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Netflix to add around 700 original movies and shows to its lineup this year

The company says it will spend $8 billion on original content

Netflix plans to spend around $8 billion this year on original TV shows and movies in an effort to boost its subscriber numbers.

The increased production budget was revealed on Tuesday by CFO David Wells at the Morgan Stanley Technology, Media & Telecom Conference in California.  

Last year, the company spent around $6 billion on original content and ended the year with 117.6 million subscribers worldwide. This year, the company plans to spend even more on original content, as well as increase its marketing budget to $2 billion (an increase from $1.3 billion in 2017).

Content driving growth

Netflix’s business model of using original content to increase its number of subscribers isn’t new, but it continues to be effective.

“Let’s continue to add content -- it’s working, it’s driving growth,” Wells said at the conference.

The increased focus on marketing doesn’t necessarily mean the streaming service will be focusing less on the quality of the content it produces. “We used to think every incremental dollar was best spent on content,” Wells told Variety. Now the company thinks “marketing is a multiplier on the content spend.”

For help producing its upcoming original content, the company is bringing on big names like Duncan Jones, Ryan Murphy, Mark Millar, Martin Scorsese, David Ayer, Will Smith, and others.

Netflix will spend a fairly large portion of its $8 billion budget on international Netflix programs. The company plans to include shows from 80 countries outside of the United States, including the German psychological thriller “Dark.”

Of the company’s plans to diversify its content offerings, Wells explained, “People don’t care where the stories come from. We’re about having the best content. We don’t necessarily have to do it ourselves.”

Netflix plans to spend around $8 billion this year on original TV shows and movies in an effort to boost its subscriber numbers.The increased productio...

Netflix more widely used than DVR, researchers say

A study shows many TV services are changing the game for consumers

While it may have led to strife among couples due to “cheating” of sorts, Netflix ended 2016 on a high note among consumers. The company ended the year far ahead of its competitors Amazon and Hulu in the streaming video business, and critics have lauded its original content.

Now, new research shows that, for the first time, Netflix is even more popular among consumers than DVR or on-Demand services (VOD). An annual survey conducted by Leichtman Research Group Inc. shows that 54% of U.S. consumers now have Netflix in their household, while 53% have DVR. This is a big change from 2011, when 44% of consumers used DVR and only 28% used Netflix.

The news may be viewed negatively by traditional cable companies, which have warily regarded Netflix for some time now. However, additional findings from the study show that many TV services are changing the game and finding prominence.

"On-Demand and time shifting TV services like DVR, VOD and Netflix have permanently changed the way that people can watch TV. Today, over 50% of households have a DVR and, for the first time in the fifteen years of this study, over half of households have Netflix," said Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc.

Survey findings

While Netflix has risen above DVR and VOD, the survey shows that many people choose to combine the services for an optimal TV viewing experience. The researchers found that of the 1,211 households included in the study, 30% use two of the three choices, while 14% use all three.

Other findings of the survey include:

  • 64% of households get a subscription video on-Demand (SVOD) service from Netflix, Amazon Prime, and/or Hulu -- 51% of all adults stream any of these services on a monthly basis
  • 23% of all adults stream Netflix daily -- compared to 6% in 2011
  • 81% of Netflix streaming users watch Netflix on a TV set
  • 64% of pay-TV subscribers have a DVR -- compared to 49% in 2011
  • 60% of DVR households have DVR on more than one TV -- compared to 33% in 2011
  • 65% of all cable and Telco video subscribers have used VOD from their current provider
  • 58% of all cable subscribers used VOD in the past month -- compared to 42% in 2011

While streaming and recording video has become wildly popular, the researchers say that traditional TV viewing hasn’t completely fallen off of consumers’ radars. "Traditional TV viewing still exists. For example, 46% of adults agree that they often flip through channels to see what's on TV,” said Leichtman.

While it may have led to strife among couples due to “cheating” of sorts, Netflix ended 2016 on a high note among consumers. The company ended the year far...

'Netflix cheating' becoming more widespread, company says

Company says couples who have vowed to watch series together increasingly stray

When it comes to pressing social issues, this is probably not anywhere close to the top of the list. It might not even be on the list.

Netflix has released a new study showing 48% of the couples who are members have admitted to “cheating” on their significant other. Not sexual infidelity, mind you. They've cheated by binge-watching future episodes of a show the couple had agreed to watch together.

Netflix highlighted the “problem” in a 2014 advertising campaign, below.

The commercial was the result of a 2013 Netflix study that first identified the phenomenon of one partner watching ahead without telling the other. Since then, Netflix says the practice has increased 300% and is now a common thing among couples sharing a Netflix account.

The urge to cheat

“The urge to cheat starts slow, and before you know it the rush to watch ahead is too irresistible – the white lies and excuses become part of the game,” Netflix said in a press release. “This behavior only continues to grow with 63% of American cheaters admitting they'd cheat more if they knew they'd get away with it.”

The company says binge-watching makes cheating more prevalent because it's easy to say “just one more.”

“We're human, the more attractive the show - the more the eye will stray,” the company said.

Netflix says its survey shows the U.S. doesn't have the most cheaters. That honor goes to Brazil, followed closely by Mexico.

What about the country where couples are most likely to honor their vow to only watch together? According to Netflix, the Netherlands has the most loyal viewing couples, followed by Germany and Poland.

When it comes to pressing social issues, this is probably not anywhere close to the top of the list. It might not even be on the list.Netflix has relea...

Why Netflix reigned supreme when it came to original content in 2016

Researchers say the quantity and quality of the company's content pushed it above its competitors

TV fans have had plenty to celebrate in recent years. With the emergence of streaming video, consumers are now able to watch what they want whenever they want, and the trend has even allowed some platforms to invest in creating their own original series.

The three big names that come to mind these days are Netflix, Amazon, and Hulu – all of which run their own streaming service and produce their own shows and movies. However, a recent study conducted by Parrot Analytics shows that one brand outperformed the other two by leaps and bounds when it came to original content in 2016.

The report shows that demand for Netflix original content was eight and nine times greater than the demand for Amazon and Hulu, respectively. Other services lower on the totem pole, such as Crackle, had demand that was 60 times lower than Netflix.

Quality and quantity

So, what is it that makes Netflix so much more popular with consumers? Researchers at Parrot say a big part of it has to do with the sheer amount of content the brand produces. The release of catchy new series at different times of the year shored up Netflix’s numbers and added to its popularity.

“Netflix’s true strength is in its constant production and release of new, buzzy content: After the premiere of Stranger Things in week 28, demand increased to new heights. Other new hits such as Marvel’s Luke Cage in week 39 and The OA in week 50 continued to build on this popularity, leading Netflix to end the year with over 2.7 times more demand than the other three platforms combined,” the report states.

However, the researchers say that Netflix’s success last year wasn’t all due to quantity. Many of its most popular series also continue to rake in views from consumers at great levels.

“Netflix’s veteran titles still attract significant amounts of demand, such as the peak in March (weeks 9-13) from the fourth season of House of Cards and the second season of Marvel’s Daredevil,” the firm points out.

The researchers measured the popularity of each platform through Demand Expressions. This involved collecting and analyzing cross-platform, country-specific measurements for video streaming, social media activity, photo sharing, blogging, comments on fan and critic platforms, and download and streaming rates. 

Photo via TwitterTV fans have had plenty to celebrate in recent years. With the emergence of streaming video, consumers are now able to watch what th...

Netflix users can now download shows and movies to watch later

The company says the offline viewing feature is perfect for consumers without a reliable internet connection

Earlier this month, we reported that Netflix was mulling over the possibility of an offline viewing feature. The company had stated that it was thinking of providing the service for low-speed areas across the world that rely more on downloading content.

It certainly wasn’t the first time that such a feature had been considered by the company. Users have been asking Netflix to include offline viewing capabilities for some time now, but company officials weren’t completely sure how to handle storage or whether it would be worthwhile endeavor.

But in an announcement today, Netflix said that an offline viewing feature is now available for users of the company’s app.

“While many members enjoy watching Netflix at home, we’ve often heard they also want to continue their Stranger Things binge while on airplanes and other places where Internet is expensive or limited. Just click the download button on the details page for a film or TV series and you can watch it later without an internet connection,” the company said.

How it works

According to the company, many popular TV series are already available for download. Users simply have to make sure that they’re running iOS 8.0 or later or Android 4.4.2 or later on their devices and that their Netflix app is updated to the most recent version.

Gizmodo reports that the amount of storage space that will be needed varies depending on the show or movie that is being downloaded. The site says that a 1 hour and 3 minute show takes up about 280 megabytes in standard definition and about 440 megabytes in high-definition. If you’re planning to binge watch many shows, you’ll likely need gigabytes of storage space.

Keep in mind that shows and movies should be downloaded before a long trip since doing so without an internet connection will eat up about as much data as streaming the content would. Netflix hasn’t released what kind of file type videos are saved as, but early indications suggest that they are not viewable from a laptop or other device; downloaded videos can only be accessed through the Netflix app.

Downloads do have an expiration date as well. TV shows and movies expire after seven days, and some exclusive content expires 48 hours after you start watching it. Users can see how much time they have left by checking the “My Downloads” section of their Netflix app.

For more information on how to download content, Netflix says to visit its Help Center here.

Earlier this month, we reported that Netflix was mulling over the possibility of an offline viewing feature. The company had stated that it was thinking of...

Netflix mulling over the possibility of an offline viewing feature

However, U.S. consumers likely won't be the first ones to get access to it

For many consumers, having a dead internet or cable connection is a good way to ruin an evening. Thankfully, many services -- including Amazon Prime, Google Play, and iTunes -- allow users to access content offline by downloading it.

It’s a feature that fans of the entertainment service Netflix have been wanting for some time. And, in an interview yesterday with CNBC, Chief Content Officer Ted Sarandos indicated that the company was mulling over the possibility of providing. However, U.S. consumers shouldn’t get too excited by the news just yet. Sarandos said that the feature would first come out in areas that don’t have high internet speeds.

“We still think for the developed world our thesis has been true but I think as we get into more and more [of the] undeveloped world and developing countries that we want to find alternatives for people to use Netflix easily,” he said in an interview.

Catering to low-speed areas

So, what does this mean for Netflix users? It’s likely that the company is trying to cater to each region to use the service. For developed areas that can support the streaming service, it makes good business sense to keep the service online. However, for areas that require more offline capabilities, Netflix will be trying to step up to meet those needs.

“We have talked a lot about this over the years and our belief is that broadband and Wi-FI become more and more ubiquitous, available in more and more places that you are, more and more minutes of the day,” explained Sarandos.

“Now as we’ve launched in more territories … They all have different levels of broadband speeds and Wi-Fi access. So in those countries they have adapted their behaviors to be much more of a downloading culture. So in those emerging territories it starts to become a little more interesting.”

Haven't we heard this before?

This isn’t the first time the Netflix has brought up the possibility of an offline viewing feature. Back in April, after the release of Amazon’s Prime Video service, rumors circulated that the company was on track to make such a move. However, logistical concerns were an issue.

