8
   

Netflix doubles-down on the derp

 
 
rosborne979
 
  1  
Reply Wed 12 Oct, 2011 01:20 pm
@Robert Gentel,
Robert Gentel wrote:
Also, for people who don't get what Quikster was about. They want out of the DVD mailing business.

I agree that they want to get out of the snailmail delivery business model, and that they should get out of it. But I'm not sure there's a graceful way for them to exit, given that there are a lot of customers who still prefer the old-school methods. Also there are some people who simply don't have high speed Internet access and who can't download this stuff, or who don't have anything other than a DVD player and a TV to work with. Old technologies and behavior patters don't die easily.

Ultimately the same forces that drove music into download distribution will do the same thing to video (movies, TV, etc). Apple is starting to push it's iCloud, so it's only a matter of time before they start to put huge libraries into the iCloud (first of music, and then video) and simply charge a flat fee for full access to those libraries.

How do you think all this will affect Network Television? I'm not sure Network (Broadcast) TV can survive for long. I have already switched from 95% usage of Network broadcast offerings to only about 5% broadcast offerings, and my selection of material has improved and my costs have gone DOWN by 75%. That's going to be an irresistible draw to the general public once they start to figure out how to do it (not hard for tech savvy people, but daunting to everyone else).
hawkeye10
 
  1  
Reply Wed 12 Oct, 2011 01:28 pm
@Robert Gentel,
YOu need to reread my words, because I am not claiming they have a choice on prices I am claiming that they have been stupid in pissing off their cuctomers with all of their ham handedness these last months, their customer base is the only thing they have (had) going for them in the struggles going forwards to own the streaming business.

Re Starz. I am sure they want everyone to pay about $3 to watch one of their movies, of which they expect to keep about $2.80, which is pure profit as the costs of the content were long paid off. But like the NFL and MLB once thought about only letting people watch the games on TV if they paid huge pay per view fees but soon realized this would be long term stupid I expect Starz to come to their senses .....eventually.
0 Replies
 
tsarstepan
 
  1  
Reply Wed 12 Oct, 2011 01:39 pm
@rosborne979,
Quote:
Apple is starting to push it's iCloud, so it's only a matter of time before they start to put huge libraries into the iCloud (first of music, and then video) and simply charge a flat fee for full access to those libraries.

There's a glitch in your thinking here though. APPLE is a stickler for copyright documentation. They will not allow undocumented MP3 files and video files on their iCloud. Apple will try and try to push users to only upload AA (iTunes files) and iTunes related videos.

But since Apple has not sense for getting DRM free files or knows how to bargain with the music studio and movie studio system, they will never be a cheap alternative for streaming movies. Even their iCloud pricing scheme (can't remember where I saw the initial plan pricing) will not be appealing to consumers of bargain or moderately priced cloud storage.
hawkeye10
 
  1  
Reply Wed 12 Oct, 2011 06:09 pm
Quote:
All the promise of the service starts to break down when you look into how it actually works. If you go out to purchase either Horrible Bosses or Green Lantern on DVD or Blu-ray this week, you'll find a 12-digit redemption code for a digital copy of the movie. After you have created an UltraViolet account, as well as a Flixster account -- Warner Bros.' social movie portal -- and entered the 12-digit code, you can stream your movie through Flixster's website and App. At the moment, UltraViolet has no set-top-box support, but the service should eventually be available on the Xbox 360 and connected TV's.

The idea is you buy a movie once and watch it anywhere. In general, I like this, but UltraViolet missed when it made the first purchase a physical copy. It marks the service as an attempt by movie studios to reinvigorate DVD and Blu-ray sales.

