1. News
  2. Tech News
  3. Netflix News

Netflix News

Recent Articles

  • Newest
  • Oldest

Netflix will spend millions to create more original content in 2021

The company wants to cater to a wider audience as competition heats up

TV and movie lovers who have feasted on Netflix Originals like “The Crown,” “Stranger Things,” “Ozark,” and “The Queen’s Gambit” are about to get a lot more attention from the reigning streaming video king. 

According to a research report from Bankr, the service will spend about $19.03 billion in 2021 to produce exclusive video content, nearly 10 times what it churned out just five years ago when it first tested the original content waters with “House of Cards.”

Here we come, 2021!

COVID-19 didn’t hamper the company much, if at all. “Since the almost-global shutdown of production back in mid-March, we have already completed principal photography on 50+ productions and, while the course and impact of C-19 remains unpredictable, we’re optimistic we will complete shooting on over 150 other productions by year-end,” the company wrote in its Q3 2020 letter to shareholders.

To demonstrate its aggressive stance, the company said that it expects the number of Netflix originals launched to be up year-over-year in each quarter of 2021. A key target for that content will be an emphasis on Netflix’ burgeoning growth in the Hispanic and Asian markets. 

While the company said that it strives “to be a global entertainment service that can satisfy the needs of members all over the world,” it’s not leaving the English-speaking world empty-handed. Season 3 of Cobra Kai will debut on January 8, 2021. There’s also season four of ‘Stranger Things,’ the action film ‘Red Notice’ (starring Dwayne Johnson, Gal Gadot, and Ryan Reynolds), and season two of ‘The Witcher’ for fans to look forward to.

Go big or go home

If it walks like a duck and talks like a duck, then Netflix is no different than a traditional TV network like NBC, CBS, or ABC when it comes to competing for eyeballs. In addition to its 195 million user base, Netflix subscribers are rather smitten with the service, with 59 percent of young users rating it as their most indispensable TV network.

To push that number higher, the company has to go big or go home -- and it’s going big in 2021.

In reality, Netflix has little choice. In the last year, consumers have been wooed by the debut of Comcast’s Peacock and Disney+. Disney, in particular, has shown just how serious it is about being a big time player in the streaming game by adding in features like co-watching, bundles, and partnerships with the likes of Verizon, which gives the wireless network’s customers a chance to score a free year of Disney+.

“Overall, Netflix needs a lot of video content to remain competitive. However, the shows need to retain subscribers especially those onboarded during the pandemic,” commented Bankr’s Door Justinas Baltrusaitis. “If the subscriber growth slows down, Netflix might need to look for other ways to attract more users.”

TV and movie lovers who have feasted on Netflix Originals like “The Crown,” “Stranger Things,” “Ozark,” and “The Queen’s Gambit” are about to get a lot mor...
Read lessRead more

Netflix discontinues free trials for new U.S. subscribers

The streaming service will be trying other promotion strategies

Netflix has confirmed that it will stop offering free trials to U.S. customers. Instead of touting a free 30-day trial, the streaming giant has changed its sign-up page to emphasize that it lets subscribers cancel anytime at no cost. 

“We’re looking at different marketing promotions in the U.S. to attract new members and give them a great Netflix experience,” a Netflix spokesperson said Tuesday. 

Those promotions include content sampling for consumers in the U.S. For example, Netflix recently made one of its films (“To All the Boys I’ve Loved Before”) available to watch without a Netflix subscription. It has also posted some educational content on YouTube for free. The platform says content sampling promotions like these are expected to continue into 2021. 

The Verge noted that Netflix has spent the last couple of years gradually pulling the free trial option in other countries. Meanwhile, newer streaming platforms like Apple TV and Disney Plus have extended their free trial periods in order to grow their customer base.  

Netflix currently has more than 192 million subscribers. 

Netflix has confirmed that it will stop offering free trials to U.S. customers. Instead of touting a free 30-day trial, the streaming giant has changed its...
Read lessRead more

Netflix announces multi-million cash commitment to help Black communities

The company says it wants to help address systemic racism

Netflix has announced that it will put 2 percent of its cash holdings towards supporting the economic development of black communities. The company said its initial commitment will be as much as $100 million.

In a blog post on Tuesday, the video-streaming giant said the money will go toward narrowing the financial divide between Black and White families created and perpetuated under the nation’s long history of systemic racism.