“You have to remember that you want to download this thing. It’s not going to be instant, you have to have the right storage on your device, you have to manage it, and I’m just not sure people are actually that compelled to do that, and that it’s worth providing that level of complexity,” said Netflix Chief Product Officer Neil Hunt in a past interview.

Whether the company has found a way past these hurdles, and whether it will be worth it in all markets, remains to be seen. 

For many consumers, having a dead internet or cable connection is a good way to ruin an evening. Thankfully, many services -- including Amazon Prime, Googl...

Netflix considers adding an offline viewing feature

Pressure from price increases and competition may lead to its adoption

Netflix has become a consumer favorite for the streaming service that it provides, allowing subscribers to watch videos on its network for a monthly fee. Although it is still very popular, the company does have a few things to worry about.

Amazon has recently stepped up its game and will be offering Prime Video as a standalone service that consumers can purchase on a monthly basis – a direct challenge to Netflix. Older Netflix subscribers are also looking at a price hike, a change that will bring the cost of their subscriptions in line with new subscribers at $9.99 per month. Until now, these older subscribers were only paying $7.99 or $8.99 per month.

“We will phase out this grandfathering gradually over the remainder of 2016, with our longest-tenured members getting the longest benefit,” said the company in a letter to shareholders.

Offline viewing

In order to assuage some of the worries that consumers may have, it seems that Netflix is considering something that it has shied away from in the past: offering an offline viewing feature. According to a report by MarketWatch, the company is keeping an open mind about making the feature available.

“We have been focusing on the click and watch, and the beauty and simplicity of streaming. But as we expand around the world where we see an uneven set of networks, it’s something we should keep an open mind about,” said CEO of Netflix Reed Hastings.

The possible change would allow much more flexible viewing options for consumers. Currently, subscribers need to have an internet connection to gain access to the streaming service, but this would no longer be a requirement with offline viewing.

Content like TV shows and movies would just need to be downloaded to user devices ahead of time so that they could be accessed without an internet connection. It's something that many consumers are used to if they want to watch something while on an airplane.

In the past, Netflix had avoided offline streaming because they thought that it was too complex.

"You have to remember that you want to download this thing. It's not going to be instant, you have to have the right storage on your device, you have to manage it, and I'm just not sure people are actually that compelled to do that, and that it's worth providing that level of complexity," said Neil Hunt, Netflix's Chief Product Officer, in an interview with Gizmodo last September.

Well, it looks like it might be worth it now.

Netflix has become a consumer favorite for the streaming service that it provides, allowing subscribers to watch videos on its network for a monthly fee. A...

Netflix ending relationship with major movie provider

Will focus instead on exclusive content

Netflix subscribers will notice that some recently released Hollywood blockbusters will disappear from the on-demand line-up soon.

The company has announced it is ending its relationship with Epix, the cable network that holds the rights to popular movies like Hunger Games: Catching Fire, World War Z, and Transformers: Age of Extinction.

The movies go away at the end of September when the Epix contract with Netflix expires. But if you think it is Epix that is pulling the plug on Netflix, then you would be mistaken.

Focusing on exclusive content

In an announcement Sunday, Netflix Chief Content Officer Ted Sarandos said Netflix has chosen not to renew its agreement because Epix movies are available from other providers. It's part of the company's strategy to focus on original and exclusive content.

It appears to be a very different situation from four years ago, when Netflix was primarily an on-demand movie service heavily dependent on Starz Entertainment's vast library. In September 2011, Starz announced it would not renew its contract with Netflix.

Netflix was willing to pay Starz's price for the movies, but that was not the issue. The issue, apparently, was that Netflix did not charge consumers enough to view the content.

“This decision is a result of our strategy to protect the premium nature of our brand by preserving the appropriate pricing and packaging of our exclusive and highly valuable content,” Starz CEO Chris Albrecht said at the time. “With our current studio rights and growing original programming presence, the network is in an excellent position to evaluate new opportunities and expand its overall business."

Starz also licensed its content to cable TV providers, who charged a lot more for their services. The implication being that allowing Netflix to provide access to movies at $8 a month was a threat to services charging 10 times that amount.

Turning lemons into lemonade

Then an unexpected thing happened. Netflix did not crumble as perhaps many in the industry hoped it would. It began buying up rights to TV series – the only content it could find to replace the lost movies. Subscribers seemed to embace it.

“Binge watching” entered into the common vocabulary, as viewers would sit down and watch an entire season of a series in a weekend. It helped that many of the series that were available, like “Breaking Bad” and “Mad Men,” were of higher quality than most movies.

Since then, Netflix has more or less redefined itself and now has an emphasis on original programming, with series like the award-winning House of Cards and Orange is the New Black. Sarandos says the emphasis on original content will continue, and will also extend to feature films.

“Just like we’ve changed the game for TV watchers by releasing entire seasons around the world at the same time, we have begun making movies that will premiere on Netflix globally and in some cases, simultaneously in theaters,” Sarandos wrote in a blog post. “It will take us time to build a robust slate of original movies, but we’re hard at work on it with such great stars and directors as Brad Pitt, Ricky Gervais, Judd Apatow, Angelina Jolie, Sofia Coppola and Adam Sandler.”

Meanwhile, Epix films will be available elsewhere. The company signed a deal with Amazon Prime in 2012 and will begin distributing content through Hulu in October.

Netflix subscribers will notice that some recently released Hollywood blockbusters will disappear from the on-demand line-up soon.The company has annou...

Marriott switching over to Internet-connected TVs

But the surfing choice is limited to Netflix

In another sign that watching TV online has become mainstream, Mariott Hotels has announced it will begin replacing guest room TV sets with Internet-connected sets.

A press release announcing the move emphasizes a relationship with Netflix, noting guests will be able to watch Netflix content on TV sets in their rooms when they travel. However, Marriott isn't providing a Netflix subscription, only a way to watch it.

Smart TVs, connected to the Internet, will replace those that just offer typical cable channels. To watch Netflix, guests must access their own accounts or subscribe.

According to the press release the Internet-connected TVs will have the Netflix app. Presumably there will not be apps for Netflix competitors and no way to view other Internet content.

Changing consumer preferences

“Our collaboration with Netflix responds to changing consumer preferences in the way our guests access and watch content, while recognizing the leading role Netflix is playing in driving this transformation,“ said Matthew Carroll, vice president brand management, Marriott Hotels. “Because consumers are choosing to take their streaming content with them when they travel, Marriott Hotels is making the industry’s first rollout of Netflix a priority.”

While Marriott isn't exactly making everything on the Internet accessible through in-room TVs, it's a big step for any hotel chain. Many hotels, after all, sell premium content to guests. Watching Netflix for free could be stiff competition.

With the agreement, Marriott says it is the first hotel brand authorized to offer guests direct access to their Netflix accounts as part of its guest room entertainment offering. Netflix is currently available at 6 Marriott properties, with 6 more launching this summer.

All hotels by the end of 2016

The hotel plans to expand Internet TVs to 100 of its properties by the end of 2015, and to nearly all of its more than 300 properties in the U.S. by the end of 2016.

Marrriott says Internet TVs have been installed at:

  • New York Marriott East Side
  • San Jose Marriott
  • Princeton Marriott
  • Newport Marriott
  • Dallas/Fort Worth Marriott Solana
  • Bethesda Marriott Suites

The next properties to get Internet TVs are:

  • Marriott Marquis Washington, DC
  • San Francisco Marriott Marquis
  • Atlanta Marriott Marquis
  • Dayton Marriott
  • San Juan Marriott Resort & Stellaris Casino
  • Anaheim Marriott

The company says guests staying multiple days only have to login to their accounts once throughout their stay. When guests checkout, it says all account information is wiped clean from the televisions.

Marriott said a report from Accenture, showing more than half of U.S. consumers watch Internet television, was persuasive in moving it in that direction. In testing at hotels, the number of guests using any of the Internet apps on the guest room televisions was as high as 26%, depending on the property.

In another sign that watching TV online has become mainstream, Mariott Hotels has announced it will begin replacing guest room TV sets with Internet-connec...

Redbox has big plans ... for price increases

Rental rates for DVDs, Blu-ray Discs, videogames headed skyward

You've got to hand it to Redbox. It thinks big. And right now it's thinking of big price increases in the DVDs, Blu-ray Discs and videogames it rents from its familiar big red boxes.

On Dec. 2, the daily price of a DVD rental will go from $1.20 to $1.50 and a Blu-ray Disc will from from $1.50 to $2. In January, daily rental rates for videogames will go from $2 to $3. 

“With new-release movies for $1.50 a day, Redbox remains the best value in new-release home entertainment,” CEO Scott Di Valerio said in a statement. “The pricing adjustments announced today will allow Redbox to continue to offer consumers high quality movies and games while making investments to enhance the customer experience.”

The company said it has conducted extensive market testing over the last few months and is confident the increased revenue will exceed any losses in market share. However, Redbox caters to lower-income customers who can't afford cable or satellite hook-ups, so it's always possible the big red box may hit a big red wall if it gets too aggressive with its pricing. 

Redbox operates vending kiosks at more than 35,000 locations, including gas stations and grocery stores, as well as at some Walgreens, Walmart and McDonald’s locations.

The company says that besides raising prices, it is starting a new "recommendation engine" that will help customers find movies that they're likely to enjoy. It's said to be similar to the algorithms used by Netflix, Amazon and other companies that offer suggestions based on past buying habits. 

You've got to hand it to Redbox. It thinks big. And right now it's thinking of big price increases in the DVDs, Blu-ray Discs and videogames it rents from ...

HBO plans standalone streaming service for cord-cutters

The premium pay channel is the last tie binding many consumers to cable

There's just one thing that keeps many consumers from giving their cable TV service the heave-ho. And that, of course, is HBO. But that won't be true much longer.

HBO CEO Richard Plepler said today the premium pay-TV channel will launch a standalone, online streaming service next year, aimed at the 10 million people who have broadband but don't subscribe to a cable TV service.

“That is a large and growing opportunity that should no longer be left untapped,” he said, according to The Wall Street Journal. “It is time to remove all barriers to those who want HBO. So, in 2015, we will launch a standalone, over-the-top, HBO service in the United States.”

Plepler was speaking at a Time Warner investor day meeting. He didn't offer any details about pricing.

While this will be good news to many consumers, it's likely to make the day a little more dreary over at Comcast, Charter, Cox, et al. It puts Netflix on notice that it has some serious competition. Amazon has produced a few standalone shows but Netflix has basically had the premium content field to itself until now.

There's just one thing that keeps many consumers from giving their cable TV service the heave-ho. And that, of course, is HBO. But that won't be true much ...

Verizon and Netflix lash out over connection speeds

Are connections too slow? And who is to blame? Depends who you ask

Whatever your personal opinion of the latest brouhaha between Netflix and Verizon (which we'll explain in a moment), there's probably a high correlation between that and your opinion regarding the “net neutrality” debate.

If you support “net neutrality,” the idea that Internet providers (like Verizon) should treat all content equally regardless of its source (like Netflix), chances are you side with Netflix over Verizon in this latest dispute.

