Posts for 'Netflix'

In watching the press conference with Netflix’s CEO Reed Hastings and Chief Content Officer Ted Sarandos that followed the company’s CES announcement yesterday that it was expanding to 130 additional countries, the most significant thing that struck me is that Netflix is pursuing the biggest-ever experiment in content globalization. Depending on the results, there will be profound implications for all players in the video value chain.

First, it’s important to clearly understand Netflix’s content globalization initiative. In the press conference, Hastings and Sarandos emphasized that the company’s focus is on investing in original content and retaining global distribution rights (this is a big departure from the “House of Cards” strategy where co-investors got the global rights in order for Netflix to mitigate its financial exposure).

continue reading

I'm pleased to present the 302nd edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

Earlier this week I wrote bullishly about Amazon’s new “Streaming Partners Program,” (SPP), which could disrupt the SVOD industry. I emphasized the word “could” because, as with everything in life, execution is everything.

In that post, I noted that SPP on Amazon’s web site was already implemented well, but that the iPhone app experience didn’t work. In today’s podcast, Colin shares his experiences on both Android and Fire TV, which are shockingly incomplete.

It’s very surprising to see Amazon, which is typically an execution machine, come up so short here, and it suggests they rushed SPP to market before being 100% ready.

Implementation issues aside, we discuss the overall merits of SPP and Colin’s view that Netflix is actually better positioned for an SPP-like role in SVOD. I still like Amazon’s SPP strategy a lot and will keep an eye on how things unfold.

Listen now to learn more!

Click here to listen to the podcast (22 minutes, 33  seconds)

Click here for previous podcasts

Click here to add the podcast feed to your RSS reader.

The VideoNuze podcast is also available in iTunes...subscribe today!

Amazon made a very significant announcement this morning, unveiling its “Streaming Partners Program,” which I believe could disrupt the entire SVOD industry if executed well. There are many ramifications of the Streaming Partners Program (which has been rumored, and I’ll call “SPP” for short) that I’ll explain below, albeit based on still limited information.

First, what is SPP? From an SVOD provider’s perspective, it’s an opportunity to have Amazon promote the SVOD service to tens of millions of Prime subscribers, with special pricing and promotions. Amazon handles subscriber acquisition, customer service, billing, credit card management, video streaming and device compatibility. Basically it frees up SVOD providers to focus on what they do best - create great content. Amazon announced that Showtime, Starz and 18 other SVOD providers are initial SPP partners.

continue reading

Sandvine has released its December, 2015 Global Internet Phenomena report, revealing that video and audio traffic now accounts for 70.4% of North American downstream traffic on wired networks in peak period. Sandvine said that 5 years ago, video and audio accounted for less than 35% of peak period traffic.

Netflix has become even more dominant in the past year, now with 37.1% of downstream traffic, up from 34.9% that Sandvine reported in November, 2014. Among other popular services, YouTube was in second place with 17.9% share (up from 14% share in Nov. ’14), Amazon Video was fourth (3.1% share, up from 2.6% in Nov. ’14), iTunes was fifth (2.8% share, flat from Nov. ’14), Hulu was sixth (2.6%, up from 1.4% in Nov. ’14) and Facebook seventh (2.5%, down from 3% in Nov. 14).

continue reading on VideoNuze iQ

I'm pleased to present the 294th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

Netflix reported its Q3 2015 earnings this week with overall subscriber growth pretty much in line with the company’s forecast. However, net U.S subscriber additions came in at 880K, which was 270K short of the 1.15 million forecast for Q3 this past July in the company’s Q2 earnings report.

It was the weakest Q3 U.S. subscriber growth since 2011, and continued a downward trend over the past 3 years (1.29 million in Q3 ’13, 980K in Q3 ’14). Netflix said gross subscriber additions in the U.S. were actually up year-over-year in Q3 ’15, and that the shortfall was due to “involuntary churn” caused by credit card companies issuing new chip-enabled cards with new account numbers which in turn caused a disruption in recurring billing.

