Netflix and ‘House of Cards’: The Numbers Don’t Lie

There’s a reason why the ice storm that struck the D.C. area this past weekend—Mother Nature’s latest insult in this seemingly interminable winter of 2015—didn’t sting quite as much as it might have: on Friday, Netflix made the entirety of the third season of its political thriller “House of Cards” available for viewing. Let the binge watching commence!

The series, which debuted in 2013, marked a significant gamble for Netflix. The company was in the process of morphing from a mail-based DVD distributor to a provider of streaming video content. Yet without a way to differentiate themselves from other online content providers, Netflix’s market share would never be truly secure. The key to the service’s ongoing viability would be coming up with something that nobody else could provide consumers. It rolled the dice with Frank Underwood and “House of Cards.” Read more

Hulu Trying to Keep Up With Netflix?

Hulu’s CEO announced this week that the company is in discussions with pay TV providers to add Hulu Plus to their set-top boxes. This announcement came about a week after Netflix announced that it will be available as a channel on three small cable providers’ Ti-Vo set-top boxes.

In fact, this was not the only announcement Hulu made this week. For one, Hulu Plus just passed 6 million subscribers. Not a lot compared to the 35.7 million that subscribe to Netflix, but still not bad.

Hulu also announced that starting this summer, mobile device users will be able to watch select Hulu programming for free from their devices without a Hulu Plus subscription. A next generation version of Hulu Plus for the iPhone is also reportedly on tap for late summer.

And, finally, Hulu is working on a new feature that allows users to purchase things they see in ads without leaving Hulu. Pizza Hut is reportedly going to be the launch partner; Hulu is tying right into Pizza Hut’s online ordering system.

So, while Netflix (with the interconnection deals with Comcast and Verizon) has been getting all the attention lately, Hulu is quietly improving its features. It will be interesting to see what Amazon Prime comes up with next in the head-to-head battle for streaming TV.

ICYMI: Netflix Inks Deal with Verizon for Access

Netflix Inc. has reached an agreement with Verizon Communications Inc. for connections that will enable improved performance for the video content provider, media outlets reported this morning; Netflix and Comcast reached a similar agreement several months ago. Netflix data reflected better service for Comcast customers following consummation of that agreement.

Three Companies are First U.S. Video Providers to Offer Netflix on Their STBs

Three U.S. video service providers—Atlantic Broadband, Grande Communications and RCN—have announced plans to incorporate Netflix into their set-top boxes (STBs.) The U.S. providers follow European providers, Com Hem and Virgin Media, who already do so.

This action will allow the providers’ customers to access Netflix without the need for a separate STB, input ports, remote controls or other hardware. In the words of Atlantic Broadband chief marketing and strategy officer David Isenberg, “Now, watching Netflix is as easy as changing the channel.”

Customers will still need to purchase a Netflix subscription to make use of the service. They also will need to subscribe to Atlantic Broadband, Grande Communications or RCN’s TiVo DVR service. Customers will be able to use their TiVo DVR to search and view Netflix content.

“These three cable companies are leading innovators, offering more choices and a great experience to their customers,” said Netflix head of business development Bill Holmes. “Not only are they the first U.S. cable providers to offer Netflix on their set-top boxes, they also have directly connected their networks to Netflix, enabling a better viewing experience with faster startup times and superior image quality.”

The Netflix service is available to the customers of the three companies beginning April 28.

The Soft Underbelly of Net Neutrality: How the Comcast-Netflix Deal Shines a Much-Needed Spotlight on Why the Real Issue is Network Interconnection

When policymakers and press reports talk about net neutrality, there has been, until recently, an understandable tendency to focus exclusively on the end user impact: “If Carrier X or Cable Company Y would just stop mistreating its customers by throttling Internet traffic, all would be good in the world.”

This isn’t to say that the end user impact isn’t the ultimate concern – it is. But if you focus only on the symptoms, you can’t diagnose and cure the problem. And because net neutrality is so complex, and because the politics of power surrounding it are so thorny, it’s much easier to latch onto the symptoms, propose “consumer friendly” band-aids and avoid a more detailed analysis of the problems. But superficial steps won’t get us far in solving the real issues.

You can see this in how Netflix’s latest brushes with Verizon and Comcast are shaking out. What Verizon and Comcast have done is smart business and perfectly logical. Even as Verizon consumers in particular have reported problems streaming Netflix, neither Verizon nor Comcast appears, at least based upon current information, to have violated any law or rule or policy in dealing with Netflix. The key seems to be that Verizon and Comcast weren’t doing anything to Netflix; it seems that their beefs were instead with Netflix’s ISP. In other words, even though there was a consumer impact and it looked to some like a net neutrality battle, it wasn’t at all. Instead, this was a plain old interconnection dispute, the kind that used to get resolved relatively cleanly and clearly – even for the smallest carriers or consumers – back when we actually had rules governing how networks talked to one another. Read more

It’s Been a Big Week for Netflix

A lot going on with Netflix these days — new pricing, an opening shot in the Net Neutrality debate; I can’t seem to open up my favorite tech blogs without their name popping up.

First, this week brought a few announcements on Netflix pricing. An announcement about a price increase for new customers in Ireland, that won’t apply to existing customers for two years, brought some speculation that it could signal a similar increase in the United States. But Netflix has said that it is not considering any price increases in the United States right now, at least not for new customers.

But, CEO Reed Hastings did say on an investors conference call last Friday that some pricing-structure changes are on the way. Right now, Netflix has an $8-per-month plan that allows for two simultaneous streams and a $12-per-month plan that allows for four streams at one time. Hasting said that Netflix has been testing multiple tiers, and that the goal is to adopt three new pricing tiers that should be easy for consumers to understand. However, he insisted that the company is not in a hurry to change prices and it is just testing options for now. Read more

Netflix Testing Multi-Stream Price Structures

Netflix is reported to be conducting pricing tests that offer options beyond its standard $7.99 per month rate to stream video to two devices (such as a tablet, computer, or television) at once. In April of last year, Netflix launched an $11.99 version that allows content to be viewed on four devices at the same time. The new price tests include a $6.99 per month offer for one device, and $9.99 for three. One story indicates that the $6.99 test price is at least sometimes limited to standard definition video.

Reports say that Netflix describes the new pricing structures as nothing more than tests, which may not become available to all customers. Netflix also is said to portray the tests as a way to see if families with different viewing demands and habits would benefit from more pricing and streaming options.  However, there is a good deal of speculation that other factors are in play.

Some see the tests as lead-in to price increases. Others see it as less of a means to cater to families, than an attempt to deal with those who share their account passwords with friends. Another popular theory is that the tests are at least partly a response to competitive threats from other over-the-top video providers like Amazon Prime and Redbox Instant.

Netflix’s stock hit a new high few months ago, after recovering from a controversial (and quickly rescinded) move to split the company’s streaming and DVD-by-mail businesses back in 2011. The company’s CEO is reportedly receiving a 50% raise this year after stock prices more than tripled in 2013.

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