Consumers rate Verizon Fios

But if you oppose the idea of net neutrality — most likely, because you say “Streaming sites like Netflix and YouTube consume the majority of broadband bandwidth, so it's only fair they should pay extra to ensure their content comes through in a timely manner” — then your sympathy likely lies with Verizon.

However, if you counter “It's not Netflix or YouTube using bandwidth — it's their viewers, i.e. Internet customers, who are already paying Verizon or Comcast or whoever for their Internet connections,” then you again likely favor net neutality and sympathize with Netflix, whether you're a subscriber or not.

Jerky movies

Here's what's going on: certain customers have apparently complained of low speeds on their Netflix accounts, because Netflix started sending customers messages blaming those slow speeds on Verizon. Verizon got upset and sent Netflix a very long cease and desist letter demanding it stop blaming the problem on Verizon.

Netflix responded with a very brief letter refusing to comply:

This is about consumers not getting what they paid for from their broadband provider. We are trying to provide more transparency, just like we do with the Netflix ISP Speed Index, and Verizon is trying to shut down that discussion.
We are testing ways to let consumers know how their Netflix experience is being affected by congestion on their broadband provider’s network. At present, we are testing in the U.S. in areas serviced by many broadband providers. This test started in early May and it is ongoing.
Our test continues.

Last February, Netflix agreed to pay extra money to Comcast, to ensure that Netflix customers with Comcast connections would not suffer from slow ones.

And Netflix recently made a similar deal with Verizon, meaning that in theory, Verizon customers who stream Netflix videos should enjoy nice seamless connections.

Whether this recent Netflix vs. Verizon skirmish is in any way related to (or in violation of) such agreements remains to be seen.

Whatever your personal opinion of the latest brouhaha between Netflix and Verizon (which we'll explain in a moment), there's probably a high correlation be...

Netflix plans a price increase, at least for new customers

New customers will pay $1 to $2 more per month

You have to admit it -- at $7.99 or so a month for most subscribers, Netflix is a bargain. Don't believe it? Look at your cable bill and compare it to Netflix -- $110 or so versus less than $10. 

Given the disparity, Netflix is thinking it's time to raise the rate a dollar or so, at least for new customers. After all, with 48.4 million subscribers, it has a pretty solid base of subscribers.

Those current subscribers won't see an increase for another year or two, according to Netflix CEO Reed Hastings, who reported higher earnings and subscriber growth for the first quarter. 

Netflix has been holding the line on prices while continuing to spend heavily licensing existing TV and movie fare and producing its own original series, including the smash hits "House of Cards" and "Orange Is the New Black."

Three years ago, the company split its mail and streaming businesses, resulting in a large increase for customers who wanted both, generating serious pushback from consumers. 

Hastings said proceeds from the higher subscription fee will be used to help pay for more original content. 

Opposes Comcast merger

Hastings also announced his opposition to Comcast's proposed merger with Time Warner, saying it would give Comcast the ability to control broadband to a majority of American homes. He said Comcast is "already dominant enough."

Netflix and other content providers have been at war with cable and telecom companies that have sought to extort money from the program providers in exchange for not throttling their access to viewers.

“The combined company would possess even more anti-competitive leverage to charge arbitrary interconnection tolls for access to their consumers,” he said in a letter to shareholders.

You have to admit it -- at $7.99 or so a month for most subscribers, Netflix is a bargain. Don't believe it? Look at your cable bill and compare it to Netf...

Beware the Netflix phishing scam

That email isn't really from Netflix. Here's how you can tell

Ever heard the saying “Don't call us; we'll call you?” In everyday social situations that is an appallingly rude attitude to take. But on the Internet it's basic self-preservation — assuming you change “call” to “contact.”

For example: if you are a Netflix customer, it's perfectly fine if you wish to contact Netflix because you think you're having a problem. But if Netflix contacts you about a problem — don't believe it. Chances are it's not really Netflix, but a sleazy would-be thief impersonating Netflix in the latest attempt at a phishing scam.

Security blogger Jerome Segura of Malwarebytes discovered the latest Netflix-flavored phishing scam, which at heart is the same as any phishing attempt: a would-be hacker poses as a business or financial institution – Netflix, Microsoft, your bank or cell phone company or anyone else – and asks for your account numbers, passwords and other information identity thieves find useful.

Hacker bait

Segura pretended to “fall for” the Netflix phishing scam, with a computer he'd specifically set up to be used as hacker-bait. (Which is another way of saying: do not try this at home, or at work, with your own computer.) The phishers, whose IP address traced back to somewhere in India, took full control of Segura's computer and stole copies of files with names like “Banking2013” -- nothing any legitimate Netflix IT guy would need to see, in other words.

Segura posted screenshot highlights, along with a full seven-minute video of the phishers' trip through his bait-computer files, on Malwarebytes.

But suppose that you, unsuspecting, received the same bait email Segura got, and furthermore suppose you decide to ignore the “Don't call us; we'll call you” rule of Internet scam protection. Or maybe you're just legitimately scared – “Gee, maybe there is something wrong with my Netflix account, and the company really is trying to warn me about it!” What can you do to protect yourself?

Easy: if you want to contact Netflix (or any other company in existence) because you're worried about a possible warning email or phone call or text message allegedly from that company, do your own independent online search for the company's contact information, rather than accept the information offered in the email.

When Segura got that fake Netflix phishing message, for example, it urged him to call a certain 1-800 phone number, allegedly for Netflix's “Member services.” But if you go to Google and search for “Netflix member service number” (without quotation marks), you will discover that, in Netflix corporate terminology, there is no such thing as a “Member service number,” although there is a “Customer service number,” 1-866-579-7172, which is completely different from the number the phishers asked Segura to call.

Ever heard the saying “Don't call us; we'll call you?” On the Internet it's basic self-preservation...

Netflix in talks with Verizon, AT&T

Online entertainment service dips into its cash drawer to keep the video streaming

It was just yesterday that Netflix agreed to pay an undisclosed fee to Comcast to ransom its video streams and now Verizon and AT&T have their hands out.

The big telecom and cable companies have been keeping their fingers on the spigot lately, throttling Netflix as part of a scheme to create a new revenue source.

Carriers have not previously charged content creators for what would once have been called "trunk" traffic, being content merely to charge for last-mile connections. But with Netflix accounting for more than half of overall traffic on the Internet at peak viewing times, the temptation is just too great.

Verizon CEO Lowell McAdam and AT&T spokesman Mark Siegel both say that their companies are talking with Netflix to, as Siegel put it, "establish a more direct connection between our networks," Reuters reported.

Netflix didn't directly confirm that talks but said it talks to major ISPs all the time "to make sure Netflix users get the best possible experience."

A dangerous precedent

It sounds harmless to slap a surcharge on Netflix which is without question one of the biggest if not the biggest user of broadband capacity but it also establishes a precedent for charging content providers based on how much bandwidth they consume.

What does this sound like?

If you said "long distance," you're right. The legacy telephone companies -- Verizon and AT&T -- have nightly dreams in which they magically find a way to reimpose time- and distance-based charges on everyone who uses the Internet.

It's not much of a stretch to say that all content providers should pay for the bandwidth they burn up each day, which would pretty much be the end of the Internet free-for-all, many analysts think.

Verizon CEO: We Expect A Deal With Netflix (CNBC)Verizon Communications CEO Lowell McAdam said Monday that he expects to reach an agreement with Netflix th...

Verizon, Netflix at odds over Internet traffic jam

Lots of consumers watch Netflix, which Verizon thinks entitles it to more money

You could see this coming. Like a, well, house of cards, the Internet is a complex structure that works surprisingly well, considering how many players are involved in stitching the whole mess together from one millisecond to the next.

There's been this little issue called "net neutrality" that's been around forever but of interest only to the technocentric. It's about to become a lot more interesting to everybody.

Here's why: Irked by the success of Netflix and the amount of traffic it pours onto the net each day, Verizon and other carriers are demanding that Netflix pay them a premiuim for transmitting that traffic. A report in today's Wall Street Journal quotes Netflix as saying its average prime-time speeds dropped by 14% last month, just as the hit series "House of Cards" returned for its second season on Netflix.

Being throttled?

Consumers rate Verizon Fios

Verizon customers who pay $70 or more for "unlimited" FiOS broadband Internet service are becoming very familiar with the little "loading" graphic that appears much more frequently lately, when the video and audio pause because of network congestion -- or, as conspiracy theorists suggest -- purposeful throttling.

One longtime FiOS customer in the Washington, D.C., area said he had never seen the "loading" graphic on Netflix until this month. 

Why now? One potential explanation is that a federal appeals court ruled last month that the Federal Communications Commission (FCC) does not have the authority to impose net neutrality rules requiring that Verizon and other carriers treat all traffic equally.

The idea behind the Internet when it was founded was that everyone could transmit and receive data on an equal basis, limited only by the speed of their local connection to the Internet. 

Disappointed Dilberts

Telephone and cable companies -- who once imagined that they would be the movie and entertainment titans of the future -- find this irksome and have been arguing that major content distributors like Netflix should pay more for using so much bandwidth.

The content distributors reply that they pay millions of dollars for their Internet connections, while consumers collectively pay millions for their local connections through Verizon and other companies and that the "backbone" costs are the responsibility of the carriers. (This is vastly oversimplified but a more detailed explanation quickly becomes yawn-inducing).

An argument conveniently overlooked by the carriers is that if Netflix suddenly went away, most of its subscribers would likely switch to Hulu, Amazon Prime and other video distributors, generating just as much traffic as currently exists but perhaps spreading it out over more distributors.

While technically, backbone issues aren't covered by net neutrality -- which formally applies only to "last mile" service -- the debate over who pays for heavy video usage is only likely to get worse and seems certain to play a role in the Comcast-Time Warner merger, which would create a broadband collossus with a great deal of power over what consumers are able to see ... and how many "loading" graphics they have to endure in the process. 

You could see this coming. Like a, well, house of cards, the Internet is a complex structure that works surprisingly well, considering how many players are...

Huge surprise: Netflix says "binge watching" common among TV viewers

Watching as little as two episodes in a single sitting is defined as "binge watching."

It’s a fact of life that a person who reaches a certain age will start feeling strange new urges and desires — specifically, the desire to bore the heck out of younger people via long-winded tales on the theme, “We sure had it rough compared to kids these days.”

This is easy for folks who grew up during truly tough times like the Great Depression or World War Two, but later generations are reduced to complaints like, “When I was your age, if we wanted to watch a movie for the second time we had to wait up to four minutes for the videotape to finish rewinding.”

Luckily, Netflix provided new old-times complaint fodder this week, in a press release titled “Netflix Declares Binge Watching is the New Normal,” a long, detailed and statistics-packed article that boils down to “People who rent an entire season of a TV series they like rarely limit themselves to watching only one episode at a time.” (Note to young people: you don’t appreciate how good you have it. Why, when we were your age, we couldn’t watch previous seasons of TV shows at all unless the reruns went into syndication — and even then, we were lucky if we could see one episode per day.)

"Binge" defined

Anyway, according to the press release (which in turn discussed the results of a survey of TV-viewing habits): “A majority (73%) defined binge watching as watching between 2-6 episodes of the same TV show in one sitting.  And there's no guilt in it.  Nearly three quarters of TV streamers (73%) say they have positive feelings towards binge streaming TV.”

