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Verizon Needs to Bring More than a Knife to the OTT Gunfight
Late yesterday Reuters reported that Verizon is looking at launching an online-only subscription service for streaming movies and TV shows outside its geographical footprint. While
such a move initially seems disruptive to incumbents like Netflix and others, the folks at Verizon better remember the old adage about not bringing a knife to a gunfight; if they really want to compete, significant investments in content and promotions are going to be required. Even then, it's not yet clear to me how Verizon succeeds in this highly competitive space.
Categories: Aggregators, Telcos
Topics: Amazon, CBS, EPIX, HBO, Netflix, Starz, Time Warner, UltraViolet, Verizon, VUDU, YouTube
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YouTube's Redesign: The Long-Term Siege on Pay-TV Begins
Yesterday YouTube launched its most significant redesign yet, with a strong emphasis on channelizing the site, deeply personalizing the experience, and integrating social interaction throughout. As the introductory blog post says, the redesign is all about helping users "discover a broader range of entertainment on YouTube." And though YouTube would never admit it, I think the redesign marks the start of a long-term siege on the traditional pay-TV model. YouTube is squarely focused on would-be cord-cutters and especially the younger generation of "cord-nevers" for whom the web has already become a bona fide alternative to expensive pay-TV services.
Categories: Aggregators, Cable Networks, Cable TV Operators, Satellite, Telcos
Topics: YouTube
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With New Disney Deal, Is YouTube Poised to Disrupt Online Movie Rentals?
Last Wednesday, just before the Thanksgiving break, YouTube announced a deal with Walt Disney Studios which will make hundreds of new and classic
movies from Disney, Pixar and DreamWorks available for rental. The Disney deal adds to the online movie rentals (or "iVOD" as this category is also known) initiative YouTube announced last May. Between the breadth of movies soon to be available, its aggressive pricing - including $.99 rentals on recently-released blockbusters, its integration in numerous connected devices and of course, its status as the online video market's 800-pound gorilla, YouTube may just have what it takes to disrupt the iVOD market, impacting the broader Hollywood and movie distribution industries.
Categories: Aggregators, FIlms, Studios, Video On Demand
Topics: Amazon, Apple, Disney, iTunes, Netflix, YouTube
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Netflix Raises $200 Million From TCV, Board Member's Investment Firm
Talk about keeping it all in the family: Netflix's newly issued $200 million convertible debt (part of a $400 million financing announced yesterday) was bought by Technology Crossover Ventures, an investment firm that was
co-founded by Netflix board of directors member Jay Hoag, and where Netflix's former CFO Barry McCarthy is now a venture partner. There's nothing untoward about the move and TCV is a long-time Netflix investor. In fact, given the pair's intimate understanding of Netflix's operations, the move could actually be interpreted as a real vote of confidence in the company's future. Or, on the other hand, it could be seen as a sort of hard-luck loan as the company struggles to regain its footing in the wake of massive recent missteps and aggressive expansion plans.
Categories: Aggregators, Deals & Financings
Topics: Netflix, Technology Crossover Ventures
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VideoNuze Report Podcast #110 - OTT Distributors' Strategies
Daisy Whitney and I are pleased to present the 110th edition of the VideoNuze Report podcast, for Nov. 4, 2011. This week, Daisy and I discuss major over-the-top (OTT) distributors' content strategies and how these companies are each trying to position themselves in the market. As I wrote earlier this week, while Netflix has recently gained a lot of attention, Hulu, Amazon, YouTube and others have been plenty busy as well. Listen in to learn more!
Click here to listen to the podcast (15 minutes, 5 seconds)
Click here for previous podcasts
The VideoNuze Report is available in iTunes...subscribe today!Categories: Aggregators, Podcasts
Topics: Podcast
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With Recent Deals, OTT Distributors' Content Strategies Are Crystallizing
Amid the drama and headlines surrounding OTT distributors (e.g. Netflix price increases and Qwikster decision, on-again/off-again Hulu sale, etc.), these companies' content strategies actually seem to be crystallizing, with each trying to stake out a somewhat distinct value proposition for their users. True, there is still plenty of blurriness between them, and each appears reluctant to be pigeon-holed, but recent deals suggest how each OTT distributor is positioning itself.
Below is a summary of the content strategies of most of the major OTT distributors (Netflix, Hulu, Amazon, YouTube, Walmart/VUDU, iTunes and Blockbuster) with a catchphrase that best describes their approach:
Categories: Aggregators
Topics: Amazon, Blockbuster, Hulu, iTunes, Netflix, VUDU, YouTube
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VideoNuze Report Podcast #109 - Netflix Q3 Results - Oct. 28, 2011
Daisy Whitney and I are pleased to present the 109th edition of the VideoNuze Report podcast, for Oct. 28, 2011.
