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Discussion Starter · #1 ·

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Why is the Netflix Watch Instantly Service taking off when other over-the-top (OTT) video delivery services are languishing? The short answer: Because Netflix makes it easy to watch content on both the PC and the TV, according to a new study from The Diffusion Group (TDG).


Michael Greeson, founding partner for the new media research firm, didn't initially set out to answer that questionhe was conducting a larger study on TV everywhere servicesbut the data he found on Netflix users was so compelling, that he decided to spin it off as its own report.


"Streaming is one thing, but streaming to the TV is a whole different equation," Greeson says. "Those that do this are the bleeding edge of video consumers. They constitute the early over-the-top crowd, but people know very little about who this demographic is."


What first caught his attention is how many Netflix subscribers use the Watch Instantly service. Nearly two-thirds of Netflix members with broadband connectivity use the instant streaming option, either on their computer or television. Also impressive is that half of the Watch Instantly users stream video to their TVs.
Quote:
The study, which was done without any cooperation or input from Netflix, also looked at how the company could improve revenue with new streaming services. It found that 37 percent of users would pay extra for the streaming service they were currently getting, 59 percent would pay more for access to new releases, and only 24 percent would pay extra for mobile access. That's the direction Netflix seems to be moving, Greeson says, with tiered streaming services that deliver different content.


The real lesson of the report is that taking risks with online content can pay off. "Don't be afraid of getting your content online and streaming it to the television," Greeson says. "Don't be afraid of the over-the-top model. Learn how to master it." The current shift in video viewing is only a threat to companies that are standing still, he says.


"If they're not leaders, like Netflix, they should at least be paying attention," he adds.
http://streamingmedia.com/article.asp?id=11730
 

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The full report gives a great profile of the Netflix streaming user. I know it's not free but it has some good insights if you're in the industry.
 

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Hmm. I'd probably be willing to pay just a little more for access to a larger selection of new releases...especially if they were TV shows.


I still think it would be good to have an option to just have the streaming service, and not have to have to rent DVDs. I'd pay for that willingly, too. I wonder, because their streaming service is doing so well, if Netflix might go in that direction in the future? I imagine it would make them enough $$ to be worthwhile trying, anyway....


DGK
 

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Quote:
Originally Posted by DeeKaye07 /forum/post/18186322


I still think it would be good to have an option to just have the streaming service, and not have to have to rent DVDs. DGK

But don't you have that option already? I mean if you sign up and your first dvd arrives, why not just put it in a drawer and never return it? They'll never send you another dvd and you'll have still have the streaming. I don't see where anyone actually "has to" rent dvds from netflix if they are only interested in streaming.
 

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Netflix has said that they have plans for a streaming-only option in other countries but not domestically. They don't have much incentive--if they offered a unlimited streaming-only plan they couldn't charge as much as for unlimited streaming plus disc rental and many 1-at-a-time rental subs would opt for the cheaper streaming-only plan.
 

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Discussion Starter · #6 ·

Quote:
Originally Posted by michaeltscott /forum/post/18187544


Netflix has said that they have plans for a streaming-only option in other countries but not domestically. They don't have much incentive--if they offered a unlimited streaming-only plan they couldn't charge as much as for unlimited streaming plus disc rental and many 1-at-a-time rental subs would opt for the cheaper streaming-only plan.


Exactly. People act like Netflix has something to prove, when they have already proven that the hybrid service of DVD and streaming is immensely successful.


Compare that to Blockbusters service of DVD and Blu-ray by mail that has shed customers at an alarming rate and it is clear that Netflix understands what customers want. 30% growth for Netflix (via DVD and streaming) versus an exodus of customers for Blockbusters by mail service (with DVD and Blu-ray).


Netflix has nothing to prove with their wildly successful service of DVD and streaming.
 

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Quote:
Originally Posted by Batjag /forum/post/18187022


But don't you have that option already? I mean if you sign up and your first dvd arrives, why not just put it in a drawer and never return it? They'll never send you another dvd and you'll have still have the streaming. I don't see where anyone actually "has to" rent dvds from netflix if they are only interested in streaming.

Why do that? It's a prepaid service you can get as many disks sent that you can squeeze in for the month. You have to pay for the service every month, why not use it.
 

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Discussion Starter · #9 ·

Quote:
Originally Posted by bt12483 /forum/post/18188151


Why did it take off? Because it was free to existing subscribers. Subscribers had nothing to lose in trying it out.

Nope.

