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post #181 of 577 Old 02-10-2009, 08:18 PM
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Great news
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post #182 of 577 Old 02-11-2009, 04:17 PM
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In a separate report this week, Consumer Reports also said there was little difference between the picture quality of video streams in high-definition versus standard definition.

"Given that immediate access to HD content will be a key selling point for many prospective customers, we wanted to know if the quality of these streaming HD shows was equivalent to what we're used to seeing from high-def TV services and Blu-ray discs," the publication wrote Feb. 9. "In a word, the answer is no."


http://www.videobusiness.com/article/CA6636914.html
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post #183 of 577 Old 02-11-2009, 09:33 PM
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Originally Posted by jvillain View Post

In a separate report this week, Consumer Reports also said there was little difference between the picture quality of video streams in high-definition versus standard definition.

"Given that immediate access to HD content will be a key selling point for many prospective customers, we wanted to know if the quality of these streaming HD shows was equivalent to what we're used to seeing from high-def TV services and Blu-ray discs," the publication wrote Feb. 9. "In a word, the answer is no."


http://www.videobusiness.com/article/CA6636914.html

I'm assuming the people surveyed didn't perceive a difference between them since we know there actually is a difference.

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post #184 of 577 Old 02-12-2009, 12:22 PM
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http://homemediamagazine.com/netflix...scribers-14568

CEO Reed Hastings attributed the surge of new subscribers to the company’s value-add Instant Watch streaming service that delivers 12,000 titles free to broadband-enabled TiVo set-top boxes, Microsoft Xbox 360, select LG and Samsung Blu-ray players, PCs and Intel-based Macs, and the Roku digital video player.
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post #185 of 577 Old 02-12-2009, 12:25 PM
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Here is growth data for Hulu and Joost

http://siteanalytics.compete.com/hul...com/?metric=uv


hulu.com 12 month growth - 1809.4%

joost.com 12 month growth - 587.0%

Monthly visitors for these VoD sites are close to 5M now.
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post #186 of 577 Old 02-12-2009, 12:28 PM
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Originally Posted by jvillain View Post

In a separate report this week, Consumer Reports also said there was little difference between the picture quality of video streams in high-definition versus standard definition.

"Given that immediate access to HD content will be a key selling point for many prospective customers, we wanted to know if the quality of these streaming HD shows was equivalent to what we're used to seeing from high-def TV services and Blu-ray discs," the publication wrote Feb. 9. "In a word, the answer is no."


http://www.videobusiness.com/article/CA6636914.html

As someone who has used Apple TV, Vudu and Hulu I can say the difference between HD and SD is quite easy to see. If these folks can't see the difference I don't see how they'll ditch cheaper DVD for Blu Ray! Perhaps they won't.
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post #187 of 577 Old 02-12-2009, 12:31 PM
 
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As someone who has used Apple TV, Vudu and Hulu I can say the difference between HD and SD is quite easy to see. If these folks can't see the difference I don't see how they'll ditch cheaper DVD for Blu Ray! Perhaps they won't.

This is just bad news for HD as a whole. There seems to be a large number of the population who either don't see a significant difference, or do not see that difference as being worth a premium.
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post #188 of 577 Old 02-12-2009, 02:37 PM
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Okay, so we hate to be blunt, but if there was one cable carrier out there just waiting to crash, it was Charter. The company famous for engaging in less-than-forthright contest practices and perpetually finding ways to perturb subscribers has just announced that a Chapter 11 filing isn't too far away.

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As expected, the company has assured subscribers that its services will continue to operate throughout the debt restructuring process, but we wouldn't expect service to get any better in the coming months.

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http://www.engadgethd.com/2009/02/12...or-bankruptcy/
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post #189 of 577 Old 02-13-2009, 06:13 PM
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I see VUDU has permanently cut their prices in half for their boxes.

http://www.engadget.com/2009/02/09/v...p-box-in-half/

This seems like a good deal, but is there any way to get one of these to work with a URC without paying $190 to get the unit with and iR adapter?

The picture makes it look like a mini=stereo connector that maybe I can connect to my URC RF-260 base station.
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post #190 of 577 Old 02-14-2009, 08:00 PM
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Originally Posted by miata View Post

This seems like a good deal, but is there any way to get one of these to work with a URC without paying $190 to get the unit with and iR adapter?

