Netflix Splits into Two Companies
Posted by Jesse Ward on Monday, September 19, 2011 · 
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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.” Read more
VOTW: Amazon to Launch Netflix-Like Book Service?
Posted by Jesse Ward on Monday, September 12, 2011 · ·
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?
Posted by Steve Fravel on Friday, September 9, 2011 · ·
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. Read more
Blockbuster To Offer Subscription Streaming
Posted by Steve Fravel on Wednesday, August 3, 2011 · ·
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.
Blockbuster’s Plan to Attract Netflix Customers
Posted by Steve Fravel on Friday, July 15, 2011 · ·
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. Read more
Report: Netflix Accounts for 30% of Peak Traffic
Posted by Jesse Ward on Monday, May 23, 2011 · ·
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.
What Will You Bid for Blockbuster?
Posted by Steve Fravel on Monday, April 4, 2011 · ·
April 4 is a big day for Blockbuster. The U.S. bankruptcy court has approved an auction where the highest bid will take the fading home video rental company. Blockbuster is currently reporting a $68.4 million loss for the first two months of 2011.
Bidders include Carl Icahn, South Korean Telecommunications company SK Telecom, Dish Network and Cobalt Video holdings, a group of hedge funds that put forward the February 21 $290 million bid.
Blockbuster is thought to be a potential “brand” for on-demand platforms sought by both SK Telecom and Dish Network. The Blockbuster licenses with movie studios and television producers would give either Dish Network or SK Telecom a competitive package to Netflix. One added advantage provided by Blockbuster is an earlier window on theatrical releases.