“Banks that are Black-owned or led represent a mere one percent of America’s commercial banking assets. This is one factor contributing to 19 percent of Black families having either negative wealth or no assets at all,” wrote Aaron Mitchell, a Netflix director of talent acquisition, and Shannon Alwyn, Netflix’s treasury director. 

To start, Netflix will move $25 million to the Black Economic Development Initiative, a fund recently set up by a non-profit called the Local Initiatives Support Corporation. The non-profit will invest the fund in financial institutions serving Black communities. Another $10 million will be deposited at Hope Credit Union, which focuses on obtaining funding outside of the underserved regions it serves. 

“Over the next two years, HOPE estimates the Netflix deposit will support financing to more than 2,500 entrepreneurs, homebuyers, and consumers of color,” the company said.

Supporting Black communities

Mitchell and Alwyn noted in their blog post that 19 percent of Black families have “either negative wealth or no assets at all,” while just 9 percent of White households fall under that category. 

“Black banks have existed to fight this for generations, spurring economic growth by extending credit in often underbanked communities,” the company wrote. “But they’re disadvantaged in their access to capital, especially from large multinational companies, when compared to other banks.”

Earlier this month, Netflix CEO Reed Hastings and his wife Patty Quillin pledged $120 million to Black colleges in response to the killing of George Floyd and the nationwide “Black Lives Matter” movement.

“Both of us had the privilege of a great education, and we want to help more students — in particular students of color — get the same start in life,” Hastings and Quillin said in a joint statement.

Netflix has announced that it will put 2 percent of its cash holdings towards supporting the economic development of black communities. The company said it...
Read lessRead more

Netflix will start canceling inactive subscriptions soon

The company will send out confirmation requests over the next couple of weeks

Word came down from Netflix corporate on Friday that inactive subscriptions run the risk of being canceled. The company is asking subscribers who haven't used the service in a year or more to let them know that they still want to be a member -- even if they're going to keep their membership turned off until further notice.

According to Netflix' Eddy Wu, the inactive accounts represent less than half of one percent of its overall member base -- about a few hundred thousand.

Expect a nudge

Netflix will be sending out email and in-app nudges over the next few weeks to find out what the dormant subscribers want to do. If the service doesn't receive a user's confirmation, their service will be canceled with no penalties or fees.

"If anyone changes their mind later, it's really easy to restart Netflix," Wu said. "As always, anyone who cancels their account and then rejoins within 10 months will still have their favorites, profiles, viewing preferences and account details just as they left them. In the meantime, we hope this new approach saves people some hard-earned cash."

CNBC's Jessica Bursztynsky called Netflix move "extremely unusual among companies that charge an annual subscription, and shows a measure of confidence in Netflix's value proposition for customers." 

Bursztynsky also thinks a little "hello, remember us" nudge may help Netflix retain some top-of-mind recall -- especially as new competitors like Disney+ and NBCUniversal's Peacock continue elbowing in for a piece of the streaming service action.

Word came down from Netflix corporate on Friday that inactive subscriptions run the risk of being canceled. The company is asking subscribers who haven't u...
Read lessRead more

Netflix continues to grow its footprint abroad

The company released data on how many subscribers it has globally in an SEC filing

In a recent filing with the Securities and Exchange Commission (SEC), Netflix shared how many subscribers it has in several global regions for the first time. While the bulk of its subscriber base is still made up of consumers from the U.S. and Canada, the report shows that the streaming giant is growing quickly in other global markets.

In the two-year period between 2017 and 2019, Netflix increased its subscriber base in Europe, the Middle East, and Africa from just over 26,000 to over 47,000. In Latin America, that number jumped from under 20,000 to over 29,000; and in the Asia-Pacific region, it went from around 6,500 to nearly 14,500. 

Revenue generated from foreign markets also made a big leap in those two years. In those same three markets, overall revenue jumped from $4,081,357 to $7,080,948 from 2017 to 2019. In contrast, revenue generated in the U.S. and Canada moved from $6,660,859 to $7,379,300 over the same time period.

Expanding services and content

The findings underscore how Netflix has become more of a global giant as a streaming service. It is currently working on several initiatives that company officials hope will generate more excitement and draw in more subscribers. 

Earlier this month, the company said it was testing a new yearly subscription plan that could save consumers up to 50 percent if they paid in advance for a full year of service. The company also recently offered $2 billion in debt to fund content creation on its platform.

These initiatives and competitive pricing have made Netflix a hit with many consumers. In a recent ConsumerAffairs review of the service, Sally from Sarasota, Florida said that it can be a great alternative to cable TV. 