While we have no reason to doubt the veracity of Netflix’s explanation, many analysts, including Colin and me, find it very murky. Credit card companies have pushed back on the rationale, and other recurring merchants have said they haven’t seen any similar problems. We share our concerns and raise the possibility that Netflix may be reaching the saturation point in the U.S. with slower growth ahead (Q4 results will go a long way to addressing this).

Listen now to learn more!

Click here to listen to the podcast (21 minutes, 59 seconds)

Click here for previous podcasts 

Click here to add the podcast feed to your RSS reader.

The VideoNuze podcast is also available in iTunes...subscribe today!

I’m posting this week’s VideoNuze podcast a day early as the first segment focuses on the new Apple TV, which was introduced yesterday.

Colin and I both see the new Apple TV as solid, but not spectacular. In many ways, it’s just catching up to what other devices have been offering: voice search, search across apps and gaming capabilities. The latter could ultimately be Apple TV’s big differentiator if Apple’s legion of developers take advantage of the new “tvOS” operating system SDK to create breakthrough new gaming experiences. We were both intrigued by the new remote with swipe capability, as well.

We then turn our attention to Netflix’s anti-downloading stance, which I dug into yesterday. I find it both perplexing and frustrating, with the company’s explanation not adding up. Colin isn’t initially as convinced as I am that downloading is a killer app, though with a 10-hour flight to Amsterdam today, he’s beginning to realize how much value it would have.
 
Listen in to learn more!

Click here for previous podcasts

Click here to add the podcast feed to your RSS reader.

The VideoNuze podcast is also available in iTunes...subscribe today!

It’s been 4 years since Netflix’s “Qwikster” fiasco, in which the company infamously tried to separate its DVD business, eliciting emphatic objections from its subscribers. Netflix offered implausible explanations for its move and ultimately reversed itself. Since then the company has executed flawlessly, expanding its content, extending its international footprint, watching its stock price soar and most importantly, winning back the love of its subscribers.

Thus it is perplexing and frustrating to see Netflix oppose the idea of enabling its content to be downloaded for offline viewing, as an augment to streaming it. Reminiscent of Qwikster, Netflix is offering up bizarre and non-sensical explanations for opposing the download feature that it readily admits its subscribers are hungry for. Further, with Amazon’s expansion of Prime Video downloading to iOS and Android devices last week, it also appears to be a new competitive lever among SVOD providers.

continue reading

Yesterday pay-TV network EPIX announced a multi-year distribution deal with Hulu that will kick in on October 1st, as EPIX’s current deal with Netflix phases out.

Perhaps most noteworthy here is that in the current Wild West environment where everyone and their brother are launching standalone SVOD services, EPIX has remained disciplined in choosing to instead team up with a large SVOD player (EPIX has a separate SVOD deal with Amazon dating to 2012 as well).

continue reading

When Sesame Workshop announced its deal with HBO last week, everyone seemed to have an opinion about whether another “poor door” had been created, this time for Elmo and his iconic friends.

It’s an interesting societal debate, but what was more intriguing to me was that Sesame’s deal with HBO signaled that its own SVOD efforts had not delivered material results (and with the new HBO deal, I’d guess will likely be phased out at some point). That in turn reinforced my belief that the niche SVOD model is extremely difficult given the rise of “super” SVOD services like Netflix, Amazon and Hulu.

continue reading

There’s been a lot written in the past few days about Comcast’s reported plan to introduce a new platform called “Watchable,” that will curate short-form online video content from various providers for viewing on its X1 set-top boxes and eventually on mobile devices. The initiative is seen as helping Comcast increase its appeal to millennial viewers and drive additional online video advertising revenue.

