Netflix

[Vanraw]

http://www.marketwatch.com/story/netflix...st=markets

Interesting read.

[Breand]

The article only hints at what their real problem is: that Hastings thought the ability to stream is more important than the CONTENT that is streaming. And Netflix's streaming content still sucks, and they have set up regressive licensing deals with no hope in sight for it to stop sucking. And their answer to that problem, is to say "fuck you" to the people who want to see the new releases by doubling the price to see it. People want to see the new shit, not fart around searching for old stuff to watch. They can channel surf their TV for that.

Here's the rub. Old people want their DVDs in the mail. I can't tell you how many of my older relatives are perfectly happy getting their DVDs in the mail and watching stuff. To them that is new technology, "I sit on my butt and DVD arrives in the mail, PROGRESS!"

Young people won't pay for content. They'll torrent it or dig around the web for unlicensed streaming sites and view stuff that way.

Which only leaves middle aged people as the only buyers of streaming content. But we want to watch new stuff so we need the DVDs too. But we won't pay for both. So we quit. Which is what I did.

So all they are left with are the old people who want DVDs, and their current strategy is the complete opposite of meeting their needs. $75 a share is STILL too much for these guys.

[Slamz]

Young people won't pay for content. They'll torrent it or dig around the web for unlicensed streaming sites and view stuff that way.

I would tend to disagree here. I think iTunes and Amazon demonstrated that what most people want is convenience, and there is a price point where even young, tech savvy people will pay for the convenience of finding what you want in 5 seconds rather than having to search Pirate Bay and then risk shitty download speeds, missing file sections, bad quality, etc. How many young people are buying their music through iTunes now just because Pirate Bay is too much of a pain in the ass?

And the bigger the file is, the more of a pain in the ass it's going to be.

Of course, the more it costs, the more attractive piracy will be. For $15 per movie, piracy looks pretty good. What about 99 cents for a rental, though? What about unlimited streaming for $8/month?

And a quick glance shows me they have Tron (the new one), Iron Man 2, Kick-Ass and The Expendables now -- so it's not like it's all movies from the 80's or Thailand. (Still no "Live Free or Die Hard", though.)


In the end, I think movie studios are going to have to come to the same realization as the music industry:
It's better to make some money off of cheap, available, high quality online offerings than to make no money because you have made piracy into a relatively attractive offer.

If Netflix is finished, it will only be because Apple, Amazon or some other player made a big new deal and took the rug out from under them. And right now, there's no indication that this is coming. Apple wants to sell hardware, not movies. Amazon wants it, but I suspect they want it on their own terms and aren't yet up to the task of bending the movie industry to their will. Netflix is still the best game in town.

[Vanraw]

Also, I wouldn't say Netflix streaming sucks. I've seen some great movies that I would never have watched....

The one asset that Netflix has over everyone else is client distribution on all sorts of hardware. They did a great job in driving their brand into the household. This alone makes them valuable.

Part of the problem here is that the stock was driven to levels that were unrealistic.

[Slamz]

It's certainly risky. The big question, I think, is "where do you see streaming content at, 10 years from now?"

If every studio launches their own service, something like online channels, then Netflix is dead.

If someone like Amazon pulls the rug out from under them by landing exclusive deals with major studios, then Netflix is dead.

But if it's Netflix who lands these deals then they could be the next AAPL stock. I certainly think we're approaching a pivotal point in entertainment, where online offerings completely replace both cable television and DVD sales, and Netflix is still in the best position to be the one standing on top of this. And by "on top", I mean they could basically be America's #1 broadcast network -- if they aren't already.


I agree with a Yahoo Finance article I read that basically said the problem with Netflix is that they're impatient. They were really doing quite well and I don't see why they didn't just slowly work their way up the ladder of success. Instead, they tried to make a big leap and so far it looks like all it did was make them fall off the ladder.

[Vanraw]

The thing about every studio doing their own thing is the lack of a consistent delivery system in the home. The majority of consumers have no interest in watching TV on a PC. Many of those have no interest in a Xbox or even apple TV box.

This is what Google TV was trying to solve. Sony jumped in with both feet, but it didn't take because they still lacked content. Hell most TV networks that allow PC streaming, blocked Google.