Quote:
Why is the Netflix Watch Instantly Service taking off when other over-the-top (OTT) video delivery services are languishing? The short answer: Because Netflix makes it easy to watch content on both the PC and the TV, according to a new study from The Diffusion Group (TDG).
Quote:
It found that 37 percent of users would pay extra for the streaming service they were currently getting, 59 percent would pay more for access to new releases, and only 24 percent would pay extra for mobile access.

Contrast that with Blockbuster's by mail service where Blu-ray is included with the core service. Blockbuster is losing customers to that service at an alarming rate, even with access to Blu-ray titles at no additional charge. Ultimately the service STILL has to have value to customers, which Netflix streaming has demonstrated quite successfully.
 

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Quote:
But don't you have that option already? I mean if you sign up and your first dvd arrives, why not just put it in a drawer and never return it? They'll never send you another dvd and you'll have still have the streaming. I don't see where anyone actually "has to" rent dvds from netflix if they are only interested in streaming.


Why do that? It's a prepaid service you can get as many disks sent that you can squeeze in for the month. You have to pay for the service every month, why not use it.

True. And as for just never returning a DVD...well, IMO it's akin to stealing it. It's not mine, I'm just renting the thing, and to never return it is just not right. Call me crazy.....


DGK
 

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Quote:
Originally Posted by joed32 /forum/post/18188253


Why do that? It's a prepaid service you can get as many disks sent that you can squeeze in for the month. You have to pay for the service every month, why not use it.

It didn't really take off until they introduced players for the Xbox and TiVo at the end of 2008. Millions of domestic Xbox Live members and HD TiVo owners instantly had the equipment that they needed to view the streaming content; if they were already Netflix subs, they had everything they needed. I've been in threads in these forums and TiVo Community forums where most of the participants were people who were not previously Netflix subs who'd subscribed solely for the unlimited streaming. Some of them were pissing and moaning about what they felt was a poor selection of titles, because to their mind that's what they were paying for. Those of us who were subscribers when they added the service couldn't be very disappointed in it, since they didn't ask us to pay anything more for it.


But in any case, by expanding it to those two platforms they got hundreds of thousands of people to sign up for the free two-week trial. Some didn't end up subscribing but many did. Now there are a host of other things (BD players, televisions) with built-in streaming Netflix players; many non-Netflix-subs who buy them will sign up to try the streaming.
 

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Quote:
Originally Posted by DeeKaye07 /forum/post/18190055


True. And as for just never returning a DVD...well, IMO it's akin to stealing it. It's not mine, I'm just renting the thing, and to never return it is just not right. Call me crazy....

Okay--you're crazy. You're paying a fee every month to rent and hold on to however many discs are allowed by your plan; it doesn't matter how long you hold onto the same disc. You still don't own it.


Now, if you cancelled your plan and didn't return the disc(s) you had out, that would be stealing
. They'd no doubt eventually charge the credit card you had on file for it, so to really steal the disc(s) you'd have to cancel that to.
 

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Quote:
Netflix CFO: DVD Rental Shipments to Increase 18% in 2010


Despite the hyped migration toward digital distribution, Netflix expects DVD rental shipments this year to increase 18%.


Speaking at separate investor events Feb. 25 and March 1 in San Francisco, CFO Barry McCarthy said packaged-media rentals grew double digits in 2009, while there was 127% year-over-year growth in streaming of at least 15 minutes per month.


McCarthy said Netflix continues to drive subscriber growth by catering to individual movie tastes across a wide spectrum, not just new releases.


“It’s the demand creation process that drives the profitability in the business,” McCarthy said. “That’s the secret sauce. And it will be very important for us to extend that secret sauce into the digital world because digital unlocks unlimited content consumption.”


Indeed, hosts at the Morgan Stanley event March 1 said internal research concluded that Netflix-enabled devices, including the Xbox 360, Sony PlayStation 3 and Nintendo Wii, could be found in 44% of U.S homes — the highest market penetration outside of cable and satellite.


McCarthy said the data reflected the importance of improving the streaming user-interface (UI).


“What we learned this year is that small improvements [updated movie lists on the Xbox 360] in the UI can result in dramatic increases in consumer consumption in streaming content,” he said. “Once that user interface was pushed, it was much easier for [users] to find content and they became much more actively engaged.”


McCarthy said ongoing store closures of Blockbuster, Movie Gallery and Hollywood Video locations had little bearing on the company’s ability to secure improved license agreements with studios.


“Our studio relationships are entirely about how much money we do or don’t pay them, and how good of a partner we are at the negotiating table,” he said. “We are very focused on maintaining health supplier relationships independently of what’s happening in the macro world.”