On the one hand, I applaud the company’s desire to dive more deeply into online video, which has many synergies with Comcast’s broadband and TV businesses. Without knowing any of the details, the biggest issue to me with Watchable is that it’s hard to understand why Comcast would prioritize it as a current initiative when a far more significant opportunity would be integrating popular OTT services into X1, which would have huge subscriber acquisition and retention benefits.

continue reading

I'm pleased to present the 285th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

It’s been a wild week for major media companies as mixed earnings reports, fears that cord-cutting is accelerating and anxiety over ad dollars leaving TV all combined to send big media stocks plummeting. Meanwhile, with Netflix expanding internationally, Hulu and Amazon gaining ground and many other SVOD services launching in 2015, the question of what role SVOD will play for consumers and in the media ecosystem of the future is becoming more relevant all the time.

Those are the topics of today’s podcast, as we start by analyzing recent Parks research (which both Colin and I wrote about, here and here) revealing high levels of churn for various SVOD services. Colin is less concerned about high churn than I am, as I see high churn as indicative of a broader challenge SVOD services have with consumers, namely, not being seen more as transactional opportunities, given how frictionless it is to add/drop these services.

Colin and I agree that great content is going to be the key to SVOD services retaining subscribers. But with more people walking around with binge-viewing bucket lists, I think it’s going to be harder than ever to hook viewers on shows they didn’t have an interest in already, especially given the proliferation of great content. We explore these dynamics further.

Listen in to learn more!

Click here for previous podcasts

Click here to add the podcast feed to your RSS reader.

The VideoNuze podcast is also available in iTunes...subscribe today!

Research released late last week by Parks Associates, which revealed high levels of churn for many smaller SVOD services, reinforced for me that many of these services are at risk of being seen as little more than transactional VOD opportunities by consumers. If this occurs it would have huge implications for both the SVOD services and larger ecosystem.

First, to review the research, Parks found that for SVOD services other than Netflix, Hulu and Amazon, the churn rate over the past 12 months was equal to 60% of those who subscribed to such services. For Hulu Plus, 7% of U.S. broadband subscribers cancelled their subscription in the past 12 months (equaling churn of half or more of Hulu Plus’s subscribers). Parks estimated Amazon’s churn at around 25% (though that’s clouded by value of the overall Prime service). Only Netflix fared well, with churn in the past 12 months running around 9% of its subscriber base. Note, none of these SVOD services publicly disclose their churn rates.

continue reading on VideoNuze iQ

Verizon reported that Q2 ’15 FiOS video subscriber additions declined to just 26K in Q2 ’15, down from 100K additions in Q2 ’14 and 140K additions in Q2 ’13. In the earnings call, Verizon CFO Fran Shammo pinned the blame for the declines on “triple play offer changes at a time of increased competitive intensity” before saying that its new Custom TV packages are now accounting for a third of all new video subscribers.

Verizon is the first big pay-TV operator to share its results and a key question is whether its weak quarter is an early indicator of an accelerating industry slowdown. Last week, in discussing Netflix’s breakout Q2 ’15 results in the U.S. (in which it added 900K subscribers vs. a range of 530K-630K additions in each of the prior second quarters), I asserted that Netflix’s gain could finally be coming at pay-TV’s expense, particularly among younger cord-nevers.

continue reading

I'm pleased to present the 282nd edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

This week we dig into Netflix’s Q2 ’15 results. As I wrote yesterday, the big number for me was the 900K subscriber additions in the U.S., breaking out of the narrow 530K-630K range over the past 3 years. If pay-TV video subscriber additions are soft for Q2 when reported over the next few weeks, then it will suggest accelerated cord-cutting and cord-nevering.

Colin also explores Netflix’s big international gains, its emerging movie strategy and its endorsement of the Charter-Time Warner Cable deal. While Netflix may well be negatively impacting the video side of the pay-TV business, we also discuss what impact it is having on the broadband side.

Listen in to learn more!

Click here for previous podcasts

Click here to add the podcast feed to your RSS reader.

The VideoNuze podcast is also available in iTunes...subscribe today!