“Unless you have cable to access movies, Netflix has proven a winner with our family. Their list of outstanding movies, past and present, are always available, and at a reasonably low price,” she said.

To read more consumer reviews about the service, check out ConsumerAffairs’ page here.

In a recent filing with the Securities and Exchange Commission (SEC), Netflix shared how many subscribers it has in several global regions for the first ti...
Read lessRead more

Netflix to test a new yearly subscription plan

If rolled out widely, the plan would allow consumers to save 50 percent if they paid for a full year of the service

On the heels of the launch of Disney+, Netflix appears to be mulling a change to its pricing plan options. A new, cheaper pricing plan is currently being tested in India, Reuters reports. 

Under the plan, new and existing subscribers who pay for a full year of the service can save 50 percent. Those who sign up for six months or three months of the service get 30 percent and 20 percent discounts, respectively.

When applied to the most expensive plan in the U.S. (the Premium plan), consumers would end up paying $7.99 per month if they opted for a one-time payment of $95.94. The Premium plan currently costs $15.99 per month.

"We believe that our members may value the flexibility that comes from being able to pay for a few months at once. As always, this is a test and we will only introduce it more broadly if people find it useful," a spokeswoman for Netflix India told Reuters. 

Competitive pricing

Although Netflix has said it’s not worried about competition from Disney+, the introduction of an alternative pricing option on Netflix would allow it to offer similar pricing when compared to its streaming service rival. 

Disney’s new service costs just $6.99 per month, or $5.83 for those who pay for a full year of Disney+ access. The service garnered more than 10 million subscribers at launch and could hit as many as 20 million subscribers by the end of the year, according to recent estimates from Credit Suisse.  

On the heels of the launch of Disney+, Netflix appears to be mulling a change to its pricing plan options. A new, cheaper pricing plan is currently being t...
Read lessRead more

Study finds nearly 20 percent of consumers use someone else’s video streaming account

Nearly half are using their parents’ login

Subscribing to Netflix, Amazon, or Hulu costs less than $15 a month -- a bargain some might say. But there are still a lot of people who avoid that modest monthly subscription by using a friend or family member’s login.

These video streaming services spend billions of dollars each year obtaining existing and producing original content yet they have to contend with consumers sharing a subscription. A new report from CordCutting.com estimates that about 20 percent of people watching a pay video streaming service are using someone else’s account.

The report finds that Netflix has the most freeloaders. Nearly half -- 48 percent -- are using their parents’ account. Another 14 percent use another family member’s login.

Netflix has responded to this trend by creating a level of service -- at a higher rate -- that allows two users to be logged in at the same time.

Freeloading millennials

Broken down demographically, the report shows that millennials tend to make up a large segment of the freeloaders. They make up 18 percent of the Netflix pirates and 20 percent of those piggybacking on someone else’s Hulu account.

No doubt they view it as a victimless crime, but the study shows that the practice can have a rather large impact on a video streaming service’s bottom line. In the case of Netflix, which spends more on content that Disney, the company is estimated to lose as much as $192 million a month from piracy.

Piracy losses for Amazon are estimated to be $45 million and Hulu loses about $40 million a month.

You could make the case that people freeloading on someone else’s Netflix account probably wouldn’t subscribe to the service anyway, but there are plenty of analysts who think otherwise. Netflix continues to add subscribers but much of its growth is coming from overseas.

How much better could it do?

The study suggests Netflix could be doing a lot better if everyone played by the rules. It surveyed a sample of people using someone else’s account and found that nearly 60 percent said they would pay for the service if they lost access. That would add an estimated $112 million a month to Netflix’s revenue.

That said, the company appears to be doing just fine. In its latest earnings report, Netflix said it added 8.8 million new subscribers, a better-than-expected performance. It earned 30 cents a share on revenue of $4.19 billion.

Subscribing to Netflix, Amazon, or Hulu costs less than $15 a month -- a bargain some might say. But there are still a lot of people who avoid that modest...
Read lessRead more

Netflix price increases have consumers considering canceling their subscription

Nearly one-fourth of subscribers said they ‘might cancel’ the service due to rising costs

Netflix, which last week raised its monthly subscription prices for all 58 million of its U.S. subscribers, may see a slight drop in its subscriber count in response to price increases, a new study suggests.

News site Streaming Observer recently partnered with Mindnet Analytics to "gauge [subscribers'] reaction to the latest round of price increases."