Indeed, McCarthy said there exists “constant tension” between how much earnings growth Netflix can produce and how much future growth the company invests in the form of additional licensed content and other costs.

Netflix offers streaming as a value-add to subscribers.


“It’s a very big tax on the current profitability of the business,” McCarthy said.
http://www.homemediamagazine.com/net...-18-2010-18599


We all know the 15 minute metric is to pad the numbers. So...streaming still isn't generating any money yet??? And actually eats away at their profits...how long before they start to charge for this "tax"?
 

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Discussion Starter · #14 ·

Quote:
Originally Posted by bt12483 /forum/post/18232977

http://www.homemediamagazine.com/net...-18-2010-18599


We all know the 15 minute metric is to pad the numbers. So...streaming still isn't generating any money yet??? And actually eats away at their profits...how long before they start to charge for this "tax"?

You are missing the point.


Streaming is driving growth. One only need look at their competitor in the DVD-by-mail field for an illustration of what NOT having the streaming option produces (and having Blu-ray as part of the core service). Namely, no streaming (and Blu-ray at the same price) produces NEGATIVE growth.
 

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Quote:
Originally Posted by PSound /forum/post/18234044


You are missing the point.


Streaming is driving growth.

Looks like both streaming and DVD rentals are driving their growth to me.
Quote:
...Speaking at separate investor events Feb. 25 and March 1 in San Francisco, CFO Barry McCarthy said packaged-media rentals grew double digits in 2009, while there was 127% year-over-year growth in streaming of at least 15 minutes per month....

I wonder why they don't tally their DVD rentals in 15 minute increments?



Do people only watch 15 minutes of a movie then turn it off? Why 15 minutes, an absurdly low number for a service that streams FULL LENGTH movies and 30-60 minute TV shows. People only watching 1/2 an episode or something? Why 15 minutes? Surely it couldn't be to inflate usage...no no...

Quote:
Originally Posted by PSound /forum/post/18234044


One only need look at their competitor in the DVD-by-mail field for an illustration of what NOT having the streaming option produces (and having Blu-ray as part of the core service). Namely, no streaming (and Blu-ray at the same price) produces NEGATIVE growth.

Yeah and Redbox also contributes to that NEGATIVE growth. As do a plurality of other factors, which you seem to think don't exist or don't matter as much as your broken record of "streaming vs. bluray, Netflix > Blockbuster".


I guarantee Redbox has contributed more to Blockbuster's NEGATIVE growth than streaming from Netflix has. But yet it's all blurays fault, right?
Blockbuster wasn't in severe trouble before bluray was ever released right? Oh wait - they have been in the toilet for years.


I think I hear your record skipping...time to start it over...
 

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Quote:
I wonder why they don't tally their DVD rentals in 15 minute increments?


Do people only watch 15 minutes of a movie then turn it off? Why 15 minutes, an absurdly low number for a service that streams FULL LENGTH movies and 30-60 minute TV shows. People only watching 1/2 an episode or something? Why 15 minutes? Surely it couldn't be to inflate usage...no no...

Ding, Ding Ding...You hit the nail on the head.
 

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Discussion Starter · #17 ·

Quote:
Originally Posted by bt12483 /forum/post/18234834


Looks like both streaming and DVD rentals are driving their growth to me.

They are seeing 30% growth in subscribers. Of course they are going to see some growth in disc rentals. It is interesting that they use the term "double digits", which could be as low as 10%. Could their disc based rental being seeing lower overall growth then their subscriber base? WoW!!


Quote:
I wonder why they don't tally their DVD rentals in 15 minute increments?



Do people only watch 15 minutes of a movie then turn it off? Why 15 minutes, an absurdly low number for a service that streams FULL LENGTH movies and 30-60 minute TV shows. People only watching 1/2 an episode or something? Why 15 minutes? Surely it couldn't be to inflate usage...no no...

They have no reason to inflate anything. They have all the information to know what is working for them. They continue to make financial investments into streaming for one reason... it is growing their business.

Quote:
Yeah and Redbox also contributes to that NEGATIVE growth. As do a plurality of other factors, which you seem to think don't exist or don't matter as much as your broken record of "streaming vs. bluray, Netflix > Blockbuster".


I guarantee Redbox has contributed more to Blockbuster's NEGATIVE growth than streaming from Netflix has. But yet it's all blurays fault, right?
Blockbuster wasn't in severe trouble before bluray was ever released right? Oh wait - they have been in the toilet for years.


I think I hear your record skipping...time to start it over...

Who is talking about Blockbuster as a whole?


