Is the Subscription Model ‘Broken’? - High-Def Digest Forums
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Old 12-05-2011, 09:36 PM
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Default Is the Subscription Model ‘Broken’?

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What a spectacular fall the industry has seen in the past few months with Netflix. Once the darling of Wall Street, the company is now turning into a cautionary tale. Once a shining example of the new world of all-you-can-eat streaming entertainment delivery, the company has now been termed a ‘broken’ model.

“In our view, the company’s business model was broken when it raised prices [in September] for its hybrid [disc and streaming] customers,” Wedbush Securities analyst Michael Pachter wrote in a note, as he downgraded the stock.

Wow. The change in Netflix’s fortunes could give you whiplash.

Recently, I wrote about the ownership model that had dominated our business with the advent of DVD. As I said, ownership is a very efficient way to get consumers the movies they want — without making them pay for a bunch of titles (via licensing deals with Netflix) that they don’t ever want to see. As long as consumers can access those titles they buy, not only on their big-screen TV via Blu-ray disc, but on any device they want — perhaps via the newfangled UltraViolet cloud-based locker — the ownership model seems to be the most viable way to serve the consumer.

When I like a song, I own it, and I play it for friends so that they, too, can appreciate it. The same holds true for a movie. When I like a film, I would like to own it, both on disc and in the cloud, so that I can show it to friends that they may also appreciate it and perhaps buy it themselves.
This only works in the subscription model if Netflix offers ALL the movies and TV shows that I like — and that all of their subscribers like. Frankly, there isn’t enough money in the world to satisfy that constituency. Netflix can try to satisfy enough subscribers to keep them just happy enough not to quit the service, but the content owners soon will squeeze Netflix to the point where even that is not possible.

I don’t envy the Netflix team as they try to make the subscription model pay dividends. Pleasing everybody may prove impossible.
http://www.homemediamagazine.com/ste...n-model-broken
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Old 12-05-2011, 10:05 PM
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To borrow from Kosty:

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The article is of course from The Media Maverick Greg Sandoval Stephanie Prange the reporter editor in chief who covers digital OD entertainment for CNET HMM so its hardly unexpected that is her point of view and spin.
cut and paste.
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Old 12-05-2011, 10:13 PM
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Originally Posted by silverado View Post
To borrow from Kosty:



cut and paste.
I dont borrow from Kosty...Sorry but I will say that I am open to reading opinions of others even if they dont conform to my point of view or strict ideology. Please feel free to cut and paste that.
