Where Do Netflix, Redbox, and Blockbuster Go From Here?

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Shares of Netflix (NASDAQ: NFLX  ) , Coinstar (NASDAQ: OUTR  ) , and Blockbuster parent Dish Network (NASDAQ: DISH  ) 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's Tech 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 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., 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 (NYSE: 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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