If watching a mere two episodes in a single sitting entails “binge” watching of a show, then it’s no surprise the majority of people with DVDs of TV shows deem themselves “binge” watchers.

In fairness, though, there was more to the press release than standard pro-Netflix advertising. The company spoke with a cultural anthropologist named Grant McCraken, who concluded that, due to changing times and the stresses of daily life, especially in this economy, “I found that binge watching has really taken off due to a perfect storm of better TV, our current economic climate and the digital explosion of the last few years. But this TV watcher is different, the couch potato has awoken. And now that services like Netflix have given consumers control over their TV viewing, they have declared a new way to watch. …. Getting immersed in multiple episodes or even multiple seasons of a show over a few weeks is a new kind of escapism that is especially welcomed today.”

So, surprise: TV viewers with the option to choose what they watch, when they watch it and how many episodes they watch at once turn out to adopt viewing habits very different from TV viewers back in the days when your viewing options were limited to “whatever’s airing on TV right now.”

In today’s changing times you might not have control over the big things in life, like your job, family and finances, but thanks to services like Netflix you do have control over what you watch on TV.

It’s a fact of life that a person who reaches a Certain Age will start feeling strange new urges and desires—specifically, the desire to bore the heck out ...

Netflix revamps to go after cable

New format provides improved display on TVs, tablets, smartphones

Netflix has a new look -- one it hopes will better lend itself to viewing on TV screens instead of smaller tablet and smartphone screens. 

"Our members collectively watch more than a billion hours of Netflix a month, most of that is on a TV," said Netflix Chief Product Officer Neil Hunt. "This is the biggest change to the Netflix experience on televisions in our history, making it even easier to find something great to watch on Netflix."

The new design was created specifically for the big screen, featuring multiple cinematic images for each title along with a new, snappy description and more personalized detail on why Netflix suggests it, the company said. 

The new format also lists Facebook friends of each subscriber who have already watched each programme, if a subscriber has paired their Netflix account to the social network.

The new TV experience is delivered by a new Netflix software platform that runs efficiently on various devices, from low-powered set top boxes, recent model Smart TVs and Blu-ray players to high-end game consoles. Previously each device had its own Netflix experience, which meant features took longer to roll out across devices. The Netflix website remains unchanged.

"This new software platform will allow us to innovate even faster and continuously improve the Internet television experience for our members across multiple devices," said Hunt.

The new format launches today and will be rolled out to all members globally within two weeks. Devices that will support the new experience include PlayStation 3, PlayStation 4, Xbox 360, Roku 3, newer Smart TVs and recent Blu-ray players. Additional devices, including other Roku boxes, will be added at a later date.

Eating cable's lunch

Netflix, whose share price has more than trebled this year, is fast becoming a major threat to pay-per-view channels and premium cable channels. It already has than 30 million subscribers in the U.S. - surpassing that of HBO's older pay-per-view channel - and 1.5 million in Britain.

Netflix and other streaming video services are in the right place at the right time to grab the loyalty of younger consumers. Millennials -- the 18-to-24 group -- are dropping their TV remote controls at a faster rate than any other demographic, according to new research expected to be released this week by digital ad firm YuMe and the IPG Media Lab, Online Media Daily reports.

The Millennials are making video viewing a more personal experience, preferring tablets and smartphones to large-screen TVs, the study finds; they consume the majority of their video content via smartphone (about 20%); just over 15% via tablet devices; just under 15% via PC; less than 10% via live TV; and less than 7.5% via DVR devices.

Film streaming service Netflix is redesigning the way it appears on TVs in a bid to compete on the level of full-scale cable TV providers and pay-per-view....

Netflix adds profile feature to user accounts

Now Dad won't have to wade through the recommendations based on his teen daughter's recent viewing

Netflix is adding a profile feature to user accounts, making it easier to avoid wading through recommendations aimed at other family members. 

Starting today, Netflix members can create a separate "profile" for each member of their household, who will each see a personalized experience based upon their individual watching habits, their personal favorite shows, and favorite genres, all driven by Netflix recommendation technology, the company said. 

Each account can have up to five profiles at no extra cost.

And, of course, like just about everything today, each profile can be connected to a different Facebook account, providing friends-based suggestions and further personalizing the discovery experience. It will also be easier to enter Netflix Kids, an area with titles appropriate for those 12 and under.

"We continually innovate and are proud to deliver an even better, more personal Netflix experience," said Netflix Chief Product Officer Neil Hunt. "Now everyone in your home can have their own Netflix experience, built around the TV shows and movies they enjoy. No longer will your Netflix suggestions be mixed up with those of your kids, a significant other, roommates, or house guests."

Profiles starts rolling out on Netflix globally on Aug. 1 and will be available to all members within two weeks.  New members can add profiles for each member of their family while signing up for Netflix, and existing members can create additional profiles at any time on the Netflix website or on PlayStation 3.

Profiles can be accessed on most devices that support Netflix, including the Netflix website, PlayStation 3 and Xbox 360, iPad, iPhone, Apple TV and most smart TVs.  Additional devices will be added over the coming months.

NASDAQ: NFLX), the world's leading Internet television network, today introduced "Profiles," a new feature that makes it easier for everyone in the...

Netflix wading deeper into original content

Arrested Development is deemed a success, though the reviews are mixed

Viewers once waited anxiously for the season premier of a much-loved TV series. But subscribers to online video streaming services now wait for an entire season, in one gulp.

Such was the case Sunday when Netflix debuted Season Four of the groundbreaking comedy series, "Arrested Development." The series, cancelled by Fox in 2006, was brought back to life by Netflix, which released the entire season instead of dribbling the episodes out one per week, as network television does.

Netflix had been offering the first three seasons for some time, helping to grow the audience for what is becoming a cult classic. Aside from being a risky venture – producing original content – Netflix chose to revive a series that has been dormant for seven years.

White hot hype

The gamble paid off initially. The return of "Arrested Development" generated white hot hype, including a marathon all day Saturday on the cable channel IFC. However, the reviews of season four of the series – and a sizable chunk of viewers has already viewed the entire season – have been lackluster to say the least.

So much so that it affected Netflix stock this week. Shares were pummeled, losing more than six percent of their value. Market analysts were counting on the return of "Arrested Development" to spur sales of Netflix subscriptions. The company may enjoy a pick-up in business but the Street has decided that is far less certain.

But Netflix appears undeterred. In interviews this week, company CEO Reed Hastings opened the door to produce additional seasons of "Arrested Development," but said it will ultimately be up to the cast.

Whether Netflix brings "Arrested Development" back for an encore or not, it appears to be committed to producing original content, with Hastings telling one interviewer that his company could be the next HBO.

House of Cards

In January, Netflix launched "House of Cards," an original series starring Kevin Spacey and Robin Wright as a Washington, D.C., power couple, doing whatever it takes to get to the top. The series appears to have been both a critical and popular success, though Netflix doesn't release viewership data.

Moving into original content is actually a self-preservation move since Netflix faces more competition for content. In 2011 Starz Entertainment announced it was not renewing the lease on its movie catalog because Netflix didn't charge enough for access to its content.

Now, there are more TV shows than movies on Netflix's streaming service and the new content appears to have found a ready audience, though not all viewers are sold. Linda, of Atlanta, Ga., says the movies she wants to watch are not available for streaming.

Not so good reviews

“In fact, all I can find is 2-3 year-old first run movies and occasional newer movies that must have bombed out in theaters before anyone ever heard of them,” she writes. “Sorry. Not worth it.”

“Netflix is affordable and it has many shows and movies for everyone,” writes Dina, of Brooklyn, N.Y. “However, they neglect some of their categories such as Anime. They need to fairly add new shows in all sections.”

“We are so disappointed with the selection of old movies and TV shows available,” Debra, of Minneapolis, Minn., chimed in. “These are not second run in our view, more like fourth, fifth or worse.”

It's not that Netflix is cheap. The company would surely like to purchase access to more movies. But with Amazon Prime and Hulu Plus becoming bigger competitors, and distributors reluctant to provide content for a service that costs just $8 a month, the content is increasingly hard to come by.

Viewers once waited anxiously for the season premier of a much-loved TV series. But subscribers to online video streaming services now wait for an entire s...

Netflix agrees to settle privacy suit for $9 million

Suit claimed the video rental service unlawfully retained consumers' viewing histories

Netflix will pay $9 million to resolve a privacy case that began in 2011. U.S. District Court Judge Edward J. Davila in San Jose, Calif., has granted final approval in the case that charged Netflix with retaining consumers' viewing histories and other personal information.

Plaintiffs Jeff Milan and Peter Comstock filed suit in early 2011 alleging violations of the Video Privacy Protection Act (VPPA), recently amended to allow wider sharing of viewing information. A wave of similar suits followed and the court consolidated the cases. After court-supervised mediation, the parties reached a settlement, which the court has now approved.

Those covered by the settlement include all Netflix subscribers as of the date of the preliminary approval, a group estimated at more than 62 million. Because of the unwieldy size of the class, individual class members will not receive any payment. Named plaintiffs Milan and Comstock will each receive a $30,000 payment and, after payment of court costs, attorney fees, etc., any remaining funds will go to nonprofit orgniazations and programs promoting consumer education and privacy protection.

Minimal recovery

"In light of the minimal monetary recovery" that individual class members would receive, the court agreed that the lump sum payments to further consumer education about privacy issues was an appropriate solution. Details can be found at

This is what is known as a "cy pres" remedy, a structure that gives class members an indirect benefit rather than a check or other direct direct personal benefit. It is frequently used where proof of individual damage would be difficult. In this case, for example, it was not conclusively shown that any of the viewing histories or other data were distributed to third parties in a way that made individual users identifiable by name.

A similar settlement was used in privacy litigation involving Google Buzz. In that case, it was argued that tens of millions of Gmail users' personal information was wrongly disclosed when Google introduced its now-defunct Buzz social networking service. In that case, the settlement included an $8.5 billion payout to nonprofit groups working to further consumer privacy protection and security.

Besides making the payment, Netflix has agreed to "decouple" viewing histories from customers' identification and payment methods within one year of the settlement.   

Netflix will pay $9 million into a settlement fund to resolve a privacy case that began in 2011. U.S. District Court Judge Edward J. Davila in San Jose, Ca...

Verizon, Redbox launch their Netflix-killer wannabe

They don't have many movies but they have a lot of kiosks

Netflix is one of those ideas that has turned out to be so good that everyone else wishes they'd thought of it. Now, Verizon and Redbox are trying to take it one step further, with a new service that offers streaming movies and rental DVDs.

Oh wait, that's what Netflix does.

OK, let's try it again: Verizon and Redbox are offering a new service that offers streaming movies and DVDs you can rent from one of  those 35,000 Redbox vending machines.

But although it is starting out with a lot of vending machines and a lot of network capacity, the new venture -- called Redbox Instant by Verizon (catchy, eh?) -- is kind of short of movies. It only has 4,600 streaming titles, far fewer than Netflix, Amazon and Hulu Plus, the household names in the field.