Of the 607 adult subscribers who participated in the survey, nearly one-fourth (24 percent) of respondents said they "might cancel" Netflix over the higher prices. Three percent said they would “definitely cancel" their subscription.

However, most subscribers (71 percent) said they would keep their Netflix subscription despite the latest round of price increases.

Interest in ad-supported model

Ten percent of those who responded to the online survey said they planned to downgrade to a lower-priced plan. Two-thirds (65 percent) said they would consider a lower-priced or free version of Netflix with advertisements, which is a change from past survey results.

“In the past, many Netflix users were adamant they would never tolerate ads on the streaming service," the site's founder and editor-in-chief Chris Brantner said in the survey results. The new prices have most subscribers “reconsidering” whether they’d still subscribe to Netflix if ads were included, he added.

In response to whether they would consider a discounted, ad-supported version of Netflix, 35 percent of respondents said "No discount is enough" to have to sit through advertising. The rest of those polled had different ideas on how much of a discount they would require if commercials were thrown into the mix.

Fifteen percent said they would want the service for free, 8 percent said that would require a 75 percent discount, 29 percent wanted the service to be half-price, and 13 percent would require 25 percent off to watch ads while using the service.

Price increases largely tolerated

Netflix’s new monthly prices will cause consumers’ bills go up anywhere from 13 percent to 18 percent -- the biggest price jump in Netflix’s history. Existing customers will see the price increases reflected on their bills “over the next few months.” New subscribers will already see the new pricing on the company’s website.

Netflix said it changes pricing on occasion to financially bolster its efforts to provide “great entertainment” and “improve the overall Netflix experience.”

Streaming Observer noted that Netflix’s previous price increases haven’t taken much of a toll on its overall subscriber count, even when large numbers of subscribers said they might cancel the service over the change.

“In the past when Netflix has raised prices and subscribers have threatened to cancel in large numbers, analysts predicted only a very small percentage, roughly 3%-4%, of subscribers would actually do so. In that case, the price increase would still prove to be quite profitable overall for Netflix,” the report said.

Netflix, which last week raised its monthly subscription prices for all 58 million of its U.S. subscribers, may see a slight drop in its subscriber count i...
Read lessRead more

Netflix to raise its monthly subscription prices

The new rates will take effect immediately

Going forward, Netflix subscribers will have to pay a little more for the streaming service.

The company announced Tuesday that, effective immediately, its basic plan will cost $9, up from $8; its HD standard plan (Netflix’s most popular plan) will cost $13, up from $11; and its 4K premium plan will cost $16, up from $14.

Netflix said existing subscribers will see the new pricing reflected on their bills “over the next few months.”

“We change pricing from time to time as we continue investing in great entertainment and improving the overall Netflix experience,” the company said in a statement.

Netflix has not yet returned a request for additional comment from ConsumerAffairs.

Offsetting content cost

The new monthly prices equate to an increase of 13 percent to 18 percent -- the biggest jump in Netflix’s history.

The higher subscription costs are intended to help Netflix grow its lineup of original content, as well as help the company dig itself out the debt it’s acquired while striving to compete with Amazon, Disney, and AT&T.

Netflix has raised its prices for U.S. subscribers four times, most recently in late 2017. However, this is the first rate increase that will impact all subscribers at once. News of the most recent subscription price hikes caused Netflix shares to rise about 6 percent in morning trading Tuesday.

Going forward, Netflix subscribers will have to pay a little more for the streaming service. The company announced Tuesday that, effective immediately,...
Read lessRead more

Netflix users will no longer be able to subscribe via their iTunes account

The streaming service is bypassing the Apple ‘app store tax’

Netflix is no longer allowing new members to sign up for its service through Apple's app store, according to an update on the frequently asked questions (FAQ) section of the company’s website.

"We no longer support iTunes as a method of payment for new members," Netflix says. "Existing members who currently use iTunes as a method of payment can continue to do so."

The move to cut Apple out the equation will translate to a financial loss for Apple and a financial gain for Netflix. By asking all customers to use its website or app for billing and payments, Netflix will be able to keep all of the subscription revenue that comes in instead of giving 15 percent to Apple.

The change could result in a loss of up to $700,000 per day in iOS revenue for Apple, while Netflix stands to save millions annually.

In May of last year, Netflix got rid of the option to subscribe to its streaming service via Google Play. The company’s moves to boost its overall revenue by cutting out exorbitant fees come as an increasing number of consumers are turning to mobile streaming entertainment first.

"Consumers honestly don't care about screen size — they simply want to be entertained at a compelling price/value,” Rich Greenfield, media analyst and managing partner at the investment firm BTIG, told Axios.

