VideoNuze Posts

I'm pleased to be joined once again by Colin Dixon, senior partner at The Diffusion Group, for the 118th edition of the VideoNuze Report podcast, for Jan. 27, 2012. In this week's podcast we discuss Netflix's Q4 '11 results, which were released this past Wed. afternoon.

The good news is that the results showed some glimmers of improvement in Netflix's business, but as I explained yesterday's post, net subscribers continued to be adversely affected by last summer's Qwikster and price increase decisions. The group showing the most attrition is the "hybrid" DVD/streaming U.S. subscribers who saw their rates increase by up to 60%. Colin and I dig into why this group is in fact still so vital to Netflix's success, and the risks posed by the company's strategy of pursuing streaming all out.

Colin also shares recent research TDG has done indicating that for those Netflix streaming subscribers retaining the service, satisfaction is running very high. That, combined with Netflix's own announcement that 2 billion hours of streaming content were consumed in Q4 '11, are encouraging indicators that the streaming service is resonating. Still, the big looming question for 2012 is how robust net U.S. subscriber growth will be. Listen in to learn more!

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If you're a Netflix follower (and these days, who in the industry isn't?) then this morning you're being greeted by many cheerful headlines regarding the company's Q4 '11 results, released late yesterday. A sampling includes: "Netflix shares surging after a blowout quarter," "Netflix wins over analysts by adding customers," "Netflix recovers subscribers" and "A turnaround at Netflix, as its mail sector shrinks." All of that is contributing to a run-up in Netflix's stock price, based on optimism that the company is back on track, and ready to surge again.

To be fair, given the negative sentiment shrouding Netflix for the last 6 months and dramatically reduced expectations, the results did show some glimmers of a turnaround. But, if you read past the headlines, look closely at the numbers and listen to management's discussion of the results, what emerges for me are the staggering ongoing consequences of last summer's Qwikster/price change fiasco, the continued pursuit of an unnecessary, hyper-aggressive phase-out of its core DVD-by-mail business, murkiness about its international prospects and near-certain intensifying competition in streaming. Given all that, I think it's still way too early to conclude Netflix is back on track, particularly in the U.S.

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Netflix will report its Q4 '11 earnings later today, but whereas I've taken stands in past quarters about subscriber acquisition results, this time around I can only say your guess is as good as mine. Subsequent to last summer's Qwikster and price increase fiascos, Netflix entered a zone of uncertainty about whether and how its subscriber growth in its critical domestic segment will restart.

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I'm pleased to be joined once again by Colin Dixon, senior partner at The Diffusion Group, for the 117th edition of the VideoNuze Report podcast, for Jan. 20, 2012. In this week's podcast we dig into UltraViolet (UV), the digital library/format recently launched to enable consumers with multi-device streaming access to Hollywood movies.

It's still early days for UV, but there have been some hiccups in the rollout, with numerous longer-term challenges looming as we detail. Still, UV is a critical initiative to help studios reinvigorate the sell-through model that has declined in the wake of lower-cost options like Netflix, Redbox, Amazon, etc. and so there are strong incentives to make it successful. We also review new UV messaging that's rolling out and what's ahead for 2012. Listen in to learn more!

Click here to listen to the podcast (18 minutes, 2 seconds)



Click here for previous podcasts

The VideoNuze Report is available in iTunes...subscribe today!