Six Out Of 10 Digital Movies Are Streamed via Netflix

[PSound]

BTW... doing a simple bit of math (61% of 1/4) shows that Digital consumption outside of Netflix is 10% of the Home Video market while generating 13% of Home Video revenue.

[Lee Stewart]

We know the DEG is inaccurate on this front.

There is no way one can look at the Netflix model (including their consumer consumption and content acquisition costs) and not recognize a majority of their revenue as being digital (subscription VOD to be exact).

They are not inaccurate. They are tracking EST and VOD/PPV. Netflix has refused to give any type of breakdown on their subs (as in who is only paying for streaming) and that is probably why they don't track it.

If someone is a sub of Netflix and has a OD program, then that revenue goes towards OD rental revenue. The fact that they also stream? Not important. It's an add-on.

[luclin999]

Explain.

Last year EST did $683 million. VOD did $1.8 billion. Neither of those numbers include Netflix, which did > $2 billion.

Even without Netflix counted (which is 60% of the digital market), Digital was 13% of all Home Video revenue in 2010. Adding in Netflix revenue puts digital revenue right at 25%. And that percentage will be even higher in 2011.


And since you seem to be lost of the financial fundamentals... That digital revenue is all extremely high margin. What do you think the studio margin is on a physical media rental through Redbox, or Netflix?



And Redbox dominates the transactional physical media rental market at $1 a day. VOD is already a $1.8 billion dollar a year market. How much do you think VOD would increase if VOD rentals were $1 a day?


Price and value have an impact. I have repeatedly stated the importance of value to boost sell-through numbers.

You trying to make this a physical versus digital battle is ridiculous. It is a value model, which is why Redbox renting physical media at $1 a day (including new releases) is growing, and Netflix providing a large library of content for $8 a month is wildly popular.

Its amazing how you love to pretend that you are an "authority" on this and condescend to lecture people when you can't even get it straight yourself.

Those VOD numbers include non-studio related events such as the sports and other programming not available anywhere else as well as hotel VOD fees where the service is for many the only option while staying there.

Netflix streaming allows people to watch tons of B and C grade movies that most would never pay $0.50 to rent thus explaining the high relative volume. That and the ability to watch old episodes of Columbo are its bread and butter as a "streaming" service.

You constantly trying to convince everyone that Netflix is the next coming of the Messiah is what is ridiculous.

[nextoo]

Sigh.. those VOD numbers include non-studio related events such as the sports and other programming not available anywhere else as well as hotel VOD fees where the service is for many the only option while staying there.

Netflix streaming allows people to watch tons of B and C grade movies that most would never pay $0.50 to rent thus explaining the high relative volume. That and the ability to watch old episodes of Columbo are its bread and butter as a "streaming" service.

You constantly trying to convince everyone that Netflix is the next coming of the Messiah is what is ridiculous.

It's $7.99 a month. Nothing more. Nothing less.

[Lee Stewart]

BTW... doing a simple bit of math (61% of 1/4) shows that Digital consumption outside of Netflix is 10% of the Home Video market while generating 13% of Home Video revenue.

What Consumers Watch: Nielsen’s Q1 2010 Three Screen Report

http://blog.nielsen.com/nielsenwire/...screen-report/

[PSound]

They are not inaccurate. They are tracking EST and VOD/PPV. Netflix has refused to give any type of breakdown on their subs (as in who is only paying for streaming) and that is probably why they don't track it.

If someone is a sub of Netflix and has a OD program, then that revenue goes towards OD rental revenue. The fact that they also stream? Not important. It's an add-on.

That is blatantly incorrect on every front.

There is not a single entity in the financial or entertainment industry who does not clearly understand that Netflix is growing it's revenues due to it's digital offering.

The details in the article alone show that Netflix streaming by itself is now responsible for 15% of all Home Video consumption and growing quickly. Just like content acquisition for Netflix is now focused on serving the streaming customer.

Even how we know that as Netflix gains 2-3 million subscribers per quarter, their expected rate of disc shipments are expected to go down overall. A stat that is only possible if exiting subscribers are replacing their usage of discs-by-mail to streaming more than new subscribers requests for discs. A staggering thought when discussing a potential 8 - 12 million additional subscribers in 2011.

[luclin999]

It's $7.99 a month. Nothing more. Nothing less.

Exactly why people break down and watch movies like Mega Piranha and Jaws: the Revenge.

They aren't paying extra for it so they might as well see just how bad the movie really is.

[Lee Stewart]

That is blatantly incorrect on every front.

There is not a single entity in the financial or entertainment industry who does not clearly understand that Netflix is growing it's revenues due to it's digital offering.