The uptick in mobile streaming consumption has fueled Netflix’s growth in recent years, resulting in a boost in mobile revenue of nearly 100 percent year over year in its fiscal third quarter.

Netflix is no longer allowing new members to sign up for its service through Apple's app store, according to an update on the frequently asked questions (F...
Read lessRead more

Netflix says it won’t remove documentary about chronically ill that participants say led to cyber-bullying

Participants say that the Netflix series Afflicted is deceptively edited

Netflix says it will not remove a documentary series that participants say was edited to make them appear crazy. Afflicted, which began streaming in August, chronicles the lives of patients who suffer from rare chronic diseases. Interviews with relatives and psychiatrists in the film suggest that the patients are imagining their symptoms.

The filmmakers used manipulative editing and ignored medical research to push that narrative forward, according to an open letter signed by the film’s cast, several medical researchers, doctors and celebrities such has Monica Lewinsky, who is now an anti-bullying advocate. The group is asking Netflix to take the series offline.

The people featured in the film say they were misled about how they would be portrayed and say that they're now being bullied by strangers.

A Netflix source tells ConsumerAffairs that they have no plans to remove the documentary. In a prepared statement through the Netflix press team, the film’s producer Dan Partland says that the filmmakers were trying to evoke compassion for their subjects.

He did not address the specific claims that the cast made about manipulative editing. Participants claim, for instance, that they were instructed to repeat interviewers’ questions back to them before answering each question. They say footage was later edited to make it appear as though the words were their own. They also say that the filmmakers personally arranged visits with questionable doctors in some cases. Other doctors depicted speculating about the patients’ conditions never actually treated them, the participants say.

"Our intention was to give the world a compassionate window into the difficulties of patients and families suffering from elusive and misunderstood illnesses, to humanize their struggle and to show that struggle in all its complexity,” producer Dan Partland said in his statement responding to the controversy.

Participants said they were told the same thing before filming, but they disagree that the final result was sympathetic.

“Afflicted was introduced to participants as a series that would ‘compassionately’ represent their experiences with diseases that lack proper diagnostic tools and effective treatments,” the open letter from participants, doctors and celebrities says.

“But rather than authentically depict these participants’ experiences and the biomedical research that might explain their illnesses, Afflicted used every creative tool and untenable journalistic practice to advance a narrative that suggests these patients’ problems are primarily psychological, a theory that is not supported by the evidence.”

Netflix says it will not remove a documentary series that participants say was edited to make them appear crazy. Afflicted, which began streaming in August...
Read lessRead more

Netflix announces new changes to its platform

It’s the end of user reviews and the beginning of promo videos

Over the last few days, Netflix announced two new changes that will alter users’ experience moving forward.

For starters, the platform stated months ago that it would be doing away with user reviews, and that time has finally come. Additionally, though just in the testing phases as of right now, the company has started showing short promo videos of Netflix shows in between episodes of other Netflix shows.

Consumers have been exceptionally vocal -- particularly regarding the second issue -- as the updates have the potential to change the familiar Netflix experience.

User reviews

Netflix announced in early July that it would doing away with user reviews on its website come the end of the month.

In an email to users that had recently left reviews, the company said that the feature was being eliminated due to lack of use in recent months. Many speculated that Netflix didn’t want to give subscribers the power to publicly disparage shows or movies. The company has also reported issues with users who bombard the comments sections because they disagree with the content of certain movies or shows.

Earlier this year, Netflix removed it’s five-star rating system and changed it to a simple thumbs up or thumbs down, and this option remains available to users.

Backlash over ads

There have been rumors flying around online that Netflix was going to start showing commercials in the middle of shows.

The company began showing commercials between shows and movies -- strictly as a test -- and users were able to skip them with a quick click. The ads were only during shows Netflix produced -- not during shows produced by outside production companies. Users were less than pleased with this test, but Netflix was quick to dispel the rumors and provide insight.

“We are testing whether surfacing recommendations between episodes helps members discover stories they will enjoy faster,” a Netflix spokesperson said. “It is important to note that a member is able to skip a video preview at anytime if they are not interested.”

Reddit quickly became a popular forum for users to share their frustrations.

“If I get ads shoved in my face on Netflix then I fully expect the service to be free without paying anything for it,” one user wrote. “Plenty other sites that deliver quality content without pushing ads in the customers face.”

This same discussion saw many users touting Hulu for their transparency in offering customers both ad-free and ad-supported options.