In this week's podcast, Daisy and I discuss Netflix's Q3 '11 results which it reported earlier this week. There's been a lot of coverage of Netflix's 800K subscriber loss in the U.S. in Q3, plus its dismal Q4 forecast, and we try to get behind the numbers to assess what they mean and where Netflix goes from here. Listen in to learn more!
Click here to listen to the podcast (16 minutes, 33 seconds)
Click here for previous podcasts
The VideoNuze Report is available in iTunes...subscribe today!Categories: Aggregators, Podcasts
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Netflix Dodges Qwikster's Bullet in Q3, But Pricing Changes to Kill Q4 Results
Netflix's Q3 earnings are in, with the company reporting it lost just over 800K U.S. subscribers to end the quarter at approximately 23.8 million subscribers. Although it's a dreadful performance compared with Q3 '10 when it gained 1.8 million subscribers, the reality is it could have been much, much worse. As I wrote earlier today, Netflix had lowered its Q3 U.S. target by 1 million to 24 million, on September 15th. But the Qwikster split-off was only announced 3 days later, unleashing a fury of negative sentiment. The big question was just how that sentiment would translate into subscriber losses. The answer turns out to be "just" another 200K vs. the reforecast.
Categories: Aggregators
Topics: Netflix
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What To Look For In Netflix's Q3 Results Later Today
After the market closes today Netflix will release its highly anticipated Q3 results, which will lay bare the full consequences of the company's decision to raise its rates, spin off the DVD operation as Qwikster, and then reverse itself, all of which happened during the chaotic quarter. The key thing to look at is how all of this affected U.S. subscribers - how many new ones were acquired during the quarter, how many churned out and of course what the ending total is. After all the ink that's been spilled speculating on management's decision-making, these metrics - plus its Q4 guidance - will reveal just how severe the impact of all these decisions really was.
Categories: Aggregators
Topics: Netflix
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As Viacom-Google Appeal Begins, Question Remains Why Can't They Make a Deal?
Remember Viacom's $1 billion copyright infringement suit against YouTube initiated 4 1/2 years ago, which was decided in Google's favor last June? Well, it's alive and well, and this morning the parties will appear for short oral arguments in the U.S. Court of Appeals for the Second Circuit in New York, as Viacom begins its appeal of the decision. Of course Viacom has every right to keep pursuing the matter, but what I've wondered about from the beginning of this case is why haven't the parties been able to make a mutually beneficial business deal so that they can put the litigation aside. As the online video market has matured over the past 4 1/2 years, with the potential dollars up for grabs growing, it's become an even bigger mystery to me.
Categories: Aggregators, Cable Networks
Topics: Google, Viacom, YouTube
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No Surprise, No Deal for Hulu. Here's What Changed.
Last evening, Hulu's owners announced in a short statement that the company will not be sold after all. The news came as no surprise to me. VideoNuze readers will recall that back on June 22, when the first rumors of Hulu potentially being up for sale surfaced, I posted, "Here's Why Any Deal for Hulu is Unlikely."
In that post I explained how Hulu's primary asset - next-day distribution rights to ABC/Fox/NBC programs - would be at the heart of its valuation. The
big challenge with selling Hulu was that its owners would have to pass these rights (albeit likely reformulated) to an unaffiliated and uncontrollable 3rd-party, at the same time as online video delivery has injected massive uncertainty into their businesses. This issue, rather than lower-than-expected bids as some have tritely suggested, is why Hulu's owners ultimately decided to pull Hulu off the block.
Though this was always the central issue in any Hulu deal, I believe 3 things happened in the past 4 months that crystallized the importance for Hulu's owners of maintaining full control of their distribution rights:
Categories: Aggregators, Deals & Financings
Topics: Comcast, Disney, Hulu, News Corp.
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Netflix Stock Hits 52-Week Low Amid Fear of a Potential Q3 Subscriber Debacle
If Netflix investors were hoping that the company's decision to scrap its Qwikster spin-off might re-energize its beaten-down stock, then they'resorely disappointed as it instead hit a new 52-week low today of $111.62, down nearly 5%, even as the Dow Jones rallied by 330 points. On the positive side, the DVD reversal shows Netflix management was willing to be flexible, but on the other hand, the quick change unnerves investors looking for a steady hand on the tiller.
Mostly though, the number 1 question now is why did management abruptly change course and dump Qwikster overboard?
Categories: Aggregators
Topics: Netflix
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Netflix (Partially) Comes to Its Senses, Drops Qwikster DVD Plan
Whew. Sanity has (partially) returned to Netflix as the company has announced that it won't pursue a colossally misguided plan to split off its DVDoperations as "Qwikster" after all. A blog post from CEO Reed Hastings begins "It is clear that for many of our members two websites would make things more difficult, so we are going to keep Netflix as one place to go for streaming and DVDs."
While this is certainly true, what the post leaves unsaid - but which is even more fundamental to Netflix - is that DVDs remain absolutely essential to the company's success and will for some time to come. By not fully embracing this, the company seems to be ignoring reality. No doubt this led to the Qwikster move in the first place, and now also raises the risk of additional missteps down the road.