The details in the article alone show that Netflix streaming by itself is now responsible for 15% of all Home Video consumption and growing quickly. Just like content acquisition for Netflix is now focused on serving the streaming customer.

Even how we know that as Netflix gains 2-3 million subscribers per quarter, their expected rate of disc shipments are expected to go down overall. A stat that is only possible if exiting subscribers are replacing their usage of discs-by-mail to streaming more than new subscribers requests for discs. A staggering thought when discussing a potential 8 - 12 million additional subscribers in 2011.

You think you can provide accurate proof as to how many people are signing up for the $7.99 streaming only plan?

Until you can, you are just twisting facts to meet your agenda.

Link? (Good Luck with THAT)

[PSound]

You think you can provide accurate proof as to how many people are signing up for the $7.99 streaming only plan?

Until you can, you are just twisting facts to meet your agenda.

Link? (Good Luck with THAT)

More than 1/3 of new Netflix subscribers are signing up for streaming only, with almost the entire remainder opting for the 1 disc unlimited program. Data that suggest discs are now seen as the "add-on" to get to the core streaming service.

Review Netflix's earnings reports, earnings calls and letter to investors. It is all there.

[nextoo]

Exactly why people break down and watch movies like Mega Piranha and Jaws: the Revenge.

They aren't paying extra for it so they might as well see just how bad the movie really is.

I'm with you to a point but Netflix does have the following:

25% of 2009 and 2010 new releases

246 NYT Critics Picks

1,642 "Fresh" Rotten Tomato choices

Along with hundreds if not thousands of independent films that are starving for an audience.

Add all of the television series from multiple decades that can be watched in order at the subscribers whim and it is no wonder that at $7.99 it is considered a popular ticket.

[PSound]

I'm with you to a point but Netflix does have the following:

25% of 2009 and 2010 new releases

246 NYT Critics Picks

1,642 "Fresh" Rotten Tomato choices

Along with hundreds if not thousands of independent films that are starving for an audience.

Add all of the television series from multiple decades that can be watched in order at the subscribers whim and it is no wonder that at $7.99 it is considered a popular ticket.

Plus they may have a David Fincher first run TV series soon....

Netflix Is Said to Be Close to Acquiring a Television Show

Netflix may be on the verge of acquiring its first original television series, “House of Cards,” a drama to be directed by David Fincher.
The negotiations were first reported Tuesday afternoon by Deadline.com, which said that the two-season, 26-episode commitment would be valued at more than $100 million.

An executive close to the negotiations confirmed the report that Netflix had entered the bidding for the show. There was still considerable uncertainty Tuesday about the terms of the potential deal, and a Netflix spokesman declined to comment.

A second executive close to the negotiations dismissed the $100 million estimate, noting that there was no deal between the parties yet, and that in the event a deal is struck, it would cost Netflix significantly less. The people spoke on condition of anonymity because they were not authorized by their bosses to speak about the negotiations.

Picking up the exclusive rights to a television show would effectively make Netflix a network similar to ABC or HBO and would underscore just how disruptive the company has become to the media business.

The size and scope of the potential deal astonished television industry executives, who noted that it was highly unusual to order an entire season of a show — never mind two — without first producing a pilot episode.

http://www.nytimes.com/2011/03/16/bu...16netflix.html

[luclin999]

More than 1/3 of new Netflix subscribers are signing up for streaming only, with almost the entire remainder opting for the 1 disc unlimited program. Data that suggest discs are now seen as the "add-on" to get to the core streaming service.

Review Netflix's earnings reports, earnings calls and letter to investors. It is all there.

So no link then? Just your interpretation of the financials?

[nextoo]

So no link then? Just your interpretation of the financials?

I believe you can find this in the management comments included in the most recent 10-Q.

[luclin999]

I'm with you to a point but Netflix does have the following:

25% of 2009 and 2010 new releases

246 NYT Critics Picks

1,642 "Fresh" Rotten Tomato choices

Along with hundreds if not thousands of independent films that are starving for an audience.

Add all of the television series from multiple decades that can be watched in order at the subscribers whim and it is no wonder that at $7.99 it is considered a popular ticket.

It's popular because it is cheap, however it is also lacking in quality (both in content and delivery).

Netflix is attempting to become the "fast food" of the home entertainment industry and frankly that concept is detrimental as a whole to the people who actually what to watch good movies in a high definition format.

Add to that the fact that Data Caps are likely to force them to compress their streaming content even further and frankly I can't see why anyone who would bother to post on a forum devoted to high Definition media would be anything but appalled by their current marketing strategies.

[nextoo]

Plus they may have a David Fincher first run TV series soon....



http://www.nytimes.com/2011/03/16/bu...16netflix.html

That's a $100 million dollar bet.

But more importantly it shows that a company with a 20+ million subscriber base has flexibility.