Netflix attempts to quash concerns

Some users took to Twitter to express their concerns, with some users who weren’t affected by the testing threatening to leave the streaming service.

“I’ll be one of the millions to say it,” one user tweeted. “If you introduce any ads to your service that we pay for, I am cancelling my subscription that I had for years and move on somewhere else.”

Netflix did rebut, though. On top of informing users that this feature is strictly in the testing phases and does not affect all users, the company also released an official statement. “A couple of years ago, we introduced video previews to the TV experience, because we saw that it significantly cut the time members spend browsing and helping them find something they would enjoy watching even faster,” the company said.

To opt out of future Netflix testing, users can go to netflix.com/donottest at any time and provide information to avoid promotional materials.

Over the last few days, Netflix announced two new changes that will alter users’ experience moving forward.For starters, the platform stated months ago...
Read lessRead more

Netflix tries to shut down rumors about it adding commercials

The streaming service is testing out video promotions between episodes and movies, but they can be skipped by the viewer

Netflix hopes that binge-worthy, not cringe-worthy, will remain the name of its game after the movie platform suffered through a beta test of running what appeared to be commercials between episodes and movies.

The move created a serious backlash from subscribers even though they could “skip” the message with the click of a button.

"We are testing whether surfacing recommendations between episodes helps members discover stories they will enjoy faster," a spokesperson for Netflix said. "It is important to note that a member is able to skip a video preview at anytime if they are not interested."

Netflix users voiced their frustration on a Reddit discussion.

“If I get ads shoved in my face on Netflix then I fully expect the service to be free without paying anything for it. Plenty other sites that deliver quality content without pushing ads in the customers face,” wrote one embittered subscriber. Others went as far as suggesting that people pirate Netflix’ content.

In the same discussion, disgruntled users applauded Hulu’s transparency for offering both ad-supported and ad-free tiers to its service. “Scummy of Netflix to just slip it into their sub with no warning,” wrote one user in the Reddit conversation.

In response to the public outcry, Netflix stated that the new promotional materials were simply all part of its normal process.

"At Netflix, we conduct hundreds of tests every year so we can better understand what helps members more easily find something great to watch. A couple of years ago, we introduced video previews to the TV experience, because we saw that it significantly cut the time members spend browsing and helped them find something they would enjoy watching even faster," a company representative told ConsumerAffairs.

"Since then, we have been experimenting even more with video based on personalized recommendations for shows and movies on the service or coming shortly, and continue to learn from our members."

A tempest in a teapot?

It’s hard to gauge how this dust-up will affect Netflix, but the company seems to be determined to create a new revenue stream off the backs of its enormous audience -- estimated by Statista at over 130 million.

Close to a year ago, the streaming service boosted rates on two service plans which had the potential of lining its pockets with an extra $100 million a month. ConsumerAffairs also reported that Netflix appeared to be testing a new tier called “Netflix Ultra” in European markets with a price point of approximately $16.99 a month.

Watch up or hush up?

Netflix has pulled back when it comes to consumer comments lately. First, in July, it removed reviews from its website. In the recent Reddit discussion about the inclusion of ads, Netflix put the kibosh on the discussion and locked the thread so only Netflix moderators could manage the posts.

If Netflix is looking in its rearview mirror, it has to be seeing other services -- especially Hulu -- gaining ground. Thanks to exclusive shows like ‘The Handmaid’s Tale,’ Hulu now has more than 20 million subscribers, an 18 percent increase since the fourth quarter of 2017. In a recent survey, 23 percent of respondents stated that they had an active Hulu Plus subscription, with the service being a favorite amongst millennials.

Hulu also has a leg up on Netflix and is edging closer to becoming a "real" network by offering live TV in addition to streaming, including content from Disney, NBC, and Fox -- all of which are Hulu shareholders.

Netflix hopes that binge-worthy, not cringe-worthy, will remain the name of its game after the movie platform suffered through a beta test of running what...
Read lessRead more

Netflix will remove user reviews from its website next month

Written reviews are going the way of five-star ratings by the end of July

Starting July 31st, Netflix users will no longer be able to leave written reviews for movies or TV shows on the company’s website. According to an email Netflix sent to users that had recently left written reviews, the change is being attributed to declining usage of the feature.

Early last year, Netflix removed its five-star rating system and changed it to a thumbs up or thumbs down feature. Netflix was criticized for the move, as many thought it was overly simplistic, but the company is adamant that it’s received more ratings since implementing the new rating feature.