But never mind that. The company says it's not trying to compete with Netflix, which offers not only movies but also thousands of TV shows old and new, and even a few Netflix-produced original series.

Redbox Instant will only offer movies. Old movies. New movies. Just, you know, movies. Many better titles are only available at the kiosks, which will take a little getting used to. 

It will cost you $8 a month -- which, coincidentally, is what Netflix charges -- to be part of this grand experiment. For that you can stream as many movies as often as you can stand it and also get credits good for four DVD rentals at one of those kiosks. Kick in another buck and you can upgrade to Blu-ray rentals.

Verizon and Coinstar -- Redbox' elegantly-named corporate parent -- are high on the idea anyway.

“When you consider the core elements the parties bring to this venture – our powerful brands; our national rental kiosk footprint; our anytime, anywhere network presence; and our mutual commitment to customer-focused innovation – it’s clear that Verizon and Redbox are a powerful entertainment team,” said Bob Mudge, president of Verizon consumer and mass business markets.

The companies have been working on this for the last year or so and they say it's finally ready for primetime at

Netflix is one of those ideas that has turned out to be so good that everyone else wishes they'd thought of it. Now, Verizon and Redbox are trying to take ...

Now you can share your Netflix favorites on Facebook

It sounds like a small thing but it took an act of Congress to get it done

So, would you like to see what your Facebook friends are watching on Netflix? How about letting your FB buddies see what you're watching?

That sounds spooky to a lot of people but it's apparently something Netflix customers have been saying they want, and now it's here. 

Netflix announced today that its U.S. members will be able to connect to Facebook and agree to share favorite TV shows and movies on Netflix. The company will be turning on the feature "over the coming days" and expects that all U.S. members will have access to the social feature by the end of the week.

"There are few better ways to find a movie or TV series you'll love than hearing about it from your friends," said Tom Willerer, vice president of product innovation at Netflix.  "Facebook already makes it easy for our international members to connect with friends over TV shows and movies and we're thrilled to now bring this experience to our U.S. members."

The feature has been available internationally for quite some time but, until recently, it was prohibited in the U.S. by something called the Video Privacy Protection Act, enacted in 1988 to keep prying eyes from finding out what movies consumers rented from Blockbuster and other video rental stores. It was amended by Congess last year after some intensive lobbying by Netflix.

The new Netflix/Facebook integration lets Netflix members see what their friends have watched by adding new "Friends' Favorites" and "Watched by your friends" rows to Netflix. Members also automatically share what they watch only within Netflix and can optionally share what they've watched to Facebook, Netflix said.

"People naturally talk about TV shows and movies and love to share their experiences," said Willerer. "Through the Netflix/Facebook integration we want to let Netflix members express themselves on Facebook and provide a digital version of the proverbial water cooler."

"By default, sharing will only happen on Netflix," Cameron Johnson, director of product innovation at Netflix, wrote in a blog post. "You'll see what titles your friends have watched in a new 'Watched by your friends' row and what they have rated four or five stars in a new 'Friends' Favorites' row. Your friends will also be able to see what you watch."

Johnson provides a step-by-step guide in this video:

So, would you like to see what your Facebook friends are watching on Netflix? How about letting your FB buddies see what you're watching?That sounds spoo...

Amazon gets exclusive online rights to 'Justified' and 'The Shield'

Bidding war for popular shows heats up as Netflix, Amazon build their arsenals

Netflix had better watch it. There may not be room in town for both Netflix and Amazon Prime. Prime today got the drop on Netflix as it scored an exclusive deal to distribute a couple of FX shows -- "Justified" and "The Shield" -- online.

Amazon said it has reached a content licensing agreement with Sony Pictures Television to make Amazon Prime the exclusive location to watch FX's "Justified" and "The Shield."

Prime subscribers can watch the shows for free, while other Amazon visitors can purchase and download episodes for $1.99 apiece.

"Justified" is a gritty series bult around the deeds and misdeeds of Raylan Givens, a U.S. Marshal based in the backwater reaches of Kentucky, with Timothy Olyphant of "Deadwood" fame playing the lead.

It's been one of the most watched shows on Amazon Instant Video, where customers can purchase and download episodes for $1.99 each, and will now be available to Prime members at no additional cost, the company said.

In addition, Prime Instant Video will add the inner-city Los Angeles crime drama "The Shield"to its catalog.

“Justified"and "The Shield"are two fan favorites on Amazon,” said Brad Beale, Director of Digital Video Content Acquisition for Amazon. “We’re consistently looking for ways to make Prime even better – and one of the ways we’re doing that is adding shows like these that we know customers love.”

Amazon stole some thunder earlier this month when it acquired exclusive online rights to the PBS hit "Downton Abbey." 

Netflix had better watch it. There may not be room in town for both Netflix and Amazon Prime. Prime today got the drop on Netflix as it scored an excl...

Amazon bundles up exclusive streaming rights to Downton Abbey

Netflix can have its House of Cards, Amazon has the keys to the Abbey

While all eyes were on Matthew speeding home to Downton Abbey, Amazon was locking down the butler's pantry and tying up exclusive streaming rights to the blockbuster British soap opera.

Abbeyphiles may find it hard to accept but, quite soon now, they'll not be able to watch missed episodes, or wallow repeatedly in their favorite scenes, on Netflix or on the show's own website.

Amazon Prime already has Seasons 1 and 2 of the series, which airs on PBS in the United States and will have the just-concluded Season 3 beginning in June.

What's perhaps more significant, is that it will have exclusive rights, meaning that it will be the only legal source for Downton streaming. While the first season is still on Netflix, it won't be for much longer. 

"Later this year, no digital subscription service other than Prime Instant Video will offer any seasons,” Amazon smirked.

The series, which for some reason has enormous appeal to Americans nostalgic for a past they never had, will definitely be around for at least one more season and may even go into a fifth season unless the populace comes to its senses before then.

Mirror image

Netflix has been awash in kudos over the success of its "House of Cards," a smash series that is sort of the mirror image of Downton Abbey. Instead of royals and their servants overcoming their baser instincts as they move regally towards equality, justice, love and what have you, House celebrates the drunken, seedy, corrupt and depraved atmosphere that Americans believe prevails in Washington, D.C.

It's a litte hard to tell which of these is the greater fantasy although those who have lived and worked in present-day Washington will tell you that, while the series may be entertaining, it is -- shall we say -- a bit of a stretch. Since no one we know of spent the early 20th Century in an English manor house, we're not able to gauge their opinion as to which series is the most far-fetched.

For those who have been unaware of Amazon's progress towards digital hegemony, the Downton Abbey coup may blow off their blinders. Amazon has been spending big bucks to acquire recent movie releases and TV series and many consumers would say it already has a more compelling, though smaller, catalog than Netflix.

The truth, however, is that the true film or TV addict needs both, since there is going to be less and less duplication as both players strive to cut exclusive deals for top content. Neither service is expensive but as anyone who has read his credit card statement recently will tell you, little things add up.

Netflix describes its price as $7.99 per month for streaming -- $96 a year, in other words. Amazon's streaming service is mostly free, although some top releases carry an extra charge. Amazon prices it at $79 a year, which sounds like a lot more than $7.99 a month.

Of course, if you're still paying attention, you'll know it's actually $16 less per year. 

Not only that, but the $96 a year for Netflix gets you video steaming. Period. The $79 for Amazon Prime gets you video streaming plus free shipping on most Amazon purchases and other goodies from Amazon's vast array of products and services.

Of course, you can still watch over-the-air TV -- you know, Channel 5 and so forth -- for nothing, other than the constant array of commercials  and fund-raisers. This comes as a shocking revelation sometimes and the occasional adolescent will assure you that watching "free TV" must be illegal. You might want to explain it to them someday when you're not polishing the silver or doing backroom deals with Congressmen.  

While all eyes were on Matthew speeding home to Downton Abbey, Amazon was locking down the butler's pantry and tying up exclusive streaming rights to the b...

The New Normal: Watching an entire series instead of individual episodes

And it seems that Netflix is the first to take full advantage of the new trend

I’m a 70s baby.

So that means when it came to television my eyes were glued to shows like “All in the Family,” “Good Times” and one of my all-time favorites, the “Brady Brunch.”  

One of my favorite episodes of the “Brady Bunch” is when the Brady family goes  to Hawaii and some of the characters experience bad luck for wearing a necklace with a small statue of a tiki dangling from it.

The episode is a three-parter and I remember as a kid nearly collapsing in disappointment when I saw those evil white letters spread across the screen that said “To be continued.”

And did I get to see the following episodes the next day or even later on that week?

Nope, just like everyone else I had to wait an entire week to see what would happen to Greg, Peter and Bobby when they went to that spooky burial ground to undo the curse of the tiki.

Being kept in suspense is the one thing that I really disliked about that episode.

No waiting

Well today, consumers can watch TV in an entirely different way and almost gone are the days when viewers have to wait an entire week to catch episodes of their favorite shows.

With services like On-Demand, Hulu, Netflix, Amazon Prime and a bunch of other companies that offer streaming, people have nearly total control of what they watch and when they want to watch it.

How many times have you heard about a groundbreaking new show through the media or through your friends, but felt no sense of urgency to catch the series on the night it airs, because you know that you can watch it anytime you want.

So instead of adjusting your schedule to watch the HBO show “Girls” for example, you decide to stream the entire first season and watch it in one day, which is the way many folks view programs these days, and the trend isn’t likely to reverse itself anytime soon.

To take advantage of this new normal, streaming companies like Netflix have moved into the business of creating their own television shows and offering entire seasons for viewers to watch instead of rolling out episodes one at a time.

Original content

The company released its first original series “House of Cards” this past Friday at midnight, starring Kevin Spacey, and the company is choosing to offer all 13 episodes at once to viewers, which is a huge attempt to not only give many consumers what they want, but also to move Netflix from being just a distribution company to being a hub for original content.

The company says that giving consumers the ability to access entire seasons up front puts Netflix in a better position to compete with those cable networks that are also moving towards making streaming a bigger part of their business.

“Part of our goal is to become like HBO faster than HBO can become Netflix,” said the company’s CEO, Reed Hastings, in a published interview. “Perhaps people saw us in the past as a distributor or aggregator. We want to have an experience that cannot be replicated by our competitors.”

In a seperate interview with Bloomberg, Hastings said he believed that offering entire seasons to consumers right off the bat will be the complete norm in the next couple of years, and he says when people look back; they’ll ultimately recognize that Netflix was responsible for sparking the change.

On the cusp

“We’re on the cusp of something that will change television forever,” he said. “Our view is that over the next couple of years as Internet TV really grows, people will look back and say that this was the turning point.”

Also, to many fans' liking, Netflix will be re-releasing the comedy series “Arrested Development” starring Jason Bateman.

The show was a cult favorite for three years on the Fox Network from 2003 to 2006 and Hastings believes releasing new episodes is just the beginning of consumers choosing streaming companies over cable television.

However some may disagree with Hastings because networks like HBO and Showtime have a lot more muscle in terms of overall reputation and just being in the consciousness of consumers, but Hastings believes eventually Netflix will be able to compete neck and neck with the many cable giants and be able to offer consumers just as much original content.