We are all still waiting for that panacia. Netflix is in the best position for the simple reason that they have the widest distribution system, but as we can see, it means nothing if they can't get everyone to play nice.

Another buyer that we haven't thought about is Sony. A massive studio that sells TV's.

[Grieve]

We are all still waiting for that panacia.

'twill be Apple's integrated iTV (with Siri and iCloud). Steve finally cracked it!

[Slamz]

We are all still waiting for that panacia.

'twill be Apple's integrated iTV (with Siri and iCloud). Steve finally cracked it!

They wish!

Netflix, and to only a slightly lesser extent, Amazon, both have good potential because they are on so many devices. Neither of them really cares about selling hardware, so long as they can stream their product to you.

Apple will never do this. They want to sell hardware, but America is not going to go out and buy an Apple hardware device to stream shows to their TV, especially when they already have a device capable of streaming Netflix (and probably Amazon).



Incidentally, Amazon does have a really good supported device list:
http://www.amazon.com/gp/video/ontv/devices

I can stream Amazon to my TV through my Tivo, and have done so a few times. The main thing they lack is console support.

[Grieve]

Apple will never do this. They want to sell hardware, but America is not going to go out and buy an Apple hardware device to stream shows to their TV, especially when they already have a device capable of streaming Netflix (and probably Amazon).

I don't require any additional Apple hardware to use the current AppleTV. I can stream netflix and YouTube and bunch of other stuff to it, and I can rent or buy movies and TV shows directly from Apple servers. An Apple iTV would be the same.

It's coming!



http://9to5mac.com/2011/10/27/large-tele...pply-chain

[Maren]

I could see Netflix landing deals with the major studios, however with the "all you can eat" nature of their subscription theme, it would most likely have to be subsidized with a user requirement to watch upcoming movie previews prior to a movie starting.

[Grieve]

I don't really get what the problem is the studios have. For $5-15 a month you can subscribe to HBO, Starz, etc through your cable provider and get loads of studio movies, including a lot of recent ones. Each studio must only get a small fraction of that. The cable company will be keeping a bunch, HBO will be keeping a bunch, etc. It seems strange that Netflix can't sign similar deals.

I guess Netflix has to split it's $8 month fee amongst TV and movie studios, rather than just for movies, so maybe it isn't paying as much. Still, it reminds me of the futile battle the music companies had against digital music vs physical CDs.

[Vanraw]

I don't really get what the problem is the studios have. For $5-15 a month you can subscribe to HBO, Starz, etc through your cable provider and get loads of studio movies, including a lot of recent ones. Each studio must only get a small fraction of that. The cable company will be keeping a bunch, HBO will be keeping a bunch, etc. It seems strange that Netflix can't sign similar deals.

I guess Netflix has to split it's $8 month fee amongst TV and movie studios, rather than just for movies, so maybe it isn't paying as much. Still, it reminds me of the futile battle the music companies had against digital music vs physical CDs.

Yea its the "all you can drink" service. Note that there is a lot of motivation from a company like HBO, to not allow streaming of their content with out a HBO subscription. That's why they implemented a HBO GO feature for subscribers to stream to PC's and tablets. They want to give their paying customers streaming ability without losing the massive revenue HBO makes on DVD sales to non-hbo subscribers.

Netflix could jump into something like that. Offer a HBO channel, where you would subscribe to HBO just like you do with a cable provider. I would pay for that. Im pissed that my cable provider isnt offering the HBO GO yet.

[Maren]

I don't really get what the problem is the studios have. For $5-15 a month you can subscribe to HBO, Starz, etc through your cable provider and get loads of studio movies, including a lot of recent ones. Each studio must only get a small fraction of that. The cable company will be keeping a bunch, HBO will be keeping a bunch, etc. It seems strange that Netflix can't sign similar deals.

I guess Netflix has to split it's $8 month fee amongst TV and movie studios, rather than just for movies, so maybe it isn't paying as much. Still, it reminds me of the futile battle the music companies had against digital music vs physical CDs.