Frankly, fighting to preserve physical media is a waste of time
. Services such as Apple's iTunes and Microsoft's Zune Marketplace allow users to buy or rent HD movies from the comfort of their couches. Meanwhile, Netflix (Nasdaq: NFLX ) streaming, Hulu, and Amazon.com (Nasdaq: AMZN ) have introduced consumers to the concept of paying for access to a buffet of movies and shows rather than owning them outright. With so many better options, DVD and Blu-ray will most likely go the way of VHS and compact discs


http://www.fool.com/investing/general/2011/10/12/hollywood-still-doesnt-get-it.aspx

We need to seriously consider that studios might think that they can get people to keep paying $10-15 for a movie, by buying a hard copy plus rights to play the movie on digital systems with out limit. Given how rarely I care to watch a movie more than twice, even more than once is a stretch, this seems a foolish position to take. We are increasingly demanding to pay less for all content, there is no hope for Hollywood bucking the trend. However, the major studios might currently be unwilling to let Netflix have access to their content at any price, because they hope to move the consumer backwards in time towards paying the big fees for content.

I find this idea interesting, for while the music industry ignored warnings for years that they were on the wrong path by trying to maximise current revenue for mediocre content and as a result eventually found themselves bypassed by the producers and the customers, Hollywood seems to have learned not a damn thing. Hollywood seems determined to repeat the mistakes of the old record companies.
0 Replies
 
rosborne979
 
  1  
Reply Wed 12 Oct, 2011 07:15 pm
@tsarstepan,
tsarstepan wrote:

Quote:
Apple is starting to push it's iCloud, so it's only a matter of time before they start to put huge libraries into the iCloud (first of music, and then video) and simply charge a flat fee for full access to those libraries.

There's a glitch in your thinking here though. APPLE is a stickler for copyright documentation. They will not allow undocumented MP3 files and video files on their iCloud. Apple will try and try to push users to only upload AA (iTunes files) and iTunes related videos.

I wasn't talking about uploading. I think they're going to turn a portion of their iCloud into an iLibrary of streaming content (download only).
Robert Gentel
 
  1  
Reply Thu 13 Oct, 2011 04:10 pm
@rosborne979,
They are currently (reported in the last 48 hours) in negotiations to stream TV and Movies but it is sounding like what they are asking for is permission to stream your purchased media (not an all-you-can stream solution).

Too bad, I'd love to see them tackle the Netflix model.
Robert Gentel
 
  2  
Reply Thu 13 Oct, 2011 04:20 pm
@tsarstepan,
tsarstepan wrote:
There's a glitch in your thinking here though. APPLE is a stickler for copyright documentation. They will not allow undocumented MP3 files and video files on their iCloud. Apple will try and try to push users to only upload AA (iTunes files) and iTunes related videos.


This is not true. In fact the truth is closer to the opposite as they are the first to ever provide a way to take those illegal files and make them legal. In a few weeks they are going to release a service encouraging you to upload your pirate MP3s and they will replace them with legal DRM-free music for $25/year.

Got pirated music? Pay Apple $24.99 per year for iTunes Match and RIAA amnesty

Quote:
But since Apple has not sense for getting DRM free files or knows how to bargain with the music studio and movie studio system, they will never be a cheap alternative for streaming movies.


Again, this is just not true. All iTunes music is now DRM free because they finally had the clout to make content-holders do it. They do not have the power in TV and movies but they are against restrictive DRM, it is a requirement of content-holders and not Apple.

Quote:
Even their iCloud pricing scheme (can't remember where I saw the initial plan pricing) will not be appealing to consumers of bargain or moderately priced cloud storage.


Again, this is completely false. It's $25/year. I currently pay more than that per month to store my music in the cloud. Their pricing is the cheapest of any such service from any major player. I will save hundreds of dollars if I can switch (which remains to be seen, as I have heavy requirements).

http://img442.imageshack.us/img442/7110/itunesmatch5180592.jpg

It's a neat deal man, the first ever to launder those mp3 files. I wouldn't knock it, for $25 you can launder up to 20,000 files and store it all there for a year. Cancel it and you can keep the upgraded (higher bit-rate), DRM-free music.
rosborne979
 
  1  
Reply Thu 13 Oct, 2011 07:35 pm
@Robert Gentel,
Robert Gentel wrote:

They are currently (reported in the last 48 hours) in negotiations to stream TV and Movies but it is sounding like what they are asking for is permission to stream your purchased media (not an all-you-can stream solution).

Too bad, I'd love to see them tackle the Netflix model.

