According to a recent survey, nearly a quarter (23%) of Netflix subscribers end up cancelling their premium-TV service.
The survey, by financial services firm Cowen & Co., was conducted in mid-February. Of the just over 1,200 consumers surveyed, 46% (569) are non-subscribers who had access to Netflix streaming, while 28% (346) are paying Netflix subscribers.
Low-income subscribers were more likely to cut the cord to premium-TV service. While those with an annual income of $25,000 or less comprised 18% of the survey respondents, they accounted for 32% of those who cancelled pay-TV service after subscribing to Netflix. Read more
Netflix recently has been adding 3-D and Super HD titles to its inventory – but with the catch that consumers will only be able to access such content if their ISP participates in the Netflix “Open Connect” program.
Under the Open Connect program, rather than Netflix streaming videos to consumers using third-party Content Distribution Networks (CDNs) like Akamai or Level 3, an ISP would effectively interconnect directly with Netflix’s own CDN at specified peering locations. (It’s not entirely clear, but it appears that there could be some cost to the ISP in doing so – certainly in reaching the peering locations, if not interconnecting at them.) Netflix asserts that this arrangement will enable optimized streaming, but it’s also readily apparent that the move will save Netflix money by avoiding the costs of having third-party CDNs carry the massive amounts of data associated with 3-D and Super HD video. Read more
A disruption in Amazon’s cloud computing services on Christmas Eve rendered numerous Netflix customers unable to download movies at a critical time.
Amazon apologized for the outage in an online statement posted December 29. “We want to apologize,” the statement read. “We know how critical our services are to our customers’ businesses, and we know this disruption came at an inopportune time for some of our customers.”
According to Amazon, the trouble began with the accidental deletion of data during a routine maintenance process, which led to high latency and error rates for the technology that manages Amazon’s load balancers. The load balancers distribute demand for computing power among servers that are best suited to handle the work loads. At the peak of the disruption, nearly 7% of Amazon’s load balancers were impacted. Read more
In an August 1 article, Home Media Magazine detailed recent remarks by Time Warner Cable (TWC) CEO Jeff Bewkes. Speaking to investment analysts in a meeting to discuss the TWC’s second quarter financial report, Bewkes discussed his views concerning over-the-top (OTT) subscription on-demand platforms.
Bewkes described TWC’s strategy of using YouTube as a promotional device to entice viewers to its content on TNT and HBO. He indicated that the company did not use YouTube to distribute network-length original content, as both networks already provide content by subscription through their own on-demand broadband portals. “We think it’s great the extent to which those channels can have a presence on YouTube to drive viewership on our networks,” Bewkes said.
Bewkes said in his remarks that it was HBO that pioneered distribution of on-demand original programming, focusing on the overall value of subscription video on demand (SVOD). Read more
On July 24, Netflix released its second quarter financial results which reveal that the online video company may have long-term problems maintaining its profitability and subscriber base. Further, changes in the subscriber base may be the catalyst for the continued slow downward spiral of its stock price.
MultiChannel News reported that while total domestic Netflix subscribers were 23.9 million at the end of the second quarter, Netflix lost 850,000 DVD subscribers in the second quarter compared to a net gain of 210,000 domestic streaming subscribers. Read more
In a Facebook posting on July 3, Reed Hastings, CEO and co-founder of Netflix, announced to the world that the company had a remarkable month of video streaming activity. “Netflix monthly viewing exceeded 1 billion hours for the first time ever in June. When House of Cards and Arrested Development debut, we’ll blow these records away.”
Netflix reports approximately 23 million streaming subscribers for the month of June, making it the world’s largest online video subscription service. A July 5 FierceOnlineVideo article noted that Netflix stock reflected its largest gain since May 23 when it moved up 6.2% and closed at $72.04 on July 3. Read more
In an apparent move to assist in data transport cost reduction, Netflix announced its new content delivery network (CDN), called “Open Connect” in a June 4 Netflix blog posting. Netflix announced that it will provide data feeds at no cost to the location the ISP designates, or Netflix will deliver to common Interent exchanges for the IPSs to pick up.
Ken Florance, vice president of content delivery at Netflix wrote, “The world’s other major Internet video provider, YouTube has long had its own content delivery network. Given our size and growth, it now makes economic sense for Netflix to have one as well.” Florance writes that Netflix now delivers approximately 1 billion hours of TV programs and movies each month. Read more