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Will iiNet Limited win big from its Netflix deal?


It’s official. US-based subscription video-on-demand giant, Netflix, will start streaming its service in Australia and New Zealand on March 24. In partnership with iiNet Limited (ASX: IIN) Australia’s second largest Internet Service Provider (ISP) Netflix subscribers watching through their iiNet connection will have unmetered access to content. Meaning they will not be charged for the data downloads associated with watching movies online.

It’s the first unmetered agreement for an Australian ISP to be announced ahead of Netflix’s hotly anticipated Australian debut. The launch comes at a time when traditional free-to-air broadcasting is in a state of transformation, with many major broadcasters feeling the pain of reduced viewing and advertising income.

Fairfax Media Limited (ASX: FXJ) and Nine Entertainment Co Holdings Ltd (ASX: NEC) have joined forces to create their own streaming service called Stan. Foxtel part-owned by Telstra Corporation Ltd (ASX: TLS) is another to have already started preparing for the next wave of broadcasting, having recently launched Presto with Seven West Media Limited (ASX: SWM).

Unfortunately movie streaming minnow, Quickflix Ltd. (ASX: QFX), appears all but finished, with a current market capitalisation of just $3.6 million its share price is down 98.6% since 2012. But perhaps the winner from all this disruption will be the ISPs, especially those who like iiNet can partner with the likes of Netflix to provide data for streaming services.

Whilst Telstra customers already have a similar option with Foxtel and T-box, and subscribers to Optus owned by Singapore Telecommunications Ltd (CHESS) (ASX: SGT) – have access to Fetch, today’s announcement will likely be a strong selling point for iiNet.

Here’s how investors can win big

Given the disruptive effect of innovative technology and social media companies, traditional print and media outlets are under the pump. So unless investors are afforded a dirt cheap share price on an investment in such a company, it’s probably best to avoid the sector altogether. However the telecommunications industry is booming. Indeed investors looking for a safer way to play the rise of streaming services and internet usage have no shortage of options on the local sharemarket. Whilst I probably wouldn’t buy Telstra at today’s prices, a number of its smaller competitors look to be good value today.

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Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

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Motley Fool Contributor Owen Raszkiewicz does not have a financial interest in any of the mentioned companies. Owen welcomes your feedback on Google plus (see below) or you can follow him on Twitter @ASXinvest.

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