Posted on 11/25/2010 4:24:51 AM PST by abb
In a matter of months, the movie delivery company Netflix has gone from being the fastest-growing first-class mail customer of the United States Postal Service to the biggest source of streaming Web traffic in North America during peak evening hours.
That transformation — from a mail-order business to a technology company — is revolutionizing the way millions of people watch television, but it’s also proving to be a big headache for TV providers and movie studios, which increasingly see Netflix as a competitive threat, even as they sell Netflix their content.
The dilemma for Hollywood was neatly spelled out in a Netflix announcement Monday of a new subscription service: $7.99 a month for unlimited downloads of movies and television shows, compared with $19.99 a month for a plan that allows the subscriber to have three discs out at a time, sent through the mail, plus unlimited downloads. For studios that a few years ago were selling new DVDs for $30, that represents a huge drop in profits.
“Right now, Netflix is a distribution platform, and has very little competition, but that’s changing,” said Warren N. Lieberfarb, a consultant who played a critical role in creating the DVD while at Warner Brothers.
For the first time, the company will spend more over the holidays to stream movies than to ship DVDs in its familiar red envelopes (although it is still spending more than half a billion dollars on postage this year). And that shift coincides with an ominous development for cable companies, which long controlled home entertainment: for the first time in their history, cable television subscriptions fell in the United States in the last two quarters — a trend some attribute to the rise of Netflix, which allows consumers to bypass their cable box to stream movies and shows.
snip
(Excerpt) Read more at nytimes.com ...
"Network evening newscasts will go dark after the '08 elections and their news divisions disbanded."
Walter Abbott, (b. 1950), Media observer, blogger and commentator
ping
How is our bandwithh capacity doing? Will our DSL/Cable internet soon slow to a crawl from 6:00 to 11:00 pm?
“which allows consumers to bypass their cable box to stream movies and shows”
With the added benefit of not paying for cr*p that I dont want and I don’t support. MSNBC, CNN, NBC
A bunch of years ago there was a song with the lyric, "57 channels and nothing on"...with Netflix streaming tens of thousands of choices that isn't likely to be the case.
If cable went to an alacarte format you might at least have channels you want, but as it is, when you subscribe to cable you're paying for foreign language programming, home shopping programming, pointless channels such as MSNBC and all the special programming that is niche related. Some will want those niche programming but not everyone wants golfing/cooking/traveling/Christian/sports/public access etc. There are people who will want one or more, but forcing everyone to buy all of them means you're paying for programming you don't want.
http://dealbook.nytimes.com/2010/11/24/harbingers-falcone-sells-down-times-co-stake/?ref=business
Harbinger’s Falcone Sells Down Stake in Times Co.
http://blogs.forbes.com/jeffbercovici/2010/11/24/ex-newsweek-editor-daily-beast-merger-was-best-bet/
Ex-Newsweek Editor: Daily Beast Merger Was ‘Best Bet’
http://www.broadcastingcable.com/article/460268-Sources_Industry_Stakeholders_Meet_At_FCC.php
Sources: Industry Stakeholders Meet At FCC
Top FCC staffers meet with industry stakeholders over network neutrality regs
http://www.jackmyers.com/commentary/jackmyers-think-tank/109906234.html
Digital Advertising is Driving Growth of Traditional Media
http://www.webpronews.com/topnews/2010/11/23/aol-gets-big-on-video
AOL Gets Big on Video
http://artsbeat.blogs.nytimes.com/2010/11/23/tonight-show-says-it-will-credit-bloggers-for-taylor-swift-montage/
‘Tonight Show’ Says It Will Credit Bloggers for Taylor Swift Montage
http://weblogs.jomc.unc.edu/talkingbiznews/?p=19911
The FT has become hostile to bloggers
http://www.ft.com/cms/s/0/f840b2f2-f419-11df-886b-00144feab49a.html#axzz16IQ25mkA
Private equity expects media asset boost
Yes...
expect that your cable/telco ISP rates will start to spike if they have to stream huge files to your home since the network is not configured to handle those types of sustained downloads
It doesn’t matter how many streaming movies you can get. If they don’t offer what you want to watch, it’s like cable.
The studios will just pull the rights to stream and people will be forced to have disks just like before.
It’s the reason why Blockbuster just announced that they will have rentals sooner than Netflix and Redbox.
We went for the extra bucks and got the one disk a month package. Anything that is near to popular is DVD only.
Content-on-demand is the future, like it or not.
I saw that announcement by Reed Hastings that Netflix is a digital streaming company now. But they will have to put PLAY next to a whole lot more movies to make that fly. I think people watch streaming movies because it is included in the mail subscription (ours was 8.99 for 1 DVD at a time, as often as desired, plus any streaming. Now it went to 9.99 for the same). But the choices of instant play are very limited, compared to what you can order on DVD. They recently added lots of old movies, from the ‘40’s and 50’s, which we really enjoy, but I don’t know how many people will want to just watch old movies.
To me, that is one of the greatest shifts in power in the history of human communication.
Think about it.
For all our lives we were force to read what was printed in the NY Times (or whatever local newspaper you read). You read what was printed in Newsweek, Time, etc. If you chose not to read, you were uninformed.
The same with television. You watched ABCCBSNBC and you watched what THEY put on, WHEN it was put on. They called it "programming" but I suggest that it was us viewers who were being programed.
Now with the interweb thingy we can pick what to read, what to watch and on our OUR timetable.
And if the news doesn't suit us, we can actually go out and do our own news reporting and publish it for the world to see/read/hear.
“... but it’s also proving to be a big headache for TV providers and movie studios, which increasingly see Netflix as a competitive threat, even as they sell Netflix their content. “
Hmmm....how about: but its also proving to be a big headache for Arabs, who increasingly see Jews as a competitive threat, even as they sell Jews their land...
...and life takes an unexpected turn. Doh!
Fot those of you that have it, I'd recommend watching The Art Of The Steal
The true story of a multi-billion dollar art heist and how they got away with it.
Personally, I think Netflix should insulate itself by carefully splitting its DVD mail operations from its streaming operations. The two have completely different business models, as well as totally different, but severe business risks.
Either side could be wiped out “overnight” by changes in the law, yet the other could likely remain untouched. And while it’s very bad to lose half your company, it is far worse to lose it all.
As far as disk rentals go, there have been a surfeit of ill advised and authoritarian copyright efforts in the past, any of which could have ruined them, but there also seems to be no end to such efforts. Added to which is the precarious situation of the Post Office, and you have a high risk business.
Conversely, live streaming is even more fraught with risk. More than anything else right now, bandwidth providers are resentful of the very high demands placed on them by streaming movies. Their argument is legitimate: why should they pay millions so that Netflix can take advantage of their system?
Net neutrality, or the lack thereof, could change everything overnight. And Netflix streaming could be effectively over.
So again, it would be a smashing good idea for Netflix to legally, if not physically, have a division.
I have no time to watch TV and movies. Nice to have so many options for something I don’t do.
Tell that to the trees in Oregon.
” I have no time to watch TV and movies. “
And yet, you find the time to post a snarky comment on a thread that you claim holds no interest for you....
I just saw that. I’m not usually a big documentary watcher but that was quite good.
This is incorrect. You cannot download anything (i.e. save it to your hard drive). You can stream only. This is an important distinction.
That’s why I have no time to watch TV and movies!
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