“Relative to HBO, we’re much deeper on the tech side, and relative to Amazon, were much deeper on the creative side,” he said.

“We’re able to do more and more calculations and big-data statistics so that what we do is represent Netflix more and more as a place where you come for relaxation escape.”

Rerun city

Some might say that creating original content is exactly what’s needed for Netflix, as the company’s image has taken a few hits lately, namely because of its reputation for offering old movie selections in its streaming packages.

Consumers rate Netflix
Debra of Minneapolis said she recently bought a Netflix streaming package, but wasn’t too happy about the lack of viewing choices, nor about how difficult it was to get the streaming services going.

“We just upgraded to the Netflix instant streaming service,” she wrote in a ConsumerAffairs posting.

“Went through lots of technical hoops to make it happen (purchased a new Netflix ready Blu-ray player, etc.) We knew there were other ways of doing it.

"We were just trying to make our movie watching experience as easy as possible. We were so disappointed with the selection of old movies and TV shows available! These were not second run in our view, more like 4th 5th or worse," she wrote.

So it will be interesting to see how successful Netflix will be at re-strengthening its image among consumers and also how successful it will be in changing the way other companies and networks offer their programming.

Because a person should never have to wait an entire week to watch the conclusion of a multi-part episode, especially a little kid who just wanted to see how the Brady kids made out with the tiki necklace and that darn  ancient curse.

I’m a 70s baby.So that means when it came to television my eyes were glued to shows like “All in the Family”, “Good Times” ...

Amazon Steps Up Battle With Netflix

Amazon Prime is making strikes on the video streaming leader

Netflix, which helped seal the doom of your neighborhood video store just a few years ago, now has Amazon nipping at its heels. Will it go the way of Hollywood Video?

Probably not, but industry insiders say the next few months will be very interesting. Wall Street doesn't know which way to turn, as Netflix stock has become volatile of late.

Netflix, which suffered a public relations disaster in 2011 when it split off its streaming and DVD rental services, is still the leader. It has some 27 million customers and has made some nimble moves when encountering adversity.

Shifting strategy

When Starz Entertainment refused to renew its contract with Netflix, the company found itself without access to some of the blockbuster movies its members expected. While there was some initial grumbling Netflix has loaded up on popular television and cable series, such as "Mad Men," "Louie," and "Breaking Bad."

Instead of just watching a movie, viewers found they could sit down and in one very long night watch an entire season of a TV series, commercial-free.

But while Netflix is expanding its movie library with a deal with Paramount's Epix, its emerging rival,, has also secured a deal with Epix for its Amazon Prime service.

What Prime offers

Amazon Prime may eventually prove a major threat to Netflix as it adds content. While Netflix is all about video content, an Amazon Prime membership gives consumers more.

First, members get free two-day shipping when they order products from Amazon -- well, most of the time anyway. They also get instant access to streaming video content from Amazon's video library Third, they can download a large amount of content to their Kindles at no charge.

Where Netflix costs $8 a month, Amazon Prime is $79 a year. Broken down to a monthly rate, however, it's $6.58.

Advantage, Netflix

So why not switch to Amazon Prime? There are still a few issues to consider. Amazon does not have as large a library as Netflix, through recent history has shown things like that can charge very quickly.

You can watch content from both services in a variety of places but Netflix currently has more places where you can watch, including TiVo, Apple TV, iPhone, Nintendo Wii, Android phones and tablets, Nook color tablets, and Windows phones.

Most movies on Netflix now have subtitles while Amazon has yet to take that step. Still, Forbes recently called Amazon Netflix's worst nightmare. It notes that with Netflix losing exclusivity for much of its content, the video streaming landscape could change in a hurry.

Despite the chaos in the business world that may cause, the result for consumers is likely to be more choices and lower prices.

Netflix, which helped seal the doom of your neighborhood video store just a few years ago, now has Amazon nipping at its heels. Will it go the way of Holly...

RedBox and Verizon Make Their Partnership Official

"RedBox Instant by Verizon" will offer more or less the same features as Netflix

Netflix has been King of the Hill in the DVD and streaming video game but Redbox and Verizon are hoping to muscle their way in with a new partnership expected to be available later this year.

The service called "RedBox Instant by Verizon" will offer more or less the same features as Netflix will, without the home delivery option.

Consumers will be able to select DVDs at the Redbox' kiosks, stream movies directly to home television sets, and also choose to download them.

Customers will be able to choose between 36,800 Redbox kiosks across the U.S., and will also be able to subscribe to Verizon's subscription and video on-demand streaming services.

Industry experts believe the partnership could make a fairly large dent inNetflix' customer base.

Perhaps the two companies teaming up will not only provide an alternative for DVD and game consumers, but also fix some of the service problems that Redbox has created over the years, although if anyone has ever tried to straighten out a customer service problem with Verizon -- and who hasn't? -- it's not exactly an encouraging prospect.

Redbox rants

Consumers rate Redbox

Redbox' kiosks are pretty straightforward but they still generate their share of grousing from movie-hungry consumers. 

"I rented 3 movies from Redbox and returned them within the allotted timeframe of a one-night rental. I have now been charged for all 3 movies totaling almost $80.000," said Cassandra of Minnesota."

"I contacted Redbox and after going back and forth with them for about a week, they decided they would be kind enough to refund half of the money they charged me. What?! I don't have these movies! I'm going to be calling them to offer one more chance to refund the remaining amount and then I will be heading to the bank to dispute that charge. I will never again be renting from a Redbox," she said.

Other consumers experienced problems with Redbox' DVD's being damaged or even blank.

"I want my money back," wrote Candice of Accokeek Md.

"Two weeks ago, I rented a game from a local Redbox, only to find out when I got home that there was a huge ring around the disc and it wouldn't play at all. I was charged 2 days on a game I couldn't play. Today, I made a reservation for another game at a Redbox, 10 miles out of the way. I got all the way to the Redbox, swiped my card, got 'what I thought was the game', and it’s nothing but a blank DVD-R disc with the barcode pasted around the ring."

Exactly how much Redbox' movies and games will now cost has yet to be announced.

Amazonian rumblings

Earlier this month Amazon said it will be working with Warner Bros. Domestic Television Distribution to offer new programming for its at-home video service.

Just like Netflix and Redbox, Amazon's Prime Instant Videos offers streaming services for those U.S. customers with a paid Amazon Prime or student membership. This of course is separate from the company's instant video division, that allows customers to rent and buy movies from a large selection.

However, Amazon only offers streaming capabilities, so customers aren't able to download. By partnering with Warner Bros., viewers will now have access to shows like "The Voice", "2 Broke Girls" and "The Bachelorette."

Netflix in the lead

With Netflix still being way ahead in the movie rental game, it will take both RedBox Instant by Verizon, and Amazon a long while to catch up. Especially since Netflix is doing everything in its power to strengthen its lead, at great cost to its bottom line. Its profits were off 91% for the second quarter and is forecasting a loss for the fourth quarter.

Just one year since the company's price fiasco, which drew away a large number of customers, Netflix recently announced that its customers watched over 1 billion hours of online video in June of 2012, which shows that while consumers may gripe, they are taking full advantage of Netflix' "all you can watch" pricing policy.

Netflix is in perhaps in that fabled location between a rock and a hard place. It is losing about 1 million DVD customers per quarter while its slow-growing online customers are consuming more and more streaming video. DVD rentals are about five times more profitable than streaming video.

All this and new competitors too? What's Netflix to do? Guess we'll have to wait and see.

Netflix may not be enjoying its lonely place on top of the DVD hill anymore; as Redbox and Verizon have made an announcement that the two are joining force...

Some Netflix Customers Complaining About Selection

Company is, in fact, transitioning to new types of content

Netflix was the company that could seemingly do no wrong, until last July. Then, a series of business missteps alienated customers who were especially unhappy when the company began charging separately for its DVD and streaming services.

These days we hear complaints about the content.

“I can no longer find any of the movies I would like to view using the Netflix search command,” Doug, of San Diego, Calif., wrote in a ConsumerAffairs post.

"It stared a few months ago when there was an update to the 360 home page. I realized afterwards that the Netflix had been significantly downgraded, being most noticeable in the search feature."

More of the same?

Gillian, a Netflix subscriber from Northumberland, UK, is unhappy with the selection, calling it “the same old rubbish.”

“It was the same, nothing I want or not what was advertised,” Gillian wrote. 

Jay, of New Canaan, Conn., said he recently cancelled his DVD account and went to streaming. He says he's disappointed.

“I now notice that more and more of my choices are only available on DVD,” Jay wrote. “This is driving me to purchase from Amazon, and recently Hulu Plus more often than using Netflix.

Shooting Starz

The content on Netflix may, in fact, be changing a bit. Netflix's key content contract with Starz Entertainment expired this week, meaning Starz content is no longer available. But consumers shouldn't blame Netflix for that. Starz announced last year it was refusing to renew the contract because it did not believe Netflix was charging consumers enough money to view the content.

Netflix has indeed changed its emphasis and is becoming primarily a provider of TV shows rather than feature films. Many of the new additions are highly acclaimed series, including Mad Men, Arrested Development and Breaking Bad.

Complaints about Netflix selections...

Verizon, Redbox Team To Take On Netflix

Companies separately off video content online and DVD

Redbox has DVDs for rent. Verizon has plenty of bandwidth. Put the two companies together and you have a competitor to Netflix, which provides DVD rentals and streaming video on demand.

The two companies are joining forces to form a company that will rent DVDs and stream video, just as Netflix does. Verizon will own 65 percent of the venture while Coinstar, parent of Redbox, will own 35 percent. The announcement came in a conference call Monday by Biob Mudge, president of Verizon consumer and mass business markets.

"Verizon is embracing streaming, a platform that many view as a disruptive force in our industry, as a great opportunity for innovation and leadership," Bob Mudge, president of Verizon consumer and mass business markets, said during the call. "By teaming with Redbox, we deliver the kind of consumer-empowering service that customers expect from companies like ours."

Details under wraps

While putting the announcement out there, Mudge provided little in the way of details, saying the service won't start until mid-2012 and he doesn't want to give competitors any advantage with detailed information.

For example, it's not clear how the venture would be monetized. Redbox currently charges consumers a fee per DVD rented from its network of vending machines at retail locations. Verizon provides video service through Fios, it's fiber optic system.

Netflix charges its members an $8 monthly fee, for either its DVD rentals or its streaming service. Presumably, any joint venture aimed at competing with Netflix would have a similar price structure.

Devil's in the details

While Verizon Fios has access to plentiful video content, it would have to work out separate arrangements with distributors before it could make the programming available on a streaming service. Last year Netflix lost it's contract with Starz Entertainment, which declined to renew its agreement, saying Netflix did not charge consumers enough for the content. The company also supplies content to cable and satellite services, which charge much more than Netflix.

Netflix appears to have recovered much of its mojo after a trouble-plagued second half of 2011. The company announced it was splitting its DVD rental and streaming businesses, in effect raising the price by 60 percent for members who wanted to continue access to both. It also announced it was splitting into two separate companies – one to be called Qwickster – only to walk that back under consumer protest.