The difference is that there is a set number of movies provided to the premium channels each month that they cycle through. (i.e. say 15 movies from a specific studio w/ 3 being new releases for x number of studios). Netflix deals (or at least I assume it would) would include the studio's entire library. The way to get around it is for netflix to pay-per-play, but the studios are most likely trying to squeeze a margin out of netflix similar to what they would from DVD sales (because why buy a $15-$20 new release if you can watch it whenever, however many times you want on a $8/month streaming account). Add to that the money the studios are getting from competitors for those same movies on a streaming rental basis.

In my opinion, you could defray some of the cost by allowing the studios to stream 1-3 movie previews (upcoming to theater, not the retarded dvd movie previews the latest bluerays try to force you to watch). The studios probably see a netflix deal as undercutting their streaming rentals and DVD sales, so even with what is essentially ad-based watching, there is probably a large gap between what netflix is willing to pay and what the movie studios see as profitable considering the reduced demand projections for the other media.

[Maren]

Yea its the "all you can drink" service. Note that there is a lot of motivation from a company like HBO, to not allow streaming of their content with out a HBO subscription. That's why they implemented a HBO GO feature for subscribers to stream to PC's and tablets. They want to give their paying customers streaming ability without losing the massive revenue HBO makes on DVD sales to non-hbo subscribers.

Netflix could jump into something like that. Offer a HBO channel, where you would subscribe to HBO just like you do with a cable provider. I would pay for that. Im pissed that my cable provider isnt offering the HBO GO yet.

I've logged in to HBO Go (although it was a couple of months ago, so it might have grown since then) - you get all of the HBO owned/created shows and like 30 standard movies (very very poor selection). Its a nice feature, but I don't really see it as a new customer draw (more like a customer retention feature) unless the selection of non-HBO content increases.

[Arsilon]

If Netflix had said a few months ago that we were raising prices because they just signed a new content licenses with all the major movie studios to provide "current" movies, then I don't think there would have been quite the backlash there has been.

Instead, it was about cost structures and splitting to two companies then not, with no mention of how crappy the content really is on the streaming side or how they will improve it. And we're still at the higher price point when all else has been said and done.

I don't think there was quite the issue at the $8 vs $15 price point as there was the fact that they weren't delivering any additional value for it.

[Vanraw]

I doubt you will see non-hbo content. That's not what they are trying to do. It is a retention plan for the subscribers that are at HBO primarily for the HBO content.

I know that I for one, would probably not be a HBO subscriber if I wasn't addicted to True Blood, Game of Thrones, and Boardwalk empire.

[Jakensama]

if I wasn't addicted to True Blood,

I never knew you were a teenage girl...

[Vanraw]

if I wasn't addicted to True Blood,

I never knew you were a teenage girl...

lol there's a lot of things you don't know about me .

Actually the last season sucked, but the first 2 were very entertaining.

[Slamz]

I don't require any additional Apple hardware to use the current AppleTV.

You don't need any addition Apple hardware to use your current Apple hardware? O.o

Point is, I don't think people would flock to an Apple streaming service when they would be required to buy a $99 AppleTV box in order to use it, versus an Amazon or Netflix streaming service which works on hardware a lot of people already have.

In fact, AppleTV is basically what I was saying: Apple wants to sell hardware. They would rather sell you a box that support Netflix than sell you a streaming service that some other company's hardware can run. If Apple sold a streaming service, only Apple hardware would support it.



And then Apple would sue all other streaming services for stealing their idea...

[Grieve]

How is different buying a $99 Apple TV box as opposed to a Roku box, or a network blu-ray player, or a playstation, or whatever? The Apple TV is way cheaper than most of those options.

Anyway, they've already sold millions of Apple TV boxes, so obviously people are flocking to it. The question is whether people would buy a $2000 integrated TV instead - I say yes.

And they already have a streaming service, but I agree...chances are that only their hardware will ever support it. Not necessarily a bad thing - that model works just fine with OSx (macs) and iOs (iphones, ipads, ipod touch). In fact AppleTV runs a version of iOs, so hopefully it will soon support apps as well.

[Jakensama]

All of those things are better than the apple tv.

The Roku box has hulu plus and mlb tv in addition to the things apple limits you from watching.

The blu ray player can play blu rays.

The ps3/xbox can play videogames.

Any of those things are superior to what is undoubtedly one of the worst tech products i've ever owned.

The futures going to be having more and more tvs with this stuff implemented, its idiotic to buy extra boxes you don't need.