I suspect they are doing things in stages.
0 Replies
 
tsarstepan
 
  1  
Reply Thu 13 Oct, 2011 07:54 pm
@Robert Gentel,
How many gigs per year does this $25 get you? 20 gigabytes?

That's $5 more then Amazon as their going for a buck a gigabyte. Plus they have an unlimited space for music files if you have the storage plan of at least 20 gigabytes for $20.
Robert Gentel
 
  2  
Reply Thu 13 Oct, 2011 08:03 pm
@tsarstepan,
tsarstepan wrote:
How many gigs per year does this $25 get you? 20 gigabytes?


About an order of magnitude more than that. It is measured in songs. It gives you up to 20,000 songs at high bit-rates for that price. It would be well over 100 GB by my guess for most people (I have about 11,o00 songs in my library and am over 100GB so I figure double it and it's about double the size, but remember my music isn't all high-bitrate).

Quote:
That's $5 more then Amazon as their going for a buck a gigabyte. Plus they have an unlimited space for music files if you have the storage plan of at least 20 gigabytes for $20.


I currently store my music on Amazon servers (and Rackspace servers). They offer unlimited music if you purchased it from them (just like the iTunes offering, anything you buy through iTunes doesn't count against your storage limits) and then subsequently charge more for storage than Amazon would.

I'm probably going to use both, because $25 per year is nothing compared to what I'd pay anywhere else, but I still want my music backed up on servers I can access in more ways than iTunes Match allows, but it really is true that they are much cheaper (like, by an order of magnitude) than the others. Anyway, no need to take my word for it, I'm just recommending it as it's a fantastic deal for those with large digital libraries for several reasons (price being just one of them). It's a big step forward for media in the cloud, and I'm rooting for it as it looks like the first usable solution (I can't tell you how inconvenient it has been to keep my music in the cloud all these years).
tsarstepan
 
  1  
Reply Thu 13 Oct, 2011 08:38 pm
@Robert Gentel,
Right now I can use the Amazon cloud player at work. I wonder if my admins have blocked iTunes and their version?
Robert Gentel
 
  1  
Reply Thu 13 Oct, 2011 08:43 pm
@tsarstepan,
That's one big downside of the iTunes version, it only works on iTunes and their mobile OS. So there's no web version at all and if you don't use iTunes it's useless.

Google and Amazon will likely have platforms that work in more ways, but the matching instead of uploading is a big deal for convenience (it literally takes weeks to upload my collection, the matching just samples a signature and then matches it to a high-quality file from iTunes and gives me that on the server, so it could do a library in minutes).

Note that the service isn't yet available, so you can't go try it out now, I think it will launch in the next few weeks. Anyway, if you use iTunes it's worth a try, if you don't then it will be pretty much useless to you and Google and Amazon's offerings are looking to shape up as the next big contenders.
0 Replies
 
hawkeye10
 
  1  
Reply Thu 13 Oct, 2011 11:01 pm
In the news today I see that Hulu is off the market. They claim that they cant get their price. The might indicate that there is uncertainty over the all you can eat streaming business model, but I have not seen any analysis that claims this yet...
DrewDad
 
  1  
Reply Fri 14 Oct, 2011 06:38 am
@hawkeye10,
http://www.techdirt.com/articles/20111013/16503616343/hulus-owners-unable-to-find-idiots-willing-to-overpay-to-take-hulu-off-their-hands-before-they-kill-it.shtml

Quote:
We recently noted that the attempt by Hulu's owners to sell Hulu wasn't going well, mainly because those same owners had made it clear that they hoped to kill Hulu, by limiting how much it could compete with their lucrative legacy business of cable TV. No one was willing to offer more than $2 billion -- significantly less than what Hulu's owners wanted -- other than Google. But Google would only do it if the TV companies agreed to certain conditions (i.e., not killing off Hulu by limiting content, requiring a paywall, etc.)

So it comes as little surprise that Hulu has now announced that its owners are no longer trying to sell the company off. Instead, they'll focus on suffocating it from within. Well, that part wasn't mentioned, but watch what happens to Hulu execs over the next few months. I think it's likely that we're going to start seeing some departures of key people. Hulu was an amazingly well executed offering with a really capable team... but as we predicted, the fact that the only way it could really succeed was to cannibalize the business of its owners, almost certainly meant that Hulu would never be allowed to execute on the strategy it needed to become a massive player.

