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New Blockbuster Movie Pass Features DVDs in Starring Role
Irony was on full display at the Dish Network press conference announcing the new Blockbuster Movie Pass, as the very first benefit CEO Joe Clayton pointed to was access to 100K+ DVDs by mail (with no extra charge for Blu-ray). That's right - despite Netflix's willingness to practically blow up the company in its belief that "streaming is the future," good old Blockbuster is returning to its roots, emphasizing physical media's primacy, at least for now. That Blockbuster was outgunned by Netflix's own superior DVD-by-mail service years ago just adds to the sense that "all that's old is new again."
Categories: Aggregators
Topics: Blockbuster Movie Pass, DISH Network, Netflix
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Netflix Now Conceding Price Hike Is Also Hurting Q3 New Subscriber Acquisitions
Just when you thought things couldn't get worse for Netflix, here's a tidbit of information that could have significant consequences for the company: in a
Q&A session at the Goldman Sachs Communacopia conference on Wednesday (replay here), CFO David Wells conceded that while cancellations due to the price increase announced in July accounted for most of the 1 million downward revision in end of quarter subscribers, the change has also adversely impacted new subscriber acquisitions (though he declined to quantify by how much). I believe this is the first time a Netflix executive has acknowledged a double whammy resulting from the price increase - both higher than expected churn and a slowdown in additions.
Categories: Aggregators
Topics: Netflix
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Winners and Losers Due to Netflix's Decision to Split DVDs
Netflix's bizarre decision to separate its DVD business from its streaming business will have significant ramifications for the video ecosystem. Below are some of the clear winners, potential winners and clear losers.
Categories: Aggregators
Topics: Amazon, Apple, Blockbuster, DISH, Facebook, Google, Hulu, Netflix, Redbox, VUDU, YouTube
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Netflix's DVD Split Is Yet Another Self-Inflicted Wound
How many self-inflicted wounds can a company take before its mortality is threatened? When it comes to Netflix, the question is taking on increasingrelevance. The company that could do no wrong for the past two years first shot itself by announcing an onerous price increase without any real attempt to explain itself or soften the blow. The initial consequences of that decision came last week in the form of a 1 million subscriber downward revision and a 50 point drop in its stock price. Now Netflix has followed up with another bewildering move, announcing a re-branding and separation of its DVD by mail business as "Qwikster" complete with an independent web site. In my view this is another self-inflicted wound with even more serious implications.
Categories: Aggregators
Topics: Netflix
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Netflix's Q3 Subscriber Loss Could be Churn AND Acquisition Related
With Netflix today lowering its Q3 U.S. forecast by 1 million subscribers to 24 million, many observers are focused on the culprit being higher churn induced by the company's recent pricing change. Churn could well be the big driverhere, but the cause could also be the other side of the equation: a slowdown in new subscriber acquisitions, particularly for those just wanting the DVD-only plan. Until we get the actual breakdown with the Q3 results, we won't know for sure, but if it's both factors, then Netflix might be finding itself at the beginning of a very different chapter in its evolution.
Categories: Aggregators
Topics: Netflix
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Netflix To Lose U.S. Subscribers in Q3, First Loss In Over 4 Years
Netflix revised its guidance for Q3 this morning, now forecasting that it will end the quarter with 24 million U.S. subscribers. That's 1 million less than the 25 million it previously forecast as the mid-point for Q3 subscribers (despite the loss, Netflix is maintaining its financial guidance for the quarter). Since Netflix ended Q2 with 24.59 million U.S. subscribers, it is now expecting to lose 590K subscribers in Q3, the first time the company has contracted since Q2 '07 when it lost 55K subscribers.
The expected Q3 loss brings to a screeching halt the torrid growth Netflix experienced over the 6 most recent quarters, when it doubled in size, adding over 12 million subscribers in the U.S. The Q3 reversal can be traced to the controversial decision Netflix ham-handedly announced in July to split its DVD and streaming businesses, therefore resulting in steep monthly price increases for a large number of its existing subscribers. As seen in the chart below that Netflix released this morning, the primary driver of the 1 million downward revision from July 25th is on the DVD-only side, which is now forecast at 2.2 million subscribers vs. the 3 million expected. The 200K balance is from streaming-only subscribers. This split is a good news-bad news story for Netflix.
