Shares of Netflix , Coinstar , and Blockbuster parent Dish Network stumbled early yesterday -- though Redbox parent Coinstar clawed its way back up for a positive close -- on grim video consumption trends.
Piper Jaffray analyst Michael Olson issued a cautious note yesterday, leaning on NPD Group data showing a decline in visits to the Netflix, Redbox, and Blockbuster websites.
The report, as retold by Barron'sTech Trader Daily blog, finds that year-over-year traffic growth to Netflix was a mere 2% in October and November before slipping in December. Unique visitors during the quarter fell by 4%, but that doesn't mean that revenue is slipping. Year-over-year traffic also declined during the second and third quarters, but Netflix still managed double-digit percentage growth on the top line.
The news is scarier for Coinstar's flagship DVD rental service, as Redbox.com traffic fell 13% during the quarter.
Piper Jaffray is taking the data in stride. Olson is eyeing a 24% pop in domestic streaming subscribers at Netflix and a 13% surge in revenue for Redbox.
Blockbuster.com, on the other hand, suffered a brutal 25% plunge in traffic. Traffic was actually trending higher earlier in the year for the fledgling DVD service, but apparently all of the store closures and watching NCR unload the Blockbuster Express kiosks to Coinstar has destroyed interest in the fading store chain.
Investors should always take these third-party reports in stride. They will rarely be entirely accurate, and obviously there's more to these video services than website traffic suggests.
Until there's material weakness in the actual financials -- as we saw in Netflix late last year before it bounced back -- these trend reports are worth taking in, but any investing implications are often best ignored.
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The article Where Do Netflix, Redbox, and Blockbuster Go From Here? originally appeared on Fool.com.
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