NTCA's The New Edge » Netflix

Verizon Subscription Streaming?

Steve Fravel — Fri, 09 Dec 2011 19:40:13 +0000

It was widely reported on December 8 that Verizon was planning a Netflix-type killer service. Described as a subscription on-demand video service featuring films and television episodes, the new service started to take on additional intrigue when it was revealed that Verizon is in discussions with RedBox.

RedBox, recognized for providing a simple, user-friendly and low-cost kiosk service, also has been rumored to have a streaming service under consideration. The Verizon element adds fuel to the probability fire. Information provided by Verizon indicates that the service will be totally Internet based and will likely support Apple’s iOS platform, Android, Google TV, XBox, Roku and other streaming boxes and browsers.

If the rumors are true that launch is planned for mid second quarter 2012, Verizon will need to get busy putting TV show deals together.

For more, see this Reuters article.

Boxee Adds Local Ability

Steve Fravel — Fri, 18 Nov 2011 19:38:30 +0000

Intent on drawing the video cord-cutting crowd to the Boxee solution, Boxee today introduced a new add-on that helps keep viewers in the Boxee box.

The new “wrinkle” is a dongle that attaches to the Boxee via USB and provides a coaxial connection to an antenna or pay-TV device. The live dongle will allow a user to integrate local broadcast signals or content from cable, satellite or telco into the Boxee experience.

According to Boxee, the majority of highly rated television programs originate on “free,” over-the-air broadcast channels. For many viewers, the all-in-one approach of Boxee integrating OTT content like Hulu and Netflix along with the over-the-air signals creates a compelling alternative to pay-TV.

Report: Netflix Accounts for 32% of Peak Internet Traffic

Jesse Ward — Mon, 31 Oct 2011 16:33:03 +0000

According to a new report Netflix accounts for 32.7% of peak downstream traffic in the United States, exceeding HTTP usage which accounted for 17.8% of the bandwidth, YouTube videos at 10% and BitTorrent file-sharing at 9%.

The 10th Global Internet Phenomena Report: Fall 2011 was released by Sandvine Inc., a Waterloo, Canada, networking equipment company. The report also offered additional insight into Internet trends:

“Real-time entertainment applications” account for 60% of peak downstream traffic on wireline networks, up from 50% in 2010.
We have entered the “post-PC era,” as the majority of real-time entertainment traffic (55%) is destined for game consoles, set-top boxes, smart TVs and mobile devices used in the home — with only 45% actually going to desktop and laptop computers over North American fixed networks.
Video in mobile networks continues to gain momentum. In North America, real-time entertainment is now 32.6% of peak downstream traffic. The largest contributor is YouTube. Other applications like peercasting PPStream and Netflix are making inroads.
“Mobile marketplace traffic” accounts for 9.4% of peak downstream usage in APAC and 5.8% in North America, led in both cases by Apple and Google. Applications such as Skype and WhatsApp Messenger, which replace the traditional revenue sources of voice and texting, are being installed by growing numbers of subscribers.

For more, see the release.

Netflix Adds Content, Discontinues Plans for Qwikster

Steve Fravel — Mon, 17 Oct 2011 15:45:59 +0000

Beginning in the Fall of 2012, Netflix will provide on-demand access to current and future programming from the CW. Warner Brothers Television and CBS announced on October 13 that they had reached agreement with Netflix on a four year on-demand deal.

“Netflix is a model that opens a new door for The CW programming to expand its audience reach through the terrific Netflix service and creates a brand-new window for CBS and Warner Bros,” said Les Moonves, CEO of CBS Inc.

Like Hulu, Netflix will be providing programming from networks after it has aired once on its originating network. It remains to be seen whether this availability begins to act as an alternative for viewers who may want to “time shift” network programs by accessing them from a source other than the network and its local affiliate.

In related news, Netflix announced on October 10 that it has discontinued plans for a separate DVD by mail service called Qwikster. Instead, U.S. subscribers will continue to use one website, one account and one password for their movie and TV watching enjoyment under the Netflix brand. In addition, Netflix announced that is “done with the price changes.”

“Consumers value the simplicity Netflix has always offered and we respect that,” said Netflix co-founder and CEO Reed Hastings. “There is a difference between moving quickly — which Netflix has done very well for years — and moving too fast, which is what we did in this case.”