As a result, Netflix stock plummeted from $304 a share to $74. The stock is now back to $128.

Netflix is getting another competitor...

Arms Race Breaks Out as Giants Seek to Dominate Video Streaming

Combatants include Netflix, HBO, Verizon

The days when a couple of Hollywood moguls could lounge around their smoke-filled hang-outs and divvy up the spoils are long gone.

No one smokes anymore, for one thing.  For another, there are so many players crowding into the streaming video market that it's starting to look like Saturday night in the Roman Coliseum.

Netflix is the acknowledged champion of video streaming but now that everyone has realized that, the race is on to unseat it. Competitors want to take over its franchise, while program producers want to sock it with ever-bigger licensing fees.

Verizon is reported to be planning a standalone service that would let customers stream movies and TV shows over the Web.  The new service, as yet unnamed, would be independent of FiOS, Verizon's exisiting broadband service, which has what many reviewers (including this one) think is the best On-Demand selection and superior quality and reliability.  Verizon's recent spectrum purchase gives it a major leg-up in the competition.

HBO Go The anywhere-anytime HBO service is similar in many respects to Netflix although its library is not nearly as big.  On the other hand, it has a huge inventory of top-notch recent HBO movies and shows, something that's notably lacking on Netflix. The Netflix "bin collection," as Hollywood types call it, contains a healthy share of old dogs that weren't exactly greyhounds in their youth.

For its part, Netflix vows that it will start producing its own programs, just as HBO and the other big cable channels do.

Amazon Sure, it's cornered the online market for books, ereaders and assorted home goods but can Amazon really wade into the ring with the big guys? Netflix CEO Reed Hastings doesn't think so. He pooh-poohed Amazon's potential at a recent conference, saying the company doesn't appear willing to spend the $1 or $2 billion a year on programming that will be needed to carve out a huge niche.

A true "friend"

It's hard to get anyone to badmouth Netflix, since it writes such big checks to so many people but protestations of friendship sometimes draw laughs. That's what happened earlier this week when Time Warner chairman and CEO Jeff Bewkes told an investors conference that he considered Netflix "our friend."

"It's true," Bewkes insisted, as laughter rippled through the room.  "We're partners." He insisted that earlier comments comparing Netflix to the Albanian Army were meant in good cheer.

Oh, and don't forget Yahoo.  Or go ahead.  Forget them if you want but the troubled Web portal is trying to ramp up its production of what Internet types call "video content," as opposed to just plain content, which is any mismash of text that contains keywords.  

Yahoo has rented a modest space in Manhattan and is building a studio where it apparently plans to produce news or interview programming.  Who knows where that will go?

So what?

What's all this mean for consumers?  Well, it means that for awhile there'll be lots of big money locking up programming and trying to stuff it into various distribution channels, creating a fluid situation that will, just as surely as concrete hardens, start to consolidate into fewer channels and higher prices.  

The trouble with streaming video, of course, is that it's like sunshine. You have to enjoy it while it's there because it can't be bottled.  

How you spend your time is your business.  As for how you spend your money, it's probably not a good idea to invest in anything that is proprietary -- say, a TV or Blu-ray player that only gets Netflix and a few other Internet channels in addition to the usual cable and over-the-air selection.  Ideally, it's best to stay flexible and become proficient at hooking up your computer or iPad to the big-screen TV.  

Better yet is a Roku box, an economical little gadget that will hook you up to just about any streaming video source out there.  That allows you to buy a simple, stand-alone TV and a lower-priced DVD player.  If the Roku eventually becomes obsolete, you're only out $80 or so.

The days when a couple of Hollywood moguls could lounge around their smoke-filled hang-outs and divvy up the spoils are long gone.No one smokes anymore, ...

Analyst Sees Cable Giants Moving Onto Netflix's Turf

Verizon may launch competing video streaming service

Netflix started off renting DVDs by mail but recently began offering instant content via live streaming on the Internet. That got the attention of Time Warner, Comcast and other content providers, who suddenly realized Netflix could deliver much the same content they were selling at a fraction of the cost.

At least one of these cable giants has apparently decided to fight fire with fire. Verizon, which provides video content via FiOS, may be poised to launch a new Internet video service that would go head to head with Netflix.

Tony Wible, Director of Entertainment and Digital Media at Janney Montgomery Scott, made the prediction Tuesday in a note to investors. As an analyst at Janney Montgomery Scott, Wible not only follows industry developments at Netflix, but also Time Warner, Disney, Viacom and other large media firms.

A catalyst

If Verizon were to launch such a service, Wible said it would be a catalyst for other media conglomerates to jump on board as well. To date, he notes, no cable or pay-TV provider has tried to market its content outside its original footprint. But it would be a simple matter for these companies to set up subsidiaries that could offer web-delivered content in addition to their other, more expensive services.

A basic cable TV service usually starts around $30 a month and can easily be more than $100 a month when premium channels and services are added. A Netflix subscription, on the other hand, is $8 a month.

Verizon has yet to formally announce a web service and did not comment on Wible's prediction.

If Verizon were to follow through on the new service, the timing might be to its benefit. Netflix stumbled badly over the summer when it split off its DVD-by-mail service from its web streaming access, in what amounts to a 60 percent rate hike.

Unhappy customers

Many customers were angry at the rate hike, and also unloaded on the company for other issues, like DVDs that didn't play and a new web browsing feature.

"Aside from having to deal with this new, completely unfriendly browsing feature, I too, am pretty annoyed with their price hike," Hanna, of Lynnwood, Wash., told back in September. "This is your business, Netflix. How hard is it to actually keep things consistent? More importantly, how hard is it to get a little progressive and allow streaming for ALL the movies? One month a DVD is available for live streaming, then the next, it's back on the DVD list. And I can't ever get through their customer service number to complain!"

In October, a computerized analysis of about 4 million consumer comments on Facebook, Twitter and assorted blogs found the company's approval rating continuing to plunge - from a 60 percent approval rating down to 14 percent.

Consumers aren't the only ones who have been unhappy lately. Investors have also punished Netflix. Earlier this year Netflix stock hit a high of $304 per share, but today is trading at around $70.

Verizon may launch a new video streaming service...

Consumer Anger Isn't Netflix' Only Problem

Company beefing up its Washington presence as challenges mount

When the going gets tough, the tough ... well, they get going and hire some more "governmental affairs" representatives.  Lobbyists, in other words.

Netflix is the latest rough and tough high-tech firm to realize it needs to lawyer up and get ready for the next rack of shoes to drop on its once-peaceful video-rental business.

Netflix customers haven't taken to the streets to protest the company's new rate structure but that may only be because so many of them are already out occuping Wall Street, Main Street and everything in between.

But consumers are still outraged at Netflix.  A computerized analysis of about 4 million consumer comments on Facebook, Twitter and other blogs and social media finds the company's approval rating continuing to plunge -- falling from a 60% positive rating a year ago to a dismal 14% today.

Besides the consumer revolt, Netflix faces the usual raft of 21st Century problems -- broadband regulations, privacy rules, telecom and cable conniving and growing resistance from Hollywood rights holders -- and also a 19th Century headache that could be the hardest to solve, namely the sorry state of the Post Office.

New hires

Helping to pull the wagons into a circle will be two new hires --  Victoria Luxardo Jeffries, most recently of the Federal Trade Commission, and Colin Bortner, late of Monument Policy Group.

Jeffries will be a senior manager of government relations.  And Bortner?  Well, he'll be manager of goverment relations.  

Jeffries comes from the a division of the Federal Trade Commission’s bureau of competition that oversaw merger reviews in the high-tech industry and of video rental services. She will begin at Netflix later this month.

At Monument,  Bortner advised Netflix and other Web firms including Zillow, Travelocity and Microsoft.

“I’m pleased to welcome Victoria and Colin to Netflix’s Washington, D.C., office and look forward to working with them as we expand globally and address important consumer issues within a thriving digital economy,” said Michael Drobac, director of government relations for Netflix, according to Politico.

Riding roughshod

The digital economy is all well and good but it was the U.S. Postal Service that originally brought Netflix to D.C.  It began lobbying in 2005 on just a single issue -- postal rate reform.  The price of a stamp is a big deal when you buy millions of them, after all.

Now that Netflix has all these directors, managers and senior managers of government relations, it is obviously hoping to do a lot more managing of a lot more issues.  

Netflix is still a small presence in Washington, perhaps spending less than $1 million per year on lobbying, although with all the new hires and all that senior government managing, that's likely to change quickly.

If you can believe it, the company didn't even have any lobbyists until late 2010.  Can you imagine?  No lobbyists!  

Drobac was the first hire.  He was formerly a Hill staffer for Sen. Kay Bailey Hutchison (R-Texas).  Drobac has also been a log-roller for Expedia, the IAC/InterActive Corp. and the Online Publishers Association.

Whether all these handlers will be able to help Netflix avoid any future blunders remains to be seen but if the company has any hope of becoming the globe-straddling video-streaming goliath of its founder's dreams, its likely to find the need for more lobbyists, government relations and public affairs operatives grows as fast as its bandwidth cravings, if not faster. 


Sentiment analysis powered by NetBase

When the going gets tough, the tough ... well, they get going and hire some more "governmental affairs" representatives.  Lobbyists, in other words....

Netflix Reverses Course, Drops 'Qwikster' Name

But the separate fees for streaming and DVDs remain

Netflix has done it again. The recently-announced price hikes that infuriated consumers was followed by the announcement that video streaming was being separated from DVD rental, which infuriated customers some more.

Now, the company says it's changed it's mind about at least one of the changes. In other words, forget about it.

Qwikster's demise

Just last month Netflix announced it was spinning off DVD rentals to a separate company and website to be called Qwikster. At the time, Netflix explained that the two companies would have a better chance to flourish on their own. DVD's would be rented from a separate website, through a separate account for a separate fee.

Last month's announcement was accompanied by an online mea culpa from Netflix CEO Reed Hastings that prompted this Saturday Night Live parody, which almost seems real in light of the latest announcement.

Over the weekend Hastings took to the Internet again, in a brief blog posting announcing the company would not follow through on its recently announced changes.

Netflix for both streaming and DVDs

“It is clear that for many of our members two websites would make things more difficult, so we are going to keep Netflix as one place to go for streaming and DVDs,” Hastings said. “This means no change: one website, one account, one password… in other words, no Qwikster.”

The announcement of Qwikster was meant to explain Netflix's change to its membership structure. The consumer grumblings began in July when Netflix announced it was charging separate membership fees for streaming access and DVD rentals. At the time, consumers got both for the $8 a month fee. Despite dropping the Qwikster site, customers will have to still pay for both separately, in what amounts to a 60 percent price increase.


The uncharacteristic public relations miscues have come at a bad time for Netflix, which finds itself under growing pressure from its higher priced competitors as well as the emergence of an increasing number on the low end.

Starz Entertainment recently rejected Netflix's $300 million contract renewal offer, stating it was bothered by the fact Netflix was offering access to the content for only $8 a month, while cable and satellite TV companies charged much more.