[Slamz]

What Jake said. People buy a BluRay player to play BluRay DVDs. People buy a Playstation to play video games. These devices also, incidentally, do streaming. There is no reason to go out and buy a dedicated streaming box.

Nor would they want to. Which is why Apple as a streaming provider won't fly anytime soon. Maybe if they made the deal of the century and suddenly had all movies from all studios available to stream, people would be willing to buy an AppleTV. It would have to do something extraordinary which their existing plethora of streaming devices wasn't already doing.



I'm sure the real holdup on streaming is DVD sales, though. Much like the book industry does not want to stop selling paper, movie studios do not want to stop selling DVDs. Even though Amazon does a pay-per-view service, it's still hard to find top notch movies. I suspect movie studios not only don't want Netflix style streaming, they also don't want $4 rental streaming. They want DVD sales.

Stuff like Redbox and the Netflix DVD service likely gets around this because they are buying physical DVDs, which makes the studios happy.


Incidentally, interesting article on Redbox, which is also facing a price hike, for different reasons:
http://www.theatlantic.com/business/arch...ss/247535/

One thing the article points out is that since Netflix did the split, if you ONLY want DVD rentals (which is all Redbox does anyway), then your price just went down. For the cost of renting 6 Redbox movies, plus change, you could just get the Netflix DVD service, have a much better selection, rent them as fast as you can mail them and get a much more lenient rental policy (Redbox requires next-day returns, if I recall correctly, whereas Netflix doesn't care).

[Grieve]

The Roku box has hulu plus and mlb tv in addition to the things apple limits you from watching.

AppleTv has Netflix, YouTube, MLB.tv, NHL.tv, Nba game time, Wall St Journal Live, Vimeo, Flickr, 100s of Internet radio stations...I can't say I feel very limited. They are adding new stuff all the time. Plus I can access anything I want on my iPad and AirPlay it to my AppleTv.

[Jakensama]

The Roku box has hulu plus and mlb tv in addition to the things apple limits you from watching.

AppleTv has Netflix, YouTube, MLB.tv, NHL.tv, Nba game time, Wall St Journal Live, Vimeo, Flickr, 100s of Internet radio stations...I can't say I feel very limited. They are adding new stuff all the time. Plus I can access anything I want on my iPad and AirPlay it to my AppleTv.

Roku is cheaper as well and apparently has 300 channels of streaming...

I think they are both fairly useless products, but last I checked Roku has more streaming options for less money. I don't know why you'd buy a dedicated device for streaming when so many modern game consoles or blu ray players or tvs already let you do this AND something else.

None of the shit works outside of America anyways.

[Grieve]

When looking at this stuff from an investing standpoint, you have step away from being young and technically competent/geeky. Yes, all of us are able to rig stuff up with game consoles or, even better, hooking our PC up to the TV directly and using XMBC (which I did for a long time).

But...the average family ISN'T technically competent. I know this because everyone in my wife's family (as well as neighbors) are constantly calling me to come help them fix something or get it working in the first place. I'm sure most people on this board have experienced the same thing.

The average person wants something that just works, that they don't have to screw around with and configure and so on. Plus in most family households, the Playstation/Xbox/whatever isn't attached to the main family TV, because the adults want to watch TV, not fight for control of it with their game-addicted kids.

Yes, there are more and more TVs/blu-ray players that have Netflix/Amazon/whatever streaming built in, but most people don't buy new TVs very often, especially in this economy. And most people buy cheaper-end blu-ray players that don't have streaming, or bought earlier models that didn't have it (ours doesn't). So there is a big market for add-on boxes - AppleTV and Roku between them have sold many millions of units.

But I agree, an add on box isn't ideal. People don't want to screw around with changing inputs, depending on what they are watching. Which is why I think an Apple-designed TV that is fully integrated (no changing inputs), and has Apple's typical "it just works" ease of use, will sell big.

And Slamz, Apple already has streaming on Apple TV, it's just a per-item approach, not an all-you-can-eat monthly subscription. I can buy or rent movies or TV shows, and stream them instantly. I know they are working on a subscription plan that will let you dump cable and just get the channels you want, but the cable providers are fighting tooth and nail to block it. But it's gonna happen sooner or later.