I am talking about Blockbuster's by-mail service, which by itself is shedding subscribers. Despite it being the same price as Netflix and offering Blu-ray as part of the core service. It also had the added option of in-store returns.


Despite those value-adds, it is LOSING subscribers while Netflix with their DVD and streaming hybrid service continues to grow at an incredibly rapid rate. Indeed, it is because of that subscriber growth that Netflix continues to invest in the streaming service.



EDIT:

Here ya go. The previous conversation that clearly demonstrated the difference between Blockbuster-by-mail and Netflix, which are obviously peer services with the distinct difference of Blockbusters service having Blu-ray as part of the core service while Netflix has streaming as part of the core service.

http://www.avsforum.com/avs-vb/showt...7#post18212217
 

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Quote:
Originally Posted by PSound /forum/post/18234927


They are seeing 30% growth in subscribers. Of course they are going to see some growth in disc rentals. It is interesting that they use the term "double digits", which could be as low as 10%. Could their disc based rental being seeing lower overall growth then their subscriber base? WoW!!

Yeah, they say "double digits"...and then it specifically says 18%. What's the problem?

Quote:
Originally Posted by PSound /forum/post/18234927


They have no reason to inflate anything. They have all the information to know what is working for them. They continue to make financial investments into streaming for one reason... it is growing their business.

So, you will go on record as stating that you agree that using a 15 minute timespan is the most appropriate and honest amount to use as the metric that measures usage?


What % of their streaming content is 15 minutes long? I think I watched a Pink panther episode once that was about 8 minutes. I guess that is what they are measuring? Because I know of very very very few movies and TV shows that only last 15 minutes.


So one can only conclude that the reason they are limiting their measurements to 15 minutes is: people watch 15 minutes of a movie and turn it off or........to pad the numbers.

Quote:
Originally Posted by PSound /forum/post/18234927


Who is talking about Blockbuster as a whole?

I am talking about Blockbuster's by-mail service, which by itself is shedding subscribers. Despite it being the same price as Netflix and offering Blu-ray as part of the core service. It also had the added option of in-store returns.

Despite those value-adds, it is LOSING subscribers while Netflix with their DVD and streaming hybrid service continues to grow at an incredibly rapid rate. Indeed, it is because of that subscriber growth that Netflix continues to invest in the streaming service.



EDIT:

Here ya go. The previous conversation that clearly demonstrated the difference between Blockbuster-by-mail and Netflix, which are obviously peer services with the distinct difference of Blockbusters service having Blu-ray as part of the core service while Netflix has streaming as part of the core service.

http://www.avsforum.com/avs-vb/showt...7#post18212217

Great. So what you are saying is that the presence of Redbox has had absolutely 0 effect on their by-mail program? We know that isn't true.


Netflix has even stated that Redbox is the biggest threat to their by-mail service.
Quote:
No, according to Mr. Hastings, the biggest competitor is Coinstar (NASDAQ: CSTR), the coin counting business that also happens to own Redbox, the network of 15,400 vending machines that rent movies for $1 per night. Redbox is installing another machine every hour.


"By the end of the year, kiosks will likely be our No. 1 competitor," Hastings said in a recent conference call. "There are already more kiosks in America than video stores."
http://www.bloggingstocks.com/2009/0...st-competitor/


So are you saying that only Netflix with their streaming has hurt Blockbuster's by-mail service? Are you saying that Redbox has absolutely not hurt Blockbuster's by mail service? No negative effect at all? They don't factor in to the equation of losing by-mail subscriptions? Even though Netflix said they do????????????
 

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Discussion Starter · #19 ·

Quote:
Originally Posted by bt12483 /forum/post/18235089


Yeah, they say "double digits"...and then it specifically says 18%. What's the problem?

I missed that. Thanks.


So it is clear that their disc shipments are not matching their subscriber growth. That goes directly in line with people increasingly signing up and increasingly taking advantage of streaming. Not unexpected.

Quote:
So, you will go on record as stating that you agree that using a 15 minute timespan is the most appropriate and honest amount to use as the metric that measures usage?


What % of their streaming content is 15 minutes long? I think I watched a Pink panther episode once that was about 8 minutes. I guess that is what they are measuring? Because I know of very very very few movies and TV shows that only last 15 minutes.


So one can only conclude that the reason they are limiting their measurements to 15 minutes is: people watch 15 minutes of a movie and turn it off or........to pad the numbers.