Categories: Aggregators
Topics: Netflix
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Amazon Planning to Give Away Its Instant Videos With the New Kindle Tablet? Uh Oh.
Catching up on my reading last night, I noticed toward the end of the first hands-on review I've seen about Amazon's forthcoming Kindle tablet
something that could be very disruptive. According to the writer (so this is opinion, not fact), to support the Kindle tablet, Amazon plans to give buyers a free subscription to Amazon Prime.
Of course, since last February Amazon Prime subscribers also gain access to Amazon's growing streaming Instant Videos catalog. So this would mean that Kindle tablet buyers would be getting lots of great video (and more to come) for no charge and presumably no ads either. If Amazon were to begin giving away high-value content as a marketing tactic supporting its devices, it could fundamentally change the game for everyone.
Categories: Aggregators, Devices
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Inside Starz's Netflix Quandary
Here's a thought experiment: Imagine you're running a major cable TV network and your fastest-growing distributor (and largest, by number of subscribers) offers to license your content for approximately $300 million each year, a sum that is about 10 times the amount it has been paying under the current deal struck less than 3 years ago. The new deal would have a very material impact on your P&L as your company's operating income last year was about $400 million. Seems like a pretty tough offer to turn down, right?
However, there are certain catches. First, this distributor is considered a disruptive competitor by all of your other long-time distributors (who collectively paid you about $1.3 billion last year). If you proceed with this new deal, you're concerned that these other distributors may retaliate by paying you less when they renew their deals in the future. Second, this distributor wants a degree of exclusivity that limits your ability to make incremental deals with companies it deems as competitive. Third, key suppliers of your content have escalation clauses that entitle them to incremental payments if you proceed with this new deal, which would in turn erode your margins. And last, but not least, the manner in which this distributor wants to compensate you would alter the way you are positioned in the market - from a "premium" to a "basic" channel - consequently risking a perception that your content will be irreparably devalued by consumers and other distributors.
Got all that? If so, then you grasp the quandary that Starz's executive team found itself in as it evaluated a huge license renewal offer from Netflix. Last Thursday Starz announced its decision, choosing to rebuff Netflix's rich offer, at least for now. But as the math below shows, combined with what I've learned from individuals familiar with Starz's economics, Netflix's putative $300 million/year offer was far more than Starz could generate otherwise, making its decision to walk away all the more difficult.
Categories: Aggregators, Cable Networks
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Hulu Japan Subscription Service Goes Live
Hulu Japan has gone live, marking Hulu's first international expansion. Hulu Japan runs 1,480 yen per month, or about $19, which is more than double the $8 per month that Hulu Plus in the U.S. runs. However, Hulu Japan is ad-free, whereas Hulu Plus includes the same ad load as the free Hulu.com site. The initial content line-up includes films and TV shows from CBS, NBCUniversal International Television Distribution, Sony Pictures Entertainment, Twentieth Century Fox, The Walt Disney Company (Japan) which includes content from Disney/ABC Television Group and The Walt Disney Studios, and Warner Bros. Hulu indicated that additional content is forthcoming, including Japanese-produced plus other Asian content.
Categories: Aggregators, International
Topics: Hulu Japan
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Digital Movie Purchase and Rental Activity Remains Anemic
Earlier this week IHS Screen Digest Media Research released market share information for the top 5 U.S. digital/online movie stores for the first half of 2011, which together represent approximately 96% of the market. In addition, IHS released information on revenues generated for both purchase/download (Electronic sell-through or "EST") and rental (Internet video on demand or "iVOD").
In the chart below, I've taken the IHS data a step further to estimate each of the top 5 stores' revenues and transaction volume from EST and iVOD (note IHS only provides combined EST+iVOD market share information so for simplicity I have assumed each individual store's share is the same for both EST and iVOD though no doubt there are some variations). The data leads to a clear conclusion that years after movies have been available for digital purchase/download and rental, activity remains anemic, suggesting very low levels of consumer interest, particularly as compared with DVD purchase or rental/subscription options.
