Six Out Of 10 Digital Movies Are Streamed via Netflix - High-Def Digest Forums
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Old 03-15-2011, 10:58 AM
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Default Six Out Of 10 Digital Movies Are Streamed via Netflix

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According to a recent review of the home video market in the U.S. by The NPD Group, a leading market research company, Netflix's share of digital movie units -- downloaded or streamed -- reached 61 percent between January 2011 and February 2011, followed by Comcast at 8 percent, and a three-way tie for third at 4 percent among DirecTV, Time Warner Cable, and Apple. Based on information from NPD's new VideoWatch Digital tracking service, digital video now makes up one quarter of all home video volume.

"Sales of DVDs and Blu-ray Discs still drive most home-video revenue, but VOD and other digital options are now beginning to make inroads with consumers," said Russ Crupnick, entertainment industry analyst for NPD. "Overwhelmingly digital movie buyers do not believe physical discs are out of fashion, but their digital transactions were motivated by the immediate access and ease of acquisition provided by streaming and downloading digital video files."

NPD also compared consumer-reported satisfaction with four modes of digital-video acquisition: electronic sell-through (EST), Internet VOD (iVOD), cable VOD, and subscription streaming. Consumers clearly recognize that EST services like iTunes have the most "current releases available," while Netflix streaming gets credit from customers for providing the best "overall shopping experience" and "value for price paid."
http://www.npd.com/press/releases/press_110315b.html
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Old 03-15-2011, 11:05 AM
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digital video now makes up one quarter of all home video volume

Digital video doesn't make up close to 1/4 of all revenues. This has got to have studios going nuts.

I wonder what would happen if digital downloads actually cost as much as physical disc rentals. Or at the very least, generated the revenue of physical disc rentals. I wonder just how much that percentage would drop for people viewing them.

Right now, digital downloads, especially with Netflix, are basically a nearly free way to enjoy a large library of movies. You get variety, and you get a huge cost savings with a ton of convenience.

Now, if it cost you $3.00 for that movie, instead of FREE, would it still be as popular?

61% at Netflix - 4% at TWC, DirecTV, and Apple

Seems like when there is an actual cost related to viewing the video, consumers basically have no interest at all in making that purchase.

Digital is the future, but it still has a long way to go.
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Old 03-15-2011, 11:14 AM
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Originally Posted by AV_Integrated View Post
digital video now makes up one quarter of all home video volume

Digital video doesn't make up close to 1/4 of all revenues.
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?

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I wonder what would happen if digital downloads actually cost as much as physical disc rentals. Or at the very least, generated the revenue of physical disc rentals. I wonder just how much that percentage would drop for people viewing them.
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.
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Old 03-15-2011, 06:45 PM
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Originally Posted by PSound View Post
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.

Curious PSound (because I dont know ) Is the 2 billion before they (netflix corp.) pay for all the building rent, utilities and employee pay and benefits for all those who are stuffing envelopes in the warehouses? Also is the 2 Billion before they take away all the money it costs for postage every year and the cost of maintaining servers and infrastructure for the streaming films? Or is the 2 billion after that has all been paid for?
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Old 03-15-2011, 06:54 PM
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Originally Posted by towergrove View Post
Curious PSound (because I dont know ) Is the 2 billion before they (netflix corp.) pay for all the building rent, utilities and employee pay and benefits for all those who are stuffing envelopes in the warehouses? Also is the 2 Billion before they take away all the money it costs for postage every year and the cost of maintaining servers and infrastructure for the streaming films? Or is the 2 billion after that has all been paid for?
The $2B is Gross Revenue.

When you add all their expenses, you are left with Net Revenue - their actual profit.
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Old 03-15-2011, 06:58 PM
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Originally Posted by towergrove View Post
Curious PSound (because I dont know ) Is the 2 billion before they (netflix corp.) pay for all the building rent, utilities and employee pay and benefits for all those who are stuffing envelopes in the warehouses? Also is the 2 Billion before they take away all the money it costs for postage every year and the cost of maintaining servers and infrastructure for the streaming films? Or is the 2 billion after that has all been paid for?
> $2 billion in revenue from consumers, which is how all the revenue we talk about is discussed. Including revenue from retailers before ANY expenses (either from studios, wholesalers or retailers) are factored in.
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Old 03-15-2011, 07:31 PM
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Originally Posted by PSound View Post
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%.
Netflix's +$2 billion was total, not just VOD, wasn't it? And the DEG digital revenues include VOD over cable/satellite, the article appears to be talking about internet VOD only.

I'm not belittling streaming, just clearing up the muddle.

Ray Von
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Old 03-15-2011, 07:35 PM
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Originally Posted by Ray Von View Post
Netflix's +$2 billion was total, not just VOD, wasn't it? And the DEG digital revenues include VOD over cable/satellite, the article appears to be talking about internet VOD only.

I'm not belittling streaming, just clearing up the muddle.

Ray Von
I believe (???) Netflix's revenue is counted as DVD rental revenue.
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Old 03-15-2011, 07:38 PM
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Originally Posted by Lee Stewart View Post
I believe (???) Netflix's revenue is counted as DVD rental revenue.
I've heard that too, PSound seems to be lumping the whole lot in as digital though.

Ray Von
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Old 03-15-2011, 08:12 PM
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HMM's version:

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Netflix Dominates Digital Movie Consumption
15 Mar, 2011
By: Erik Gruenwedel


Netflix subscribers are streaming more than six out of 10 movies watched online, topping digital sellthrough and transactional video-on-demand, or VOD, according to a new report from The NPD Group.

The Port Washington, N.Y.-based research firm said Netflix accounted for 61% of the movies downloaded or streamed from January through February, followed by Comcast at 8%, and a three-way tie for third at 4% among DirecTV, Time Warner Cable and Apple.

Digital video now accounts for 25% of overall home entertainment consumption, including electronic sellthrough, Internet VOD, cable VOD and subscription streaming, according to NPD.


“Sales of DVDs and Blu-ray Discs still drive most home-video revenue, but VOD and other digital options are now beginning to make inroads with consumers,” said Russ Crupnick, entertainment industry analyst for NPD.

“Overwhelmingly digital movie buyers do not believe physical discs are out of fashion, but their digital transactions were motivated by the immediate access and ease of acquisition provided by streaming and downloading digital video files.”


According to NPD’s video survey of more than 10,000 respondents, Apple’s iTunes platform received higher marks (than Netflix) for availability of new releases, while the Los Gatos, Calif.-based online disc rental pioneer received top marks for ease of use and economic value.
http://www.homemediamagazine.com/ele...sumption-23337
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