In the same blog posting announcing the end of Qwikster, Hastings also sought to reassure subscribers that they won't miss the Starz content.

“We’ve recently added hundreds of movies from Paramount, Sony, Universal, Fox, Warner Bros., Lionsgate, MGM and Miramax. Plus, in the last couple of weeks alone, we’ve added over 3,500 TV episodes from ABC, NBC, FOX, CBS, USA, E!, Nickelodeon, Disney Channel, ABC Family, Discovery Channel, TLC, SyFy, A&E, History, and PBS,” Hastings said.

Netflix drops Qwikster idea...

Netflix Inks Streaming Content Deal With DreamWorks

Netflix edges out HBO

Netflix, which earlier this month lost an important content deal with Starz Entertainment, has just signed a deal with DreamWorks Animation to stream its movies online.

In perhaps a sign of the way things are going, DreamWorks' deal with Netflix replaces its content arrangement with HBO. In an interview with the New York Times, DreamWorks CEO Jeffrey Katzenberg called it “a game-changing deal.”

“We are really starting to see a long-term road map of where the industry is headed,” Katzenberg told the Times.

Needed boost

The DreamWorks deal comes at an opportune time for Netflix. Earlier this month Starz Entertainment broke off negotiations to renew its streaming content deal with Netflix. It wasn't so much that Netflix's offer of $300 million wasn't enough, Starz indicated that it was bothered by the fact that Netflix offers unlimited access to its content for $7.99 a month while cable and satellite providers – who are also Starz customers – charge much more.

Last week Netflix announced a two-year non-exclusive licensing agreement with Discovery Communications, which will allow members to instantly watch prior-season series and specials, including an expanded selection of additional seasons of popular series from Discovery, TLC and Animal Planet, as well as Investigation Discovery, Science and Military Channel. Among the highlights are Discovery Channel's Man vs. Wild, TLC's Say Yes to the Dress, and Animal Planet's River Monsters and other titles from Discovery's program library.

"Discovery Communications has always been platform agnostic and committed to satisfying curiosity on all consumer distribution platforms supported by a strong economic model," said Rebecca Glashow, senior vice president, Digital Distribution, Discovery Communications.

Consumer discord

Netflix is in need of a little good news as it copes with some consumer discord over its decision to split off its DVD-by-mail from its streaming service. Previously, consumers got both for $7.99 a month. Now, the services are operated by two separate companies, both of which charge a monthly fee.

A survey by Frank Magid Associates suggests Netflix recent decisions have, indeed, created some challenges. A survey conducted just before the price change announcement shows a large number of consumers with only moderate satisfaction around their Netflix service and lack of satisfaction with the selection of the streaming content.

For example, nine percent of current subscribers say they are going to cancel instead of switching to a new plan. An additional 7% of current subscribers say they will cancel, unrelated to the price change.

Improvement needed

"A major reason that many consumers are not happy with their Netflix service is due to the quality of the content selection in the streaming service," said Mike Vorhaus, President of Magid Advisors, a unit of Frank N. Magid Associates. "Netflix will need to improve the breadth and timeliness of their streaming content to re-build major consumer momentum."

Who stands to benefit from any Netflix erosion? According to Vorhaus, it's Redbox, the company that operates DVD vending machines outside high-traffic retail locations. According to the survey, almost 60 percent of Netflix subscribers also used Redbox.

Netflix, which earlier this month lost an important content deal with Starz Entertainment, has just signed a deal with DreamWorks Animation to stream its m...

Netflix Losing Streaming Content From Starz Entertainment

Starz apparently concerned consumers don't pay enough to view content

Netflix offers subscribers instant access to movies and TV shows through online streaming, which is quickly replacing DVDs-by-mail, the company's original service.  

But a lot of the streaming selections are old, third-rate ... or both.  Much of the newer, better content comes  from Starz Entertainment. Now Starz has announced it is ending its affiliation with Netflix at the end of February.

The two companies had been in contract renewal negotiations late last month, but Starz, LLC, President and Chief Executive Officer, Chris Albrecht says those talks are over.

“When the agreement expires on February 28, 2012, Starz will cease to distribute its content on the Netflix streaming platform,” Albrecht said.

It's not clear that the talks broke down over Netflix' offer. The video rental company had offered a reported $300 million to renew the agreement. Rather, Starz apparently broke off over the talks over the relatively small amount of money Netflix charges consumers for its service.

Too much value for consumers?

“This decision is a result of our strategy to protect the premium nature of our brand by preserving the appropriate pricing and packaging of our exclusive and highly valuable content,” Albrecht said. “With our current studio rights and growing original programming presence, the network is in an excellent position to evaluate new opportunities and expand its overall business."

Netflix charges consumers a flat $7.99 a month for unlimited streaming of its video content. That is well below the price charged by cable and satellite TV providers, who are also Starz customers.

The loss off the Starz contract leaves Netflix with a gaping hole in its streaming content, but the company doesn't appear to be worried.

“We’ll take the money that we were going to spend on Starz and spend it on other content,” Netflix spokesman Steve Swasey told AdWeek.

There have been suggestions that Netflix might begin producing original content, much like HBO and other prime-tier cable channels.

Starz is pulling its streaming content from Netflix...

Redbox Thinks Outside the Box, Plans Streaming Video Service

Single monthly fee will get you movies via DVD and online

Redbox, the DVD rental kiosk company, says it's preparing to challenge Netflix in the streaming video arena. Redbox subscribers will pay a single monthly fee to get access to movies, both as streaming video and on DVDs through kiosks.

Netflix took the early lead in the online streaming business and now has more than 20 million subscribers who get DVDs by mail and movies and TV shows via streaming Internet video. also offers movies and TV shows but charges a per-show price, although there are reports that Amazon will soon off streaming video through a partnership with a so-far undisclosed company, possibly Redbox.

Consumers are steadily shifting away from pay-per-view videos in favor of subscription plans, just as they previously began shifting away from DVDs when Internet streaming became reliable and inexpensive.

The biggest problem all of the new competitors have is getting their hands on the product. Movie studios and the television networks and syndicators are reluctant to let new releases go to streaming video before they're confident they've milked DVD sales for all they're worth.

Redbox Thinks Outside the Box, Plans Streaming Video Service. Single monthly fee will get you movies via DVD and online....

Netflix Cancels Second Contest Over Privacy Concerns

Lawsuit, FTC investigation spelled end for competition

When Netflix finally announced the winners of its three-year, $1 million contest last fall, the buzz was so great that the company wasted no time in announcing a sequel.

That contest gave consumers all over the world the chance to compete to improve the company's movie-recommendation algorithm. Contestants were given access to members' movie ratings and charged with the task of figuring out a way to more accurately suggest movies that those same users would enjoy. The contest, which ran from October 2006 to September 2009, drew 41,000 teams from 186 countries, and rewarded the winning team -- BellKor's Pragmatic Chaos -- with a $1 million check.

Given the benefit for Netflix -- Reed Hastings, the company's CEO, called the contest a big winner for the company and noted that he was getting Ph.D.s for a dollar an hour -- it only made sense that the company immediately announced a Round 2 of sorts.

But the sequel was abruptly called off even before a jackpot was announced, after a lawsuit and an FTC investigation raised concerns that the company was endangering consumers' privacy. Those inquiries grew out of a report by researchers at the University of Texas which found that the data used in the contest was actually traceable to specific consumers.

Although Netflix apparently believed the information -- which in many cases included users' subscriber numbers, ZIP codes, gender, and ages -- was anonymized, the report proved that concealing the source of such data can prove more difficult than expected.

Users' sexuality threatened

The consumer suit against Netflix highlighted the extreme consequences that can potentially result from a breach of consumer privacy. The plaintiff, identified as Jane Doe in court papers, is a closeted lesbian who is a member of a community in which that fact is not a matter of general, public knowledge, including at her children's schools.

According to the suit, Doe periodically ordered movies from the website's Gay & Lesbian section, and also searched for and rented specific titles of movies that would be considered to be 'gay-themed.' The suit chided Netflix for putting Doe's rental history at risk, and noted that such data may also reveal a member's personal struggles with issues such as domestic violence, adultery, alcoholism, or substance abuse.

Doe's suit claimed that Netflix's actions constituted the largest voluntary privacy breach to date, and said that confidential information was given away to the world freely, and with fanfare.

Netflix is hardly the first company to be humbled by online privacy issues. The proposed settlement of a lawsuit involving Google Books has been tripped up in part because of concerns that it could endanger consumer privacy. Last September, Facebook shut down Beacon, a feature that told users' friends about their activity on other sites. Privacy concerns will only grow as online services become more prevalent.

Netflix, meanwhile, has vowed to find more secure ways to improve its recommendation system.

With both the FTC and the plaintiffs' lawyers, we've had very productive discussions centered on our commitment to protecting our members' privacy, Netflix CPO Neil Hunt wrote on the company's blog. We will continue to explore ways to collaborate with the research community and improve our recommendations system so we can constantly improve the movie recommendations we make for you. So stay tuned.

Netflix Cancels Second Contest Over Privacy Concerns...

Netflix To Deliver Movies Straight To TV Sets

Wal-Mart quietly abandons its movie-download service

As Wal-Mart sneaks quietly out of the online movie business, Netflix, the video rental company that pioneered renting movies by mail, now wants to bypass the U.S. Postal Service and send those videos directly to your TV, in high-definition, using an Internet connection.

Netflix and TV set manufacturer LG Electronics, announced a joint project to develop a set-top box for consumers to stream movies and other programming from the Internet to HDTVs -- bypassing the need to use a personal computer. The companies say they hope to roll out the new technology in the second half of 2008.

Wal-Mart quietly closed its movie-download service Dec. 21. Hardly anyone noticed, illustrating the retail giant's failure to make much of a dent in the business. In 2005, Wal-Mart gave up on trying to run a DVD rental service similar to that offered by Netflix.

Netflix said the technology collaboration supports its core strategy of offering a multi-dimensional, or "hybrid," service that gives its more than 7 million members a variety of ways to receive movies and TV series for one monthly fee.

The company did not specify how much it would charge for the service.

Netflix subscribers currently have the ability to watch movies online, but must do so on their computer monitor.

With the availability of the networked LG product planned for later this year, Netflix said its subscribers will be able to watch movies streamed from the Netflix Web site on their large-screen home theater HDTVs as well.

Currently, mail subscribers may choose from among more than 90,000 titles delivered on DVD. The online service currently offers more than 6,000 titles, the company said.

"Internet to the TV is a huge opportunity," said Netflix Founder, Chairman and CEO Reed Hastings.

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Wal-Mart had launched its online movie business in February 2007, offering about 3,000 films and TV episodes. Its downloads were not usable on standard DVD players or on iPods, which analysts said hurt sales.

In its little-noticed Web site notice announcing the abandonment of the service, Wal-Mart said customers who had already bought movies would be able to continue watching them.

AOL also abandoned its online movie service recently. That leaves Apple's iTunes and to compete with the new Netflix offering.

As Wal-Mart sneaks quietly out of the online movie business, Netflix, the video rental company that pioneered renting movies by mail, now wants to bypass t...