Netflix released its Q2 ’15 earnings late yesterday, adding 3.28 million subscribers globally, almost twice as many as the 1.69 million it added in Q2 ’14. Everyone knows that Netflix has been expanding fast internationally, but what was most intriguing about the Q2 report was that Netflix added 900K subscribers in the U.S. vs. its forecast of 600K. The 900K compares with 570K U.S. adds in Q2 ’14, 630K in Q2 ’13 and 530K in Q2 ’12.

In other words, in Q2 ’15 Netflix significantly broke out of a relatively narrow growth range it had been in over the past 3 years in the seasonally-weak second quarter. The 900K add is even more noteworthy because Netflix has almost twice as many U.S. subscribers (42.3 million) now than it did 3 years ago (23.9 million). The law of large numbers suggests the bigger a company gets, the harder it is to achieve even comparable unit growth, much less greater growth.

continue reading

I'm pleased to present the 279th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

Change is everywhere in the video and TV industries and this week 6 different news items hit our radar, which Colin and I think illustrate how quickly things are moving. In today's podcast we discuss each of them and why we think they're significant.

The items include continued falling linear TV ratings as measured by Nielsen, Hulu distributing Showtime, new research showing that Netflix's audience is size larger than those of broadcast TV networks, Tennis Channel's converged TV Everywhere-OTT model, HBO premiering 2 new shows on Facebook and Ooyala's new data showing that 42% of video views are now on mobile.

(note: Colin wanted to clarify one point - when citing Netflix viewership, he said it was 10 million hours streamed per quarter when it's actually 10 billion hours)

Listen in to learn more!

Click here for previous podcasts

Click here to add the podcast feed to your RSS reader.

The VideoNuze podcast is also available in iTunes...subscribe today!

Netflix has been back under the microscope these past few days as reports (here and here) surfaced that some users were seeing pre-roll and post-roll ads promoting original programs. That immediately led to speculation that Netflix was preparing a full-on ad play that would significantly alter the viewer experience.

This in turn prompted Netflix's CEO Reed Hastings to post on Facebook, "No advertising coming onto Netflix. Period. Just adding relevant cool trailers for other Netflix content you are likely to love."

continue reading

Today Cablevision announced a first of its kind distribution deal with Hulu. The deal follows the introduction of Cablevision's new low-cost "cord-cutter" package (broadband plus a free OTA antenna) last week and its agreement to promote the new HBO Now OTT service. Given all of this I think it is now virtually guaranteed that Cablevision will soon announce that it will also distribute/promote Netflix.

continue reading

I'm pleased to present the 270th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

(Note, we recorded prior to the demise of the Comcast-Time Warner Cable deal; we'll discuss that next week.)

Early this week, in "Is Netflix Friend or Foe to the TV Industry? It's More Confusing Than Ever." I laid out both of the arguments. In today's podcast, Colin and I flesh out the debate further, bringing in additional perspectives and data. Importantly, Colin adds his thoughts on how Netflix should be seen internationally.

It's a fascinating debate, which our friends at MoffettNathanson coincidentally weighed in on this week as well. Using Nielsen data, they believe Netflix's audience size is already 6% of all of TV's, double its level from 2 years ago, and has accounted for 40% of TV's audience declines. They also see Netflix's share rising to low double digits over the next 4 years.

Listen in to learn more!

Click here for previous podcasts

Click here to add the podcast feed to your RSS reader.

The VideoNuze podcast is also available in iTunes...subscribe today!

One of the great riddles of the past few years is whether Netflix is friend or foe to the U.S. television industry, including broadcast TV networks, cable TV networks and pay-TV operators. Over the years, Netflix has downplayed in many ways its disruptive potential to the TV industry (my personal favorite is when CEO Reed Hastings would say "We're more of a bicycle to their car" in comparing Netflix to pay-TV).

But with Netflix tacking on another 2.3 million subscribers in the U.S. in Q1 '15, bringing its total to 41.4 million, the question is taking on increasing urgency. How should the TV industry REALLY think of Netflix? Below I share what I think are the best "friend" and "foe" arguments, concluding with my own assessment of what Netflix really is now.

continue reading