Outspoken Wedbush Securities analyst Michael Pachter has downgraded Netflix to "underperform," calling the film rental service "broken" and saying there may be no bottom to the company's 2012 losses.

Pachter says the price increases of earlier this year were handled in a haphazard fashion that cost the company dearly – and notes the fallout from it is still continuing months later

"It is clear that a price increase was necessary, and equally clear in hindsight that a 60 percent increase on the hybrid customer was too much," he wrote. "While we think that the company would have seen some customer defections and trade-downs at any price point, it is clear to us that the defections and trade-downs would have been less dramatic had the price increases been smaller."

Pachter, who has historically been a bit bearish on Netflix, added he was also particularly concerned with rising content costs and felt the focus on international expansion would be a significant cash drain on the company for an extended period. 

"We think that the company’s pricing structure is wrong, and its business model is broken," he said. "At current prices, we expect Netflix to continue to lose more hybrid customers than it adds, and those who remain will not be particularly profitable. ... Unless the company changes its strategy, we do not see upside to our $45 price target, and we see meaningful downside. In order to prompt a strategy change, company management must first admit that the current strategy is unsound, and we have seen no indication of that over the last several months."

Disney was the first studio to fully integrate iOS systems with their films, but they're no longer the only filmmaker doing so.

The Weinstein Company and Technicolor have teamed up to utilize the tech company's MediaEcho application to supplement last year's Best Picture "The King's Speech" with historical footage, additional commentary and behind the scenes information.

Like Disney's SecondScreen tool, the app syncs with the BluRay version of the film, displaying relevant content at appropriate moments of the film.

"The key benefit of MediaEcho as a second screen application is to offer consumers content that is synchronized and relevant to what they are watching on the TV screen," said Lew Rothman, executive vice president of Operations and Chief Technology Officer at The Weinstein Company.

It's a one-off right now, but the companies plan to add the free app to other films moving forward. The service only works with BD-Live enabled players and you'll need an iPad as well. iPhones and iPod Touches lack the necessary screen space to fully support the content.

Fox, too, jumped on the Second Screen movement earlier this year with its Sons of Anarchy app , only instead of using it as a place to highlight "extras," it focused on capitalization.  "SOA Gear," will enable viewers of the current season and the third-season Blu-ray to purchase products that appear during episodes.

The launch window has been a rocky one for Activision's Call of Duty Elite, but even with a few bugs remaining, the publisher is ready to start ramping things up.

This Friday, members of the subscription service will get the chance to see the first installment of Friday Night Fights, an original entertainment series that's produced by Ridley Scott and Tony Scott's RSA Films.

The show will let rivals settle their differences in multiplayer battles of "Modern Warfare 3," with the first episode pitting teams from the U.S. Army vs. U.S. Navy.

"From the beginning, our goal with Call of Duty Elite has been to bring the Call of Duty community together in new ways," says Eric Hirshberg, CEO, Activision Publishing.

"Fans of Call of Duty spend as much time playing the game, as sports fans spend following their favorite teams—if not more. So we figured, if sports fans get all kinds of shows outside of the games to feed their passion, why not do the same thing for Call of Duty fans?"

The show will premiere at noon and be available for replay via streaming.

Google TV was the biggest thing that didn't happen at the 2011 Consumer Electronics Show. Released with a lot of fanfare in late 2010, it immediately hit resistance and most television manufacturers quickly scrapped plans to include it in their 2011 sets.

The system probably won't have much of a presence at the 2012 CES either, but it looks to have found an ally with one of the largest names in TV.

Samsung president Boo Keun tells Reuters that the company is in "last stage" talks with Google to launch a Google TV device. The big question is whether the technology will be integrated into one of the company's sets or if this will be a standalone set-top box, along the lines of Logitech's Revue (something the company's own CEO has dubbed "a big mistake").

Whatever form the alliance takes, it's unlikely Samsung will debut the product at CES. Keun says the company plans to unveil it at a separate event later in the year.

The Entertainment Software Ratings Board is about to expand its territory.

The ESRB and CTIA (Cellular Telecommunications Industry Association) have called a press conference for next week to announce a new rating system for mobile applications – an area the video game ratings board has had an interest in for some time.

At present, there's no real standard when it comes to app ratings. Apple uses its own system, while Google's Android Market lets developers rate their own applications. The new system, say the organizations will be "based on age-appropriateness of [the apps'] content and context".

The ESRB's game rating system is one of the most widely praised in the entertainment industry – and currently covers some 21,000 titles. While the group would almost certainly like to see the E, E10, T, M and AO ratings make their way to the app world, there has been some resistance previously.

The details about the new system will be revealed Nov. 29.

The Saturday morning serial model of the 1950s may be long dead in the film world, but a new eBook publisher is looking to bring it back in a more modern form.

Backlit is producing a string of Young Adult fiction in eBook form, recruiting Hollywood writers to pen the tales, which invariably end with a cliffhanger. It's a model that, if it works, not only guarantees a fairly predictable revenue stream, but has caught the eye of producers.

Jack Giarraputo of Happy Madison has secured a first look film and television deal with the company, which currently offers two series - Borrowing Abby Grace and The Start-Up – and has two more queued up.