Categories: Aggregators, Commerce, FIlms
Topics: Amazon, IHS, iTunes, Microsoft, Sony, VUDU, Wal-Mart
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comScore: VEVO is Top YouTube Partner Channel By Far
Music video site VEVO attracted nearly 60 million unique viewers and generated over 844 million videos viewed to its YouTube partner channel in July, making it by far the most popular YouTube partner channel, according to new data released by comScore.
comScore has recently begun measuring traffic for a select number of YouTube partners. As the chart below shows, Warner Music's channel was second in unique viewers with 31 million+, while Machinima's was second in videos viewed with 265 million+. From its inception, YouTube has been providing technology to VEVO, which was founded by Sony, Universal and Abu Dhabi Media, with EMI licensing its music videos.
Categories: Aggregators, Music
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Morgan Spurlock's New Series Premieres on Hulu, With Heavy Monetization
This week Morgan Spurlock's new six-part documentary series "A Day In The Life" premiered on Hulu, which is its exclusive distributor. The premise is that
each episode follows one well-known personality for a full day, giving the viewer an intimate look into their life. The first episode focused on Virgin Group's Richard Branson. Future episodes are set for release on Wednesdays.
I thought the episode was well done and fortunately it doesn't slip into a "Lifestyles of the Rich and Famous" mode, instead mostly focusing on Branson's promotional tactics in support of Virgin America's new Chicago routes (note "Entourage" fans will enjoy a cameo from actor Adrian Grenier). Perhaps the most interesting thing about "A Day In The Life" wasn't the show itself but how heavily Hulu is monetizing it with ads, illustrating the point I was making just yesterday about online video's potential for heavier ad loads.
Categories: Advertising, Aggregators
Topics: Hulu, Morgan Spurlock
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Fox's New 8-Day Window Obsoletes Hulu's Simple User Experience
If one of the things you liked most about Hulu has been its simple, straightforward user experience - where TV programs could be quickly found and viewed - then Fox's new 8-day authenticated pay-TV window is going to feel like a big hassle. And if ABC and NBC, Hulu's other broadcast content partners and owners, adopt a similar approach to Fox, then it's really going to feel like going back to the dark ages of user experience.
Fox's authentication window means that during the first 8 days after an episode's air date only current subscribers of certain pay-TV services (DISH Network for now) or Hulu Plus can watch that episode. That in turn means that when searching for a new episode on Hulu, the resulting experience will be quite different than it has been.
Categories: Aggregators, Broadcasters, Cable TV Operators, Satellite, Telcos
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Scarcity Breeds Aggregation Opportunities
Following is a guest post from Sam Vasisht, president of 21TechMedia which specializes in advisory services, business and marketing consulting for digital media companies. Sam was previously VP of Marketing at On2 Technologies, now part of Google's WebM initiative. He blogs at www.techmediatalk.com and can be followed on Twitter @21TechMedia.
Scarcity Breeds Aggregation Opportunities
by Sam Vasisht
Based on news from the world of online video over the past few weeks, the dust is starting to settle on a number of topics that had been contentious, if not controversial for some time. Among them is the affirmation of online services as a bona fide monetization model for major media. This was stated by Viacom on its earnings call two weeks ago. Similar signals from other corners of the industry range across Netflix's price increases in its continuing quest for premium content licensing; Amazon stepping up its game in video streaming with a licensing deal with NBC and a few weeks earlier with CBS; and Hulu attaching attractive 5 year content licenses with its rumored sale offer while signing up additional content deals as well.
The race for content aggregation is on.
Categories: Aggregators, Devices
Topics: Apple, Best Buy, Hulu, NBC, Netflix, Viacom
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MOVIECLIPS.com Partners With YouTube, Raises $7 Million
MOVIECLIPS.com has struck a deal with YouTube so that 20,000+ licensed HD movie clips will now become available in the "Movie Extras" section of
YouTube movies, as well as on the MOVIECLIPS YouTube channel. In addition, MOVIECLIPS is announcing a $7 million Series B financing led by MK Capital and including prior investors.
The YouTube distribution deal is significant in giving MOVIECLIPS' library broader exposure and monetization potential than it has had. MOVIECLIPS has struck licensing deals with six Hollywood studios. MOVIECLIPS uses its technology to generate up to 1,000 points of metadata, so that users can quickly find the best of Hollywood's most memorable moments.