Netflix Splits into Two Companies

Jesse Ward — Mon, 19 Sep 2011 17:21:32 +0000

Via a blog post issued Sunday evening, Netflix CEO Reed Hastings announced that the company has decided to split into two separate entities: Netflix for its subscription-based online streaming service and Qwikster for DVD rentals by mail.

This decision comes on the heels of a recent price hike that had Netflix subscribers taking to industry blogs to voice their frustrations with the changes. Some subscribers also canceled their subscriptions, which led to a decline in stock price.

In the same blog post, Hastings issued an apology for the company’s strategic communications errors. “I messed up. I owe everyone an explanation,” he wrote. “In hindsight, I slid into arrogance based upon past success. We have done very well for a long time by steadily improving our service, without doing much CEO communication….But now I see that given the huge changes we have been recently making, I should have personally given a full justification to our members of why we are separating DVD and streaming, and charging for both. It wouldn’t have changed the price increase, but it would have been the right thing to do.”

Moving forward, each business will have its own distinct website and subscribers will need to manage their library queues and billing information via the separate portals.

In practical terms, Qwikster will be the same familiar Web interface and DVD service that existing customers are used to. However, DVD members will now be directed to visit www.qwikster.com. The company says the new website will be up and running in a few weeks. At launch, the company also plans to improve upon the site with a video games upgrade option, similar to its upgrade option for Blu-ray but directed at those customers who want to rent Wii, PS3 and Xbox 360 games. Other improvements are said to be forthcoming.

Andy Rendich, who has been working with the DVD service for 12 years, will take the helm as the new CEO of Qwikster.

In explaining the strategic decision, Hastings said that the online company needs to focus on rapid improvement as streaming technology and the market evolve, without having to maintain compatibility with its DVD by mail service.

“For the past five years, my greatest fear at Netflix has been that we wouldn’t make the leap from success in DVDs to success in streaming. Most companies that are great at something – like AOL dialup or Borders bookstores – do not become great at new things people want (streaming for us) because they are afraid to hurt their initial business. Eventually these companies realize their error of not focusing enough on the new thing, and then the company fights desperately and hopelessly to recover. Companies rarely die from moving too fast, and they frequently die from moving too slowly.”

Hastings hinted that the company will reveal substantial new streaming content in the next few months.

For more, see this blog post.

VOTW: Amazon to Launch Netflix-Like Book Service?

Jesse Ward — Mon, 12 Sep 2011 22:12:28 +0000

And last but not least, our video of the week (VOTW): today’s CNet roundup. HP launches the TopShot LaserJet Pro printer that can scan 3D objects, Netflix finally arrives on most Android phones — stating that 82% of Android users can now watch Netflix movies on their devices — and Amazon.com is rumored to be in talks with major publishers to launch a Netflix-like service for books.

One Disc and Limited Streaming?

Steve Fravel — Fri, 09 Sep 2011 15:26:46 +0000

Nearly everyday this week there has been a short article in one of the trades trying to get the complete story straight on what it is that Netflix is or isn’t allowing in its new subscription packages.

Over the long holiday weekend, some people experienced a restriction in the number of concurrent streams they were able to view as part of their Netflix account. Apparently, upon calling Netflix customer service, subscribers were told that the new policy on the ”one disc or unlimited streaming” had a limitation on the number of streams.

According to numerous articles, Netflix officials denied that they have placed any restrictions on the accounts. Netflix spokesman Steve Swasey said in a statement that was provided to online outlets, “No Netflix member is limited to less than two concurrent streams. A few Netflix members have heard differently from us, which is an error that we are correcting.” The statement when on to describe the holiday weekend ”limitations” as being part of an isolated technical error that a few subscribers experienced.

All of this occurred right on the heels of a 60% rate increase that took effect on September 1. In an online article published by Home Media Magazine, author Erik Gruenwedel notes that in a Netflix FAQ regarding streaming restrictions on the Netflix website, the official policy for streaming “is predicated by the number of rental discs out at a time.” As described in the FAQ, if an individual subscribes to the unlimited streaming and one disc rental, there is a limit of one stream at a time.

Regardless all the confusion up to this point, whether there is a limitation to one stream or two streams, there is a limitation. Considering the recent announcement regarding the end to the Starz programming in February, Netflix subscribers will rightly have the final word.