Written reviews on Netflix were only featured on the company’s website -- not its apps. Additionally, a Netflix spokeswoman noted that written reviews didn’t affect the way the platform recommended shows to users. Users will still be able to use the thumbs up/thumbs down feature when written reviews become obsolete.

“This feature is only offered on the website and has seen declining in usage over time,” said Netflix spokesperson Smita Saran.

Reasons for the change

Though the news comes when Netflix is seemingly at its peak with over 125 million worldwide subscribers, many believe the removal of written reviews is seen as a way for Netflix to maintain its image.

According to a report by Engadget, Netflix is spending billions of dollars on original content, and may want to limit the potential to be publicly disparaged. As such, users will no longer be able to comment on third-party content that has been removed. The platform will not release information regarding the popularity of its shows -- whether original content or not -- and the written reviews served as a forum for subscribers to voice their opinions on shows and movies they both liked and disliked.

The Engadget report also notes that Netflix has had an issue in the past with users bombarding the review section with negative comments simply because they disagree with the content of certain movies or shows. Just before Netflix removed the five-star rating feature last year, comedian Amy Schumer’s Netflix special tanked in ratings because of individuals who allegedly disagreed with her views. Other recent releases -- like The Last Jedi -- revealed similar trends.

While users will no longer be able to submit reviews after July 30, reviews will still be available on the website through mid-August.

Starting July 31st, Netflix users will no longer be able to leave written reviews for movies or TV shows on the company’s website. According to an email Ne...
Read lessRead more

Survey finds Netflix is dominating U.S. living rooms

The company is testing a more expensive subscription tier

Consumers are increasingly turning to Netflix for their video entertainment, preferring the platform's video-on-demand model to traditional television.

A survey by Cowen & Co., a Wall Street financial services firm, shows 27 percent of consumers said they get most of their television entertainment through Netflix, compared to 20 percent who mostly watch basic cable, and 18 percent who watch over-the-air broadcast television.

The report backs up the recent findings from Leichtman Research (LRG) which shows cable TV providers have lost 3.4 million subscribers since 2012. The largest pay-TV providers lost about 305,000 customers in the first quarter of 2018.

Millennials driving the trend

The Cowen research shows young adults are clearly driving the trend. Nearly 40 percent of adults 18 to 34 list Netflix as their preferred video platform, compared to 12.6 percent for basic cable and 7.5 percent for broadcast TV.

Netflix also holds a dominant position over both YouTube and Hulu among this age group, building it by providing collections of popular TV series to supplement its movie offerings. In recent years, Netflix has spent billions of dollars producing original content to solidify its leadership position.

Currently Netflix offers three subscription plans, but might soon offer a fourth. The company has confirmed to CNET that it is testing Netflix Ultra, a subscription plan that would allow four devices to view Netflix content in HD audio and video at the same time.

Current plans

The current Netflix Basic plan costs $7.99 a month and allows content to be viewed on only one device at a time. Standard, which costs $10.99, allows content to be shown on two devices at the same time and Premium, which costs $13.99 a month, allows streaming to four devices simultaneously.

Netflix appears to be testing the new tier in European markets, such as Germany and Italy. The Italian blog Tutto Android first reported the testing of Netflix Ultra, with a price point of approximately $16.99 a month.

CNET cites a Netflix spokesperson as saying the company is currently testing several different price points to learn "how customers value Netflix."

The fact that research shows Netflix holding a dominant position in American living rooms could give the company confidence that it can launch a more expensive subscription level.

Consumers are increasingly turning to Netflix for their video entertainment, preferring the platform's video-on-demand model to traditional television....
Read lessRead more

Netflix subscriber growth exceeded expectations in the first quarter

The company added an impressive 7.4 million users in Q1

In its first-quarter earnings update, Netflix disclosed that it signed up 26 million new subscribers in the past year. In the first quarter alone, the streaming giant added 7.4 million subscribers worldwide.

Subscriber growth expectations were high prior to the release of the earnings report, but the company’s user growth was much higher than expected in the first quarter. Its earnings met expectations, and its revenue managed to top estimates.

Netflix said in its letter to investors that quarterly revenue grew 43 percent year-over-year in Q1, “the fastest pace in the history of our streaming business.” The results of the report caused Netflix shares to jump more than 5 percent in after-hours trading on Tuesday.

A new record for the first quarter

As of the end of March, Netflix had 125 million subscribers worldwide. The streaming giant reported $3.7 billion in revenue for Q1 and a net profit of $290 million.