Categories: Aggregators, Deals & Financings, FIlms
Topics: MOVIECLIPS.com, YouTube
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Viacom is Bullish on Digital Distribution Opportunities
Add Viacom to the list of established media companies benefiting from digital distribution. In its fiscal Q3 earnings call today, Viacom wouldn't break out specific digital distribution revenue but noted that it is "significant" and will contribute to "high single to low double-digit revenue growth per year for the foreseeable future." BTIG's Rich Greenfield estimated digital revenue in the quarter was $70 million, which Viacom executives didn't comment on. Viacom sees multiple drivers for digital growth: an increasing number of digital distributors, international expansion and strong demand for Viacom's content in particular, which skews younger and is geared to digital users.
Categories: Aggregators, Cable Networks
Topics: Viacom
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Hulu Pushes Further Into Originals With Morgan Spurlock's "A Day In the Life"
Hulu is partnering with director Morgan Spurlock ("Super Size Me") to exclusively distribute "A Day In the Life," a six-part documentary series in which each episode will follow one celebrity for a full day. The first episode, which debuts on August 17th, will focus on Virgin's Richard Branson. Episodes will roll out on subsequent Wednesdays on Hulu.com and Hulu Plus and will feature singer will.i.am, comedian Russell Peters, musician Girl Talk and others. Each episode is 22 minutes and will include ads. Spurlock provides more background in a video interview after the break.
Categories: Aggregators
Topics: Hulu, Morgan Spurlock, Netflix
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Friday Fun: Jason Alexander Lampoons Netflix Price Increase on Funny Or Die
A little Friday fun - if you haven't yet seen former "Seinfeld" star Jason Alexander's hilarious video lampooning Netflix's recent price increase on Funny or Die, it's well worth it. Alexander's mock heartfelt pitch for the "Netflix Relief Fund" is sure to resonate for everyone who's been up in arms about Netflix's recent price change. Video after the jump. Enjoy!
Categories: Aggregators
Topics: Funny or Die, Netflix
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VideoNuze Report Podcast #106 - Fox's 8-Day Pay Window and Netflix's Q3 Churn - July 29, 2011
Daisy Whitney and I are pleased to present the 106th edition of the VideoNuze Report podcast, for July 29, 2011.
In this week's podcast, Daisy and I dive into two topics - Fox's new exclusive 8-day authentication window, and Netflix's Q3 '11 subscriber churn. Regarding Fox, this week the network announced that it would limit online access to programs in the first 8 days following their airing to viewers who are authenticated as pay-TV subscribers (or are Hulu Plus subscribers). As I wrote, I think the move has significant implications for Hulu, and the broader online video landscape. We discuss Fox's motivations, the role of retransmission consent fee payments and what might be coming next.
We then shift to discuss estimates of Netflix's Q3 '11 subscriber churn, due to its recent price change. By my calculations, Netflix itself is estimating it could lose approximately 6.5 million subscribers in the U.S. in Q3, which would be a record for the company. The amount attributable solely to the price change could be in the 2.5 - 3 million subscriber range. In the wake of all the speculation about how subscribers will react, Daisy discloses the surprising decision she and her family have made with regard to their Netflix subscription. Listen in to find out!
Click here to listen to the podcast (14 minutes, 34 seconds)
Click here for previous podcasts
The VideoNuze Report is available in iTunes...subscribe today!Categories: Aggregators, Broadcasters, Podcasts
Topics: FOX, Hulu, Netflix, Podcast
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Amazon Gets Universal Movies to Stream That Netflix Already Has
Amazon announced a new licensing deal with NBCU that gives it streaming rights to a batch of older movies from Universal Pictures, bumping to 9,000
the number of movies and TV shows available for its Amazon Prime Members. However, the move is unlikely to have the folks at Netflix quaking in their boots; like Amazon's licensing deal with CBS from last week, virtually all of the Universal movies are already available on Netflix (by my count 9 of the 11 titles identified in today's press release can be streamed on Netflix while only "Elizabeth" and "Fletch" are available solely on DVD).
Don't get me wrong, more content is always a good thing, and these deals, along with an acquisition of Pushbutton, a UK app developer for connected devices, suggest things may be ramping up at Amazon. But the content deals do underscore the catch-up game that Amazon is playing with Netflix. That's the dynamic in today's market - Netflix got a head start in aggregating Hollywood content for online distribution. Now, to the extent it has a willingness to pay, Amazon must go do similar deals.
Categories: Aggregators, FIlms, Studios
Topics: Amazon, Netflix, Universal
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