The picture makes it look like a mini=stereo connector that maybe I can connect to my URC RF-260 base station.

NIB Vudu IR Adapters often pop up on eBay for under $20. Vudu's on eBay should also be selling at bargain prices with the new box price points.

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post #191 of 577 Old 02-16-2009, 12:17 PM - Thread Starter
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Sony Ericsson Unveils Two Phones, Video Service

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Sony Ericsson on Sunday unveiled an 8 megapixel camera phone, announced the upcoming 12 megapixel camera phone model codenamed "Idou" and an unlimited movie download service for mobile phones.

The company anounced its new strategy focused on services and entertainment. Called "Entertainment Unlimited," the strategy fuses "communication and entertainment." Although the company did not provide many details, this strategy is expected to bring together cell phones with PCs and the TV to share entertainment content.

As part of this strategy, the company announced Media Go, which is an extension of its PlayNow Music service. Media Go adds a service that lets users download movies onto their PC and then transfer them over to a Sony Ericsson device. The service will also allow the transfer of other media, such as music, photos, and podcasts. The service will also allow users to sync their phone's music library automatically, subscribe to podcasts, and auto-convert files for the best quality playback. Media Go will also allow users to burn their CDs and bring their music and audio books with them.

"Entertainment Unlimited lets us reinforce our position as THE communication entertainment brand," said Lennard Hoornik Head of Global Marketing and Vice President at Sony Ericsson. "Everything that we have done to date has brought us to this point - we created the music phone category in 2005 selling over 100 million Walkman phones and we are now ready to unveil the next chapter in the evolution of the company - Entertainment Unlimited - giving consumers unlimited opportunities to share their entertainment experiences."

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post #192 of 577 Old 02-18-2009, 12:44 PM
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This is just bad news for HD as a whole. There seems to be a large number of the population who either don't see a significant difference, or do not see that difference as being worth a premium.

I'd say it is bad news for streaming HD. Paragraph 1 seems to say it's not that much better than SD, while the 2nd paragraph seems to indicate that there is a big difference between streaming HD and OTA/Blu-Ray PQ. Or else they contradict each other.
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post #193 of 577 Old 02-18-2009, 03:08 PM
 
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I'd say it is bad news for streaming HD. Paragraph 1 seems to say it's not that much better than SD, while the 2nd paragraph seems to indicate that there is a big difference between streaming HD and OTA/Blu-Ray PQ. Or else they contradict each other.

In this report, yes... but there seems to be a larger consumer trend that indicates that not everyone values and/or understands HD as much as the AVS community.

It would be ideal if people were more able to see the difference between streaming SD and HD as it could help spur HD growth overall. I would hate to think that the large number of people using Netflix on Demand are not seeing the benefit of HD. Or that top tier services like HDX (from Vudu) go to the wayside because of consumer apathy.

We already know that Blu-ray hardware will peak in 4 years, and streaming/VOD will start to gain more and more marketshare. I would like for that market to have a healthy supply of HD content.


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Combined, 38% of HD owners say that replacing an old/broken set or wanting to buy a new TV set was the most important reason for getting their HDTV - compared to 22% citing picture quality, and 7% the quality of HD programming or the number of HD channels

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LRG estimates that about 58% of all HD households are now watching HD programming from a multi-channel video provider - up from 53% last year. However, about 18% of individuals with an HDTV continue think that they are watching HD programming, but are not.


http://www.leichtmanresearch.com/pre...08release.html
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post #194 of 577 Old 02-18-2009, 04:10 PM
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NIB Vudu IR Adapters often pop up on eBay for under $20. Vudu's on eBay should also be selling at bargain prices with the new box price points.

I picked up one off Ebay for one of my VUDUs last month for $17.50 plus shipping. The first IR adapter I got last year through VUDU for the retail price.

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post #195 of 577 Old 02-18-2009, 04:47 PM - Thread Starter
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Netflix Chief Sees Streaming-Only Pricing by 2010

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Feb. 18 (Bloomberg) -- Netflix Inc. may allow customers to pay solely for online-video streaming by late this year or 2010 as more viewers watch content directly from the Internet, Chief Executive Officer Reed Hastings said.

