanks to Blockbuster's Total Access subscription plans.
Blockbuster also underperformed in new subscriber gains, according to Crockett, by about the same margin as Netflix.
But Crockett also said, according to Associated Press, reports that the video rental market is not necessarily in a “tailspin,” and Blockbuster has a good chance for survival as more competing stores shut down.