Blockbuster To Offer Subscription Streaming

Steve Fravel — Wed, 03 Aug 2011 18:35:11 +0000

Though Blockbuster currently provides an “on-demand” streaming service, Dish Network confirmed on Tuesday that Blockbuster would begin providing a subscription streaming service. This will place it squarely in competition with Netflix.

Dish Network purchased the video rental company in April for $320 million. Blockbuster is equipped with a huge film library and a 28-day advantage over Netflix and Redbox for some new-release titles. Though no timeline was given, it is believed that the new streaming service will begin fairly soon.

Dish Network has been aggressively acquiring diverse properties over the past seven months. In addition to buying Blockbuster, Dish has spent roughly $3 billion to acquire two broadband satellite companies. According to Joe Clayton, Dish Network president and chief executive officer, Dish is committed to keeping approximately 90% of Blockbuster retail outlets open as DVD rental stores, and possibly more that include the new online streaming service.

Blockbuster’s Plan to Attract Netflix Customers

Steve Fravel — Fri, 15 Jul 2011 15:37:21 +0000

Dish Network’s Blockbuster video unit has initiated a limited-time offer targeted at Netflix customers unhappy with the recent price changes unveiled earlier this week by Netflix.

Netflix customers that sign up will get a free 30-day trial after choosing one of the two most popular Total Access plans from Blockbuster. Once the trial is over, the monthly price will be $9.99 or $14.99–depending on which package is selected from the deal that launched on Thursday. Both packages use the traditional disc-by-mail plan with the caveat that you can go to the store to exchange titles. Blockbuster also provides films via streaming through its “Blockbuster On-Demand” to Internet-enabled devices or Blu-Ray and television sets.

Blockbuster isn’t competing with the new Netflix prices but does promote several differences in the services they provide. New release films are available through Blockbuster 28 days sooner than Netflix, and they do not charge an extra fee for Blu-Ray. In addition, both of the Blockbuster plans allow unlimited exchanges in the stores for Xbox 360, Wii and Playstation 3 games, in addition to DVD and Blu-Ray films.

This special offer for Netflix customers is available through September 15, 2011, in participating stores and at Blockbuster’s website.

Netflix announced earlier this week that it will no longer offer its popular $7.99 unlimited streaming and DVD plan. Instead, the video provider will offer two separate plans covering either streaming or DVDs only, both priced at $7.99 per month. Netflix customers now have the following subscription options:

Unlimited streaming for $7.99 a month
Unlimited monthly DVD rentals by mail limited to one out at a time (no streaming) for $7.99 a month
$15.98 a month for both; or
Unlimited monthly DVD rentals with a maximum two out at a time for $11.99 a month.

The changes are effective immediately for new members and as of September 1 for existing members. Netflix charges extra for Blu-Ray.

Report: Netflix Accounts for 30% of Peak Traffic

Jesse Ward — Mon, 23 May 2011 16:46:50 +0000

Consumers watching videos on Netflix take up more bandwidth on the Internet than users of any other website or service in North America, according to a report issued last week by broadband analytics firm Sandvine. Netflix now accounts for 29.7% of peak downstream traffic, a marked increase from the 20% reported last October.

Sandvine also said that “real-time entertainment” services such as YouTube and Netflix consumed 49.2% of peak aggregate traffic in 2010, up from 29.5% in 2009 – a 60% increase. Sandvine forecasts that the category will represent 55-60% of peak aggregate traffic by the end of 2011.

Of note, peer-to-peer file sharing — a big worry just a few years ago – is a distant runner up with just 18.2% of traffic, followed by real-time communications with 16.6%. (For more, see this graphic.)

This, of course, is no surprise to broadband service providers. Sandvine has simply shed light on the growing problem of a marked increase in real-time Internet traffic combined with limited broadband capacity. In light of this report, analysts are questioning if more broadband service providers will resort to usage-based pricing and data caps.

“The information and trends in Sandvine’s Spring 2011 Global Internet Phenomena Report emphasize the need for innovative solutions to keep up with rapidly evolving consumer demands for content and connectivity,” said Sandvine President and CEO Dave Caputo. ”The dramatic growth of Netflix and its impending global expansion are prime examples of a growing appetite for real-time entertainment. It is also important for fixed and mobile broadband providers to have real-time policy control capability, made possible by insightful business intelligence, in order to put sound strategic decisions into action.”

For more, see this release.