The largest U.S. mail-order movie service has “millions” of its more than 10 million subscribers watching video online, and is investing more this year to expand its library available on the Internet. Netflix has more than 12,000 titles for immediate viewing, compared with 100,000 for DVD-by-mail.

Currently, customers pay a fixed amount to have access to both DVDs and “streaming” movies, which begin when the customer presses play on the movie’s image on the Netflix Web site.

The company’s success hinges on its ability to transition to online video from DVDs, Hastings said yesterday in an interview in San Francisco. Netflix faces a challenge similar to the one AOL had as it lost subscribers who shifted from Internet service via a telephone connection to high-speed access, he said.

“Most companies that are in our shoes fail,” Hastings said. “Most companies that have a sort of generational evolution forward, like AOL from dial-up to broadband, fail. And it’s catastrophic for investors.”

Shareholders may be pricing doubts about Los Gatos, California-based Netflix’s ability to bridge the gap from DVDs to online video into the stock, Hastings said.

“A reasonable discount for that is not inappropriate at all,” he said. “In the last year, we picked up some momentum on, ‘Hey, maybe Netflix is going to make it.’”
...
Netflix is aiming to broaden its online-video streaming to televisions from computers through media including Microsoft Corp.’s Xbox 360 video-game console and a service from TiVo Inc. One million Xbox 360 users have downloaded Netflix software, Hastings said yesterday in an interview with Bloomberg Television.

The company has added more than 600,000 subscribers since the beginning of the year, as cash-strapped U.S. consumers sought inexpensive entertainment. Subscriptions start at $4.99 a month for a plan allowing customers to rent one disc at a time, while the average price for a movie ticket in the U.S. was $7.20 last year, up 4.7 percent from 2007, according to researcher Media By Numbers LLC.

Hastings declined to specify how much the streaming-only plan would cost.

‘The Best of Both’

“Right now, the power of the service is that hybrid message, the best of both,” he said, referring to customers’ ability both to watch online video and to order DVDs under a single plan. “So we’re putting most of our wood behind that. But we recognize at some point in the long term, the streaming will be good enough that an appreciable number of people will find streaming is all they need.”

Netflix needs to increase subscribers so it can spend more to expand its library of titles for online streaming, Hastings said. That involves drawing in more customers renting DVDs by mail, improving the online-streaming technology for computers and getting its software embedded in consumer devices, he said.

Netflix is seeking to make licensing deals with channels like Time Warner Inc.’s HBO and CBS Corp.’s Showtime, Hastings said. Last year, the company began distributing content from Liberty Media Corp.’s Starz Play subscription movie service.

“We’re distributing Starz Play essentially like cable does, except it’s through our user interface and it’s all on demand,” he said. Netflix also streams TV content.

The company will add a record number of subscribers this quarter after doing so last period, Hastings said. Netflix gained 718,000 customers in the fourth quarter.

“We’ve got one singular objective, which is ‘Be successful in streaming,’” he said. “If we do that, that’s a homerun.”

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post #196 of 577 Old 02-18-2009, 04:53 PM
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Sounds good to me. Especially if the streaming only price could be lower than the $8.99 I pay now which I only use for streaming since I don't rent discs of any kind any more.

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post #197 of 577 Old 02-18-2009, 05:44 PM - Thread Starter
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Verizon Wireless Getting 50-60 Megabits in 4G Download Trials

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Verizon Wireless (VZ) said Wednesday that it is testing 4G Long Term Evolution (LTE) service with the aim of launching commercial service in 2010. Verizon Wireless said the 4G LTE network in field trials has demonstrated download rates of 50 to 60 megabits per second, but the final speeds are to be determined.

Verizon Wireless' 4G LTE deployment uses the company's recently acquired 700 MHz spectrum. 4G LTE is a rival technology to WiMax, which is backed by Sprint (S), Clearwire (CLWR) and tech industry heavyweights such as Intel (INTC). The 700 MHz spectrum had been used for television signals, but was acquired by Verizon, AT&T (T) and others in an FCC auction.