The only conclusion you can take from that metric is that it is meaningful to Netflix. They obviously have full access to their usage data, that they may not want to share for competitive reasons. I am guessing they use that metric as it is generic enough to not give away any competitive advantage of streaming usage, while being directly tied to overall increases in streaming adoption.


Despite any conspiracy theories about why they are releasing that particular metric, one thing is clear. They are investing heavily in streaming at the expense of short term profits. They are experiencing massive subscriber and revenue growth as a result. THAT metric is what matters... that Netflix knows, understands and is investing in the service that is growing their service.


Quote:
Great. So what you are saying is that the presence of Redbox has had absolutely 0 effect on their by-mail program? We know that isn't true.


Netflix has even stated that Redbox is the biggest threat to their by-mail service.

EXACTLY!! Redbox should impact Blockbuster-by-mail and Netflix equally!


It SHOULD because Netflix and Blockbuster-by-mail are very similar services at the same price point. THE ONLY MAJOR DIFFERENCE FACING BLOCKBUSTER-BY-MAIL AND NETFLIX IN THE MARKETPLACE IS THAT BLOCKBUSTER-BY-MAIL INCLUDES BLU-RAY WITH THEIR CORE SERVICE WHILE NETFLIX INCLUDES STREAMING WITH THEIR CORE SERVICE.


Beyond that, the two services face the exact same market conditions. Blockbuster is shedding customers, while Netflix is growing customers and revenue.

Quote:
So are you saying that only Netflix with their streaming has hurt Blockbuster's by-mail service? Are you saying that Redbox has absolutely not hurt Blockbuster's by mail service? No negative effect at all? They don't factor in to the equation of losing by-mail subscriptions? Even though Netflix said they do????????????

Again, Netflix and Blockbuster-by-mail are facing the exact same market conditions including competition to each other.


The consumer market has decided that Netflix is preferable to Blockbuster-by-mail. And there is only ONE major difference between the two services. Blockbuster includes Blu-ray while Netflix includes streaming.
 

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Quote:
Originally Posted by PSound /forum/post/18235314


...The only conclusion you can take from that metric is that it is meaningful to Netflix. They obviously have full access to their usage data, that they may not want to share for competitive reasons. I am guessing they use that metric as it is generic enough to not give away any competitive advantage of streaming usage, while being directly tied to overall increases in streaming adoption.


Despite any conspiracy theories about why they are releasing that particular metric, one thing is clear. They are investing heavily in streaming at the expense of short term profits. They are experiencing massive subscriber and revenue growth as a result. THAT metric is what matters... that Netflix knows, understands and is investing in the service that is growing their service.

You sure like to limit things to only one conclusion. Usually, YOUR conclusion, as if there is no other explanation than what YOU say.


Newsflash, more often than not, there are many reasons for why things happen.


Of course you will not admit that using 15 minutes is a little bit more than suspect. But everyone else knows it is.


Does Nielsen measure the most popular TV shows watched in 15 minute metrics? Hmmm.....

Quote:
Originally Posted by PSound /forum/post/18235314


EXACTLY!! Redbox should impact Blockbuster-by-mail and Netflix equally!


It SHOULD because Netflix and Blockbuster-by-mail are very similar services at the same price point. THE ONLY MAJOR DIFFERENCE FACING BLOCKBUSTER-BY-MAIL AND NETFLIX IN THE MARKETPLACE IS THAT BLOCKBUSTER-BY-MAIL INCLUDES BLU-RAY WITH THEIR CORE SERVICE WHILE NETFLIX INCLUDES STREAMING WITH THEIR CORE SERVICE.


Beyond that, the two services face the exact same market conditions. Blockbuster is shedding customers, while Netflix is growing customers and revenue.


Again, Netflix and Blockbuster-by-mail are facing the exact same market conditions including competition to each other.


The consumer market has decided that Netflix is preferable to Blockbuster-by-mail. And there is only ONE major difference between the two services. Blockbuster includes Blu-ray while Netflix includes streaming.

No. Another difference is that I can go to a Redbox in the same shopping center as a Blockbuster. That effects consumer mentality. $1/night is awfully tempting. Blockbuster has a place in brick and mortar. Netflix does not. Redbox has a place in brick and mortar. Redbox intrudes Blockbusters physical space in shopping centers all across the country. It impacts Blockbuster in ways it does not impact Netflix. Of course you will not acknowledge this, but what else is new.


It doesn't even matter, it is obvious to refuse to acknowledge clear differences or other factors between the companies at hand. Once again, you choose to limit the bounds only to your one conclusion, the only thing in YOUR mind that is the conclusion. Because it just has to be what you say, nothing else matters.
 
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