Of course, what the big TV companies still fail to recognize is that killing off Hulu doesn't stop the move to an a la cart, online driven world. It just means that when it comes, they will be even less relevant, and less able to capitalize on it.
0 Replies
 
ehBeth
 
  2  
Reply Sat 15 Oct, 2011 10:51 am
Quote:
After DVDs
The meaning of Netflix’s stumbling summer.


http://nymag.com/news/intelligencer/netflix-2011-10/

Quote:
The company has already sent out e-mail mea culpas for its Summer of Flub, but it still has 24 million subscribers who need coddling. To mend fences, Netflix might start by asking its customers what they want. Because in this case, that’s probably a better plan than telling them.


in other words, time to try marketing instead of sales
tsarstepan
 
  1  
Reply Sat 15 Oct, 2011 11:01 am
@ehBeth,
Very good news (in theory until they actually follow through with these threats of making right with us loyal customers). Thanks ehbeth for the story link.
0 Replies
 
DrewDad
 
  1  
Reply Sat 15 Oct, 2011 11:01 am
@ehBeth,
I liked this bit:

Quote:
though the industry may have decided that DVDs are the past and streaming is the future, for all but the most tech-forward consumers, it’s wrong. DVDs are the present, and streaming is the future. You may think they’re ready for history’s dustbin, but your mom doesn’t. Turns out she’s a Netflix customer too.
DrewDad
 
  2  
Reply Sat 15 Oct, 2011 11:03 am
@DrewDad,
DrewDad wrote:

I liked this bit:

Quote:
though the industry may have decided that DVDs are the past and streaming is the future, for all but the most tech-forward consumers, it’s wrong. DVDs are the present, and streaming is the future. You may think they’re ready for history’s dustbin, but your mom doesn’t. Turns out she’s a Netflix customer too.



If you ignore the future, and only concentrate on what you're selling now, you could be out of business in a few years.

If you only concentrate on the future, and ignore what you're selling now, you could be out of business in a few months.
0 Replies
 
hawkeye10
 
  1  
Reply Mon 24 Oct, 2011 03:10 pm
Quote:
(Reuters) - Netflix Inc warned of continued steep declines in DVD subscribers this quarter and said a costly expansion into Britain and Ireland would push it into the red in the first quarter, walloping its shares.

The top video rental company reported a better-than-expected 49 percent surge in third-quarter revenue to $822 million, surpassing Wall Street's target of about $812 million.

But investors -- mindful of how the company led by CEO Reed Hastings had driven away customers in recent months and damaged its credibility with an unpopular price hike and other high-profile stumbles -- focused on the fourth-quarter warning.

Netflix shares plummeted almost 20 percent to $95.50 in after-hours trading.

"We expect the costs of our entry into the UK and Ireland will push us to be unprofitable on a global basis; that is, domestic profits will not be large enough to both cover international investments and pay for global G&A and technology and development," Hastings said in a letter to shareholders accompanying its quarterly report.

Hastings added that subscriber defections because of the price-hike should slow in coming quarters "as the price effect washes through".

The company reported earnings per share of $1.16 on net income of $62 million. Analysts had expected earnings per share of 94 cents, according to Thomson Reuters I/B/E/S. But it was not immediately clear if those earnings numbers were comparable

http://finance.yahoo.com/news/Netflix-revenue-rises-in-rb-1091739202.html;_ylt=Atma5VdGEuf7mK0qmYx24kW7YWsA;_ylu=X3oDMTE1cTQzcXNuBHBvcwMzBHNlYwN0b3BTdG9yaWVzBHNsawNuZXRmbGl4c2hhcmU-?x=0&sec=topStories&pos=main&asset=&ccode=

After hours currently has NFLX down 27% at 86.50
hawkeye10
 
  1  
Reply Tue 25 Oct, 2011 08:37 am
@hawkeye10,
NFLIX is currently down 36%....I think management bungling has reached a watershed moment.
 

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