Speaking at the Mobile World Congress in Barcelona, Verizon CTO Dick Lynch outlined some of the details behind its next generation network. Among the key points:

Verizon has named Ericsson (ERIC) and Alcatel-Lucent (ALU) as primary vendors for initial LTE deployments. Starent Networks is the packet core vendor.
4G LTE trials are underway in the U.S. in Europe with Vodfone's (VOD) help (Verizon Wireless is a Vodafone-Verizon joint venture).
Nokia Siemens Networks and Alcatel-Lucent will supply an IP Multi-Media Subsystem (IMS) network. The IMS will allow for converged applications on wireless and broadband networks.
While Verizon is building out LTE service it expects to continue with 3G service well into the next decade.

As for the trials, Verizon Wireless and Vodafone are testing 4G LTE networks in the following areas in Minneapolis, Columbus, Ohio, and Northern New Jersey and in Budapest, Dusseldorf, and Madrid in Europe. Once those trials are complete, Verizon Wireless said it will ramp up deployment through its coverage area.

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post #198 of 577 Old 02-18-2009, 07:08 PM
 
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Wow!! They are going to boast back to back record quarterly growth on the back of their streaming service. Glad to see they are staying ahead of the curve. I hope the rest of the content industry jumps in sooner so we can get more content ASAP. I am on the 1-disc at a time offering with Netflix and have not even bothered with sending a disc back yet. Enjoying what is out there, but would be really jazzed to see more HD content.
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post #199 of 577 Old 02-18-2009, 09:40 PM
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Report: 38% of Connected Home Subscribe to Premium Delivery Services

http://homemediamagazine.com/electro...services-14610
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post #200 of 577 Old 02-19-2009, 03:19 AM
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Wow!! They are going to boast back to back record quarterly growth on the back of their streaming service. Glad to see they are staying ahead of the curve. I hope the rest of the content industry jumps in sooner so we can get more content ASAP. I am on the 1-disc at a time offering with Netflix and have not even bothered with sending a disc back yet. Enjoying what is out there, but would be really jazzed to see more HD content.

I tried watchinga streaming SD movie last night(In Like Flint and Our Man Flint) The video quality was terrible compared to a few TV shows I streamed from them in SD. I'll mainly stick to the Netflix streaming for HD and try to leave any SD watching to VUDU. Plus since I've been watching HD content for so long, I have a difficult time watching SD content anyway.

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post #201 of 577 Old 02-19-2009, 08:38 AM
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The cable empire strikes back


http://www.contentagenda.com/blog/15...000040900.html




I don't have access to the original WSJ story but if true it would really suck.

Cable companies scheme to limit online content to pay-TV subscribers

http://www.engadgethd.com/2009/02/20...ay-tv-subscri/
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post #202 of 577 Old 02-20-2009, 10:13 AM - Thread Starter
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Comcast Counters Subscriber Slump With Speed

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Comcast said this morning it plans to roll out its super-fast DOCSIS 3.0 network to 65 percent of its footprint by the end of 2009, and upgrade subscribers in those markets to a minimum speed of 12 Mbps down and 2 Mbps up at no charge wherever possible. Those subscribing to higher tiers will be upgraded to the Comcast's Blast tier, which will offer download speeds to up to 16 Mbps and provide up to 2 Mbps of upload speed.

New tiers offered with the fatter pipes will include 50 Mbps of downstream speed and up to 10 Mbps of upstream speed for $139.95 a month, as well as 22 Mbps of downstream speed and up to 5 Mbps of upstream speed for $62.95 a month. Higher speeds will certainly help Comcast keep up with Verizon's FiOS deployments and will make downloading video a lot faster.

On its earnings call yesterday, Comcast CFO Mike Angelakis said the nation's largest cable company expects to invest between $400 million and $500 million of capital for the DOCSIS 3.0 deployment and all-digital projects. He declined to break down the details of that spending, however. Comcast had upgraded 20 percent of its footprint to DOCSIS 3.0 at the end of 2008, and said on the call yesterday that it has installed DOCSIS 3.0 in 30 percent of its market.

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post #203 of 577 Old 02-21-2009, 08:14 AM
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Comcast Counters Subscriber Slump With Speed

Hopefully this pushes FIOS to increase their speeds without an increase in price. I would love to increase my 50/20 tier to something like 70/30 without increasing my $90 a month cost.

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post #204 of 577 Old 02-24-2009, 09:27 AM - Thread Starter
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VUDU First to Sell On-Demand Movies in High Definition

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SANTA CLARA, Calif., Feb. 24 /PRNewswire/ -- VUDU, Inc., a leading provider of digital on-demand entertainment products and services, today announced it has achieved another industry milestone by becoming the first on-demand service to offer high definition movies for download to own on its popular 1080p Internet Movie Player. HD movies are available for purchase today to all VUDU owners.

Until now consumers have been restricted to renting HD movies from on- demand services, including VUDU's library of over 1,400 HD movies, the largest HD library in the world. Today VUDU unveiled a collection of over 50 HD movies from top independent studios that are available for both rental and download to own. Movies offered in this collection will be available for purchase in both instant HD and VUDU's industry-leading HDX format at the same price. HDX is the highest quality on-demand format available anywhere on cable, satellite, broadcast, or the Internet.

Magnolia Picture's Man on Wire, the 2009 Academy Award winning documentary that has been showered with critical praise and global film awards, is among the first titles to be offered for purchase in HD on VUDU, along with critically acclaimed Transsiberian and War, Inc. from FirstLook Studios.

"Consumers are clamoring for the ability to own digitally-delivered titles in high definition, especially in our HDX format, and we are excited to be the first in the industry to meet this consumer need," said Edward Lichty, VUDU's EVP of Strategy and Content. "This is a watershed event for the industry as well, signaling the studios' recognition of and confidence in digital delivery as an increasingly important part of their business. We expect to see a continuing expansion of digital rights in the coming months."

FirstLook Studios, Kino, and Magnolia Pictures are among the independent studios offering films for sale on VUDU in HD. VUDU plans to offer every HD release from these studios for purchase as they are added to the service, day and date with DVD release. All current films and subsequent additions to this HD collection will be available to purchase in instant HD and VUDU's industry- leading HDX format.

"We are thrilled to work with VUDU to offer our new releases for sale in HD when they are released on DVD," said Dean Wilson, Chief Operating Officer of FirstLook Studios. "We continue to explore every channel for distribution, and the emerging digital platform that reaches consumers in their homes directly on their HDTVs via VUDU is an important new channel for us."

High definition titles purchased from VUDU can be stored on the consumer's VUDU box or in the VUDU Vault, a free online storage option for movies and TV shows that enables consumers to free up disk space while still retaining access to all their purchased titles. Movies are priced between $13.99 and $23.99.

VUDU's library of more than 14,000 movies and TV episodes, including more than 1,400 HD films, is updated weekly with new releases and library titles. VUDU is the only service to offer both instant start HD and HDX, the highest quality on-demand format available anywhere. Designed to deliver an optimized cinematic experience to owners of 40-inch and larger HDTVs and projectors, HDX with VUDU's TruFilm(TM) technology features a virtually artifact free 1080p picture and immersive, high definition sound.

Additionally, VUDU offers access to popular Internet based content, from video, music and photos from popular sites such as YouTube, Flickr, and to games and social networking applications, directly on the TV, all easily accessible using the VUDU remote control with no need for a PC.

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post #205 of 577 Old 02-26-2009, 10:02 AM
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Netflix CFO: DVD Key to Compelling' Streaming Offering

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Buoyed by strong subscriber growth attributed in part to its free Watch Now streaming service, Netflix CFO Barry McCarthy Feb. 25 told an investor group that by-mail DVD rentals remain key to providing a compelling consumer proposition.

Speaking at Jeffries Internet & Media conference in New York, McCarthy said growth of the streaming business depends on numerous variables, including how fast consumers have access to devices in the home that enable them to stream content on their TV.

To Wall Street analysts seeking to stoke the flames of burgeoning digital distribution of movies in place of DVD, McCarthy offered little grist other than an analogy involving rival Blockbuster Inc.

When I got into this business in 1999, everyone thought Blockbuster would be put out of business by streaming, he said. And they do have their challenges, but none of them relate to streaming. We are going to be in the DVD business for a long time, probably much longer than most of you in the room imagined.