Its higher-than-expected revenue in Q1 was due to a 25 percent increase in average paid streaming memberships, plus a 14 percent hike in the average subscription price. Netflix previously raised rates on its plans in the U.S. and other territories at the end of last year.

Going into the second quarter, the company said it expects 6.2 million global net additions -- an increase of 5.2 million from last year’s first quarter. Netflix expects content spending to hit between $7.5 billion to $8 billion for 2018, which is on par with previous estimates.

Adding more original series

The company announced earlier this year that it would be focusing on adding more original titles. Netflix said it will “continue to raise debt as needed to fund our increase in original content.” As of March 31, the company had $6.54 billion in long-term debt and $3.4 billion in long-term content payment obligations.

Netflix says that adding more original series, such as sci-fi thriller “Altered Carbon” and returning seasons of “Marvel’s Jessica Jones,” should help to fuel subscriber growth and retention.

“We’re investing in more marketing of new original titles to create more density of viewing and conversation around each title (i.e bigger hit in a nation or demographic),” the company said in the report.

“We believe this density of viewing helps on both retention and acquisition, because it makes our original titles even less substitutable. Because we operate in so many countries, we are able to try different approaches in different markets, and continue to learn.”

In its first-quarter earnings update, Netflix disclosed that it signed up 26 million new subscribers in the past year. In the first quarter alone, the stre...
Read lessRead more

Netflix accused of rigging its employee bonus system

A lawsuit claims the company skirted U.S. tax law by awarding undeserved employee bonuses

A federal lawsuit filed by the City of Birmingham Relief and Retirement System accuses Netflix of rigging its executive bonus program so that “multi-million dollar windfalls” could be awarded to some of its top executives.

The lawsuit alleges the Netflix board “rigged the compensation process, guaranteeing Netflix officers huge cash payments while misleading investors into believing that these payments were justified by attainment of real performance goals”.

The suit claims the company awarded unwarranted compensation to top management in order to take advantage of a prior tax loophole, which stated that bonuses for employees earning a salary of more than $1 million must be performance-based in order to qualify for a federal tax deduction. Performance-based tax deductions were eliminated under the new tax law.

$18 million paid to top executives

Netflix’s board of directors reached their goals in seven out of eight quarters leading up to July 2017. The suit alleges that the milestones were either changed or managed to make them easier to achieve.

The lawsuit referred to the behavior of missing just one percentage point in the other quarter as “artificial precision.” Top members of the board were paid approximately $18.73 million out of the $18.75 million set aside in a target pool.

The four executives named in the lawsuit are: chief content officer Ted Sarandos ($10.5 million), former chief product officer Neil Hunt ($12.5 million), current chief product officer Greg Peters ($3.2 million), and general counsel David Hyman ($800,000).

The lawsuit is asking for damages and a new system of corporate governance to prevent another violation of board members’ fiduciary responsibilities. The suit also demands the executives give back “all compensation and remuneration of whatever kind paid by Netflix” that is determined to be unlawfully gained.

“We intend to respond to these claims at the appropriate time,” a Netflix spokesperson said in a statement.

A federal lawsuit filed by the City of Birmingham Relief and Retirement System accuses Netflix of rigging its executive bonus program so that “multi-millio...
Read lessRead more

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...
Read lessRead more

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...
Read lessRead more

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 ...
Read lessRead more

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 ...
Read lessRead more

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...
Read lessRead more

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...
Read lessRead more

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...
Read lessRead more

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...
Read lessRead more

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...
Read lessRead more

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 ...
Read lessRead more

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....
Read lessRead more

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...
Read lessRead more

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...
Read lessRead more

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 www.videoprivacyclass.com.

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...
Read lessRead more

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 RedboxInstant.com.

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 ...
Read lessRead more

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...
Read lessRead more

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...
Read lessRead more

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...
Read lessRead more

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” ...
Read lessRead more

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, Amazon.com, 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...
Read lessRead more

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...
Read lessRead more

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...
Read lessRead more

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...
Read lessRead more

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, ...
Read lessRead more

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 ConsumerAffairs.com 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 ConsumerAffairs.com 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...
Read lessRead more

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 ConsumerAffairs.com 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....
Read lessRead more

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...
Read lessRead more

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...
Read lessRead more

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...
Read lessRead more

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.

Amazon.com 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....
Read lessRead more

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...
Read lessRead more

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.

Fade to black

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 Amazon.com 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...
Read lessRead more