Prices are kept low intentionally. Borrowing Abby Grace and The Start-Up cost $2.99 per 'episode' with a word count of 20,000-30,000 words. That's about 1/5 the size of a Twilight novel. (One upcoming series, entitled, The Dig, will charge $6.99 for a 60,000-80,000 word episode.) To ensure the material connects with its audience, Backlit has recruited Hollywood writers who have a track record of appeal to the demographic. (All authors write under pseudonyms to protect their day jobs.)

"There's kind of a renaissance in reading these days," says founder Panio Gianopoulos. "Teenagers today read more words per day than any generation before them. Of course, they're reading Facebook and Twiter and text messages, but they're not opposed to reading books."

The serial formula is no stranger to print, either, but hasn't seen a lot of success since Steven King revived it with The Green Mile.

The goal, of course, is to see these series expand to other mediums, but Gianopoulos declined to discuss whether Giarraputo has picked up any options yet. However, he said, "We think the eBook is the perfect way to create a television model for our series."

The records keep tumbling for Modern Warfare 3.

Activision's action shooter has set a new standard for the entertainment industry, earning more than $775 million in five days, beating all gaming, theatrical and book sell-through totals. The previous record, not surprisingly, was last year's "Black Ops" installment of the Call of Duty franchise, which took in $650 million.

Life to date sales for the Call of Duty franchise now top $6 billion worldwide – a number that's going to keep growing as momentum for the game doesn't appear to be slowing down. (The game sold 6.5 million copies in the U.S. and U.K. in its first 24 hours on shelves, earning $400 million.)

"'Call of Duty' has become the first entertainment property in history to set five-day launch records for three consecutive years across all forms of entertainment," said Activision CEO Bobby Kotick.

The player numbers are just as impressive. By the end of launch day, people had logged more than 7 million multiplayer hours of "MW3" – a 19 percent increase over "Black Ops". (That's nearly 800 years, for those of you doing the math.)

Additionally, over 3.3 million people played the game on day one – a 700,000 player improvement over last year's installment.

The SOPA anti-piracy bill might be strongly backed by the Hollywood community, but the Consumer Electronics Association – the group behind the annual Consumer Electronics Show – wants no part of it.

In a statement to the House Judiciary Committee on H.R. 3261 – the "Stop Online Piracy Act" (or SOPA) – the organization voiced concerns about the bill, warning of collateral damage to innovation in the electronics field.

"CEA and its members are eager to support legislation that is directed to foreign 'rogue sites' – the 'worst of the worst' – whose infringing activities lie beyond the reach of existing U.S. authority, and have no conceivable justification under U.S. law," the group said. "But as written, H.R. 3261will do little to stop piracy and instead will undermine both bona fide online U.S. businesses, create new private causes of action and weaken the open Internet that encourages free expression."

The group called the definition of theft "extremely overbroad" and said a single copyright complaint from a company can be a "death sentence" to a legitimate business.

"The law would require not just a 'take down' of the controversial product, but a shutdown of all online purchasing and advertising for any other product on the site," the group said. "The plaintiff need only complain that the business is 'marketing' a product for a 'use' that would be copyright infringement.

"This sort of claim has been commonly, and often unsuccessfully, made against innovative and legitimate consumer electronics products. In 2000, such a claim was made by several motion picture studios against Replay TV, an early competitor of TiVo and a forerunner of the DVR products now routinely distributed by cable and satellite companies to their subscribers – based only on the product’s ability to search, record, index, and retrieve content."

The group also said it believes DNS blocking provisions in the bill will hurt legitimate businesses more than pirates, since pirates are able to circumvent those measures.

Bob Iger, Disney president and CEO, is joining the Board of Directors at Apple.

The company today announced his appointment to the board as well as the company's audit committee. At the same time, long-time board member Arthur Levinson (co-founder of Genentech) has been named chairman.

“Bob and I have gotten to know one another very well over the past few years and on behalf of the entire board, we think he is going to make an extraordinary addition to our already very strong board,” said Apple CEO Tim Cook. “His strategic vision for Disney is based on three fundamentals: generating the best creative content possible, fostering innovation and utilizing the latest technology, and expanding into new markets around the world which makes him a great fit for Apple.”

Iger hasn't been formally associated with Apple before, but he certainly has been up to speed on the company's operations. Iger and Steve Jobs served together at Disney, following the Mouse House's acquisition of Pixar in 2006. It was Iger, in fact, who managed to mend the rift between the companies, following a showdown between Steve Jobs and Michael Eisner. 

The Kindle Fire is on the way to customers – and with it, Amazon's hoping to revolutionize the tablet business.

The $199 entertainment-focused device is actually shipping a day earlier than planned, as Amazon looks to build on the substantial buzz the Kindle Fire has generated since it was first announced. The company also plans to ship the Kindle Touch and Kindle Touch 3G eReaders tomorrow – six days ahead of schedule.

The Kindle Fire is considered the tablet most likely to give Apple's iPad a run for its money, due in large part to its affordable price. Amazon's taking a razor and razor blades sales model with it, keeping hardware costs low but reaping the benefits of that by controlling the content that runs on the device.

Technically an Android tablet – and, thus, able to run most of the offerings in the Android Marketplace, the Kindle Fire is focusing on mainstream entertainment, specifically movies, television, books, magazines and music – all sold through Amazon.

Reviews have been mixed, at best. (Variety has not yet received a review unit of the device.) But with the buzz and the holiday rush underway, those negative comments aren't likely to substantially affect sales.