That said, McCarthy reiterated what CEO Reed Hastings mentioned in previous financial calls, namely that the Los Gatos, Calif.-based online DVD rental pioneer envisions launching a standalone streaming business someday in the future. But the executive admitted that costs associated with licensing newer content and undetermined pricing models and revenue growth margins hampered a quicker rollout.

McCarthy said the adoption rate for streaming would be paced by the growth in the number of platforms that enable users to consume the content on the TV. He said devices such as Web-enabled video game systems, Blu-ray Disc players and Web-enabled TVs tend to be purchased during the Christmas shopping season.

It is many, many, many years of Christmas selling seasons before enough of those devices populate people's homes to matter, he said.

He said that it took the DVD player five years to go from $300 to $35 and reach 50% household penetration.

These [streaming] devices will not grow that quickly, McCarthy said.

He said the Watch Now streaming option with limited content, despite the hype, is not compelling enough as a freestanding basis. But when packaged together with the 100,000 DVD titles does offer a better value proposition, according to McCarthy.

We seek to exploit as a competitive advantage what many people for many years perceived to be a buggy whip company,' which was the DVD-by-mail business, he said.

http://www.homemediamagazine.com/net...offering-14729
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Time Warner's Bewkes Plots Industry Initiative to Eradicate Free Content

http://adage.com/mediaworks/article?article_id=134961

I don't mind the idea of having to buy my content online. But if they make me have to buy from the cable/sat provider then they have just killed any value that downloads would have had for me.
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Amazon goes live with Roku box

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Set-top player streams from 40,000-title inventory to TV

MARCH 3 | Amazon.com began streaming its digital movie and television titles directly to television sets through Roku set-top boxes today.

The deal, which was announced in January, includes Amazon Video On Demand's inventory of 40,000 standard- and high-definition titles.

Netflix, the largest U.S. movie-rental service via mail, started video-streaming its content with the Roku set-top box last May.

"The success of the Roku Player reflects the increasing desire of consumers to watch what they want to, when they want to," Mark Samuel, general manager of cable and IP STB business at Netherlands-based semiconductor maker NXP, said in a statement. NXP makes decoders for Roku's $99 box. "In addition to Netflix instant watching, Amazon Video On Demand offers an immense digital library of content with instant playback, no downloading and no waiting."

...

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AppleTV sales to surpass 6 million units this year?

http://www.videobusiness.com/blog/17...520041452.html
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Quote:
Originally Posted by jvillain View Post

AppleTV sales to surpass 6 million units this year?

http://www.videobusiness.com/blog/17...520041452.html

From the article you reference:

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Apple hasn't released sales numbers for AppleTV, which lets users stream movies to their TV, but said during its last earnings call that sales tripled in the final quarter of 2008

Hmmm.
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ZillionTV, the next generation of video on demand

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During a long career as a television and technology executive, Mitch Berman has tried to sell several different iterations of TV, often in their formative stages. These included premium cable networks (at HBO), original cable programming (E! Entertainment Television), satellite TV (Sky and Foxtel), interactivity (OpenTV), and video on demand (Arris). Now, Berman is onto the next new thing, delivering TV through the Internet. His company, ZillionTV, faces long odds, but has at least three advantages over the increasingly crowded field of online TV players: It brings DVD-quality programming straight to the TV set. It has a remote control that sets a new standard for ease of use. And its advertising model actually encourages people to watch commercials, rather than undermining their value to advertisers and programmers. Berman is positioning it as a service that offers unique benefits to consumers, advertisers, content companies and broadband providers. Here's hoping the Hollywood studios that own a piece of Zillion don't strangle it in its crib, which they could easily do....

Berman said he got the idea for his start-up in February 2007 from inventor Peter Redford of TV Interactive Corp., who gave him a demonstration of Internet-based TV on demand using a PC as a set-top box. Ten months later, he'd lined up his first venture funding. His backers today include two VC firms (Sierra Ventures and Concept Ventures), Visa, five studios (Warner Bros., Sony Pictures, Disney, NBC Universal and 20th Century Fox) and a chip maker (Sigma Designs), Berman said, with more money coming soon from an as-yet undisclosed Internet service provider.

ZillionTV's goal is to lure viewers away from cable and satellite by offering them movies and TV shows on demand. Its ambition is to make available everything that pay-TV services provide as well as a healthy supply of "long tail" programming, but it's not there yet (more on that later). Another important difference from pay TV services is that ZillionTV doesn't plan to charge a flat monthly fee. Instead, it will give customers three different ways to compensate programmers for what they watch: buy a program, rent it for a limited time period, or view it gratis with commercials. The service relies on a thin set-top box that connects to DSL or cable-modem service and a high-tech remote, both of which ZillionTV plans to supply for free.

I watched a bit of ZillionTV in Berman's office in Santa Monica, and the images were quite impressive. Seconds after programs were selected, they began playing in what It looked to me like DVD quality -- a welcome contrast to the delays inflicted by Hulu and Netflix's streaming services. ZillionTV's standard-definition streams require 1.5 Mbps of bandwidth, Berman said; high-definition streams will need faster connections, although the speed has yet to be determined. Just as impressive was the motion-sensitive remote control, which enabled Berman to select items simply by pointing at the right spot on the screen and clicking. Taking advantage of the remote's capabilities, the service's menus displayed programs as images (picture a tableau of DVD covers) spread across the length of the TV, rather than using the customary TV grid or PC-style folders. The ZillionTV software also enabled Berman to search for a program by selecting the first few letters from an on-screen alphabet.

The other innovation is in the way ZillionTV generates revenue for program providers. Two of the three options it gives customers aren't novel -- it rents programs the same way as other online video-on-demand services do, and it sells them much as Amazon does (by storing the customers' purchases on its own servicers, instead of having them download a copy to their set-top box or PC). The third, however, is a twist on the usual advertiser-supported offerings. ZillionTV lets customers tell advertisers what kinds of commercials they're interested in, and to encourage them to watch more ads, it gives customers points that they can redeem for merchandise. "You're rewarded for watching television," Berman said, a concept the company hopes will prove irresistible to couch potatoes.

Berman argued that the chance it offers to target ads to interested viewers, to make commercials interactive and to break out of traditional TV commercial formats will enable ZillionTV to charge higher ad rates than the networks do. Its technology also creates opportunities to sell the products shown on screen (the remote has a "buy now" button). "This is a blank canvas on which the creative community can paint its pictures," he said. Those higher rates are important because the company it trying to generate at least as much from an advertiser-supported viewing as it would collect from a rental. That kind of performance will help persuade Hollywood to make more titles available for ad-supported viewing, Berman said, as well as to abandon the rigid release windows that cause the studios to yank new programs offline just a few weeks after they appear on the Net. "I'm trying to prove to my partners that there is an alternative, and we're trying to bring down those windows," he said.

One problem for other TV-on-the-Internet services is that consumers won't accept as many ads as they're willing to sit through on TV. What that means for services such as ZillionTV that bring the Net to the TV set is anyone's guess at this point; Zillion has been conducting a national trial for about a month, and it's still trying to determine how many commercials customers will tolerate. The conventional wisdom has been that Internet-based programs can get by with fewer commercials because they can target them more effectively than broadcast TV can. But some advertisers and agencies have pooh-poohed targeting because it translates into a smaller audience.

A bigger issue for ZillionTV is its library of content. Berman said it expects to have 15,000 programs this year, which is 3,000 more than Netflix offers today. Still, some of its partners -- notably Fox and NBC Universal, which own Hulu -- are holding back new programs or making them available only on a pay-per-view basis. Premium cable networks have also been virtual no-shows online, and some other notable cable networks have spurned the Net for fear of reducing the subscription fees they receive from cable and satellite operators. Berman argues that if he proves the effectiveness of his business model, content providers will come. But it may be impossible for him to do so without a critical mass of new programming. After all, ZillionTV won't seem like a viable alternative to cable if it doesn't offer many of the most popular shows. If the studios fret about ZillionTV undermining their existing revenue streams from broadcasters, pay TV and online distributors such as Hulu, they may not provide the programming it needs to survive. Such a conflict between existing business models and potential new ones contributed to the music industry's plummeting fortunes. As ZillionTV illustrates, it's Hollywood's turn to struggle with that dilemma.

More from BusinessWeek:

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