Categories: Aggregators
Topics: Netflix
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Exclusive: More Netflix Subscribers Still Use DVDs Than Streaming for TV Viewing
Streaming may be the future, but for the present, more Netflix subscribers age 13-54 still use DVDs and Blu-ray discs to watch TV shows and movies on their televisions, according to a new research report that Knowledge Networks will release later this morning. As the chart below shows, among those surveyed, 29% said they use DVDs and Blu-ray to watch Netflix content at least once per month on their TVs, while 20% said they use streaming to watch on their TVs.
For Netflix users the TV is still the primary viewing screen; 44% of those saying they use Netflix at least once a month use their TVs to watch, with 30% using a computer and 11% using a mobile device. Even among those using a computer, DVD usage is holding up pretty well, with 9% of respondents who watch Netflix at least once per month saying they use DVD, and 15% using streaming. This data, along with other results in the research, raises further questions about whether Netflix acted prematurely in deciding to split off its DVD operations to focus on streaming, a point I have made previously.
Categories: Aggregators
Topics: Knowledge Networks, Netflix
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Amazon Kicks Off Its Kindle Tablet Week With Fox Deal
Amazon has announced a new licensing deal with Fox that will bring "24," "Arrested Development," "The X-Files," "Ally McBeal," "Buffy the Vampire
Slayer" and "The Wonder Years" to its $79/year Amazon Prime service (all of the titles except the latter are already available on Netflix streaming). The Fox deal comes just ahead of a press conference Amazon will hold this Wednesday, in which it is widely believed to unveil a new color Kindle Tablet that will play video and compete head-on with the iPad.
Categories: Aggregators, Broadcasters
Topics: Amazon, Kindle, Netflix
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DreamWorks Gives Netflix A Much-Needed Lift, But Not Until 2013
DreamWorks Animation's new output deal with Netflix gives the beleaguered streaming-only provider a much-needed lift, but unfortunately not until
DreamWorks' 2013 movies are released. Under the deal, Netflix may pay up to $30 million per movie, an increase from the $20 million that HBO is believed to have been paying DreamWorks. The press release also notes that some of DreamWorks' catalog movies such as "Kung Fu Panda," "Madagascar 2," "Chicken Run" and "Antz" will also be included over time. The DreamWorks deal comes on the heels of last week's news that Netflix licensed library programs from Discovery Communications.
Categories: Aggregators, Studios
Topics: DreamWorks Animation, HBO, Netflix
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New Blockbuster Movie Pass Features DVDs in Starring Role
Irony was on full display at the Dish Network press conference announcing the new Blockbuster Movie Pass, as the very first benefit CEO Joe Clayton pointed to was access to 100K+ DVDs by mail (with no extra charge for Blu-ray). That's right - despite Netflix's willingness to practically blow up the company in its belief that "streaming is the future," good old Blockbuster is returning to its roots, emphasizing physical media's primacy, at least for now. That Blockbuster was outgunned by Netflix's own superior DVD-by-mail service years ago just adds to the sense that "all that's old is new again."
Categories: Aggregators
Topics: Blockbuster Movie Pass, DISH Network, Netflix
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Netflix Now Conceding Price Hike Is Also Hurting Q3 New Subscriber Acquisitions
Just when you thought things couldn't get worse for Netflix, here's a tidbit of information that could have significant consequences for the company: in aQ&A session at the Goldman Sachs Communacopia conference on Wednesday (replay here), CFO David Wells conceded that while cancellations due to the price increase announced in July accounted for most of the 1 million downward revision in end of quarter subscribers, the change has also adversely impacted new subscriber acquisitions (though he declined to quantify by how much). I believe this is the first time a Netflix executive has acknowledged a double whammy resulting from the price increase - both higher than expected churn and a slowdown in additions.
Categories: Aggregators
Topics: Netflix
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Winners and Losers Due to Netflix's Decision to Split DVDs
Netflix's bizarre decision to separate its DVD business from its streaming business will have significant ramifications for the video ecosystem. Below are some of the clear winners, potential winners and clear losers.
Categories: Aggregators
Topics: Amazon, Apple, Blockbuster, DISH, Facebook, Google, Hulu, Netflix, Redbox, VUDU, YouTube
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Netflix's DVD Split Is Yet Another Self-Inflicted Wound
How many self-inflicted wounds can a company take before its mortality is threatened? When it comes to Netflix, the question is taking on increasingrelevance. The company that could do no wrong for the past two years first shot itself by announcing an onerous price increase without any real attempt to explain itself or soften the blow. The initial consequences of that decision came last week in the form of a 1 million subscriber downward revision and a 50 point drop in its stock price. Now Netflix has followed up with another bewildering move, announcing a re-branding and separation of its DVD by mail business as "Qwikster" complete with an independent web site. In my view this is another self-inflicted wound with even more serious implications.
Categories: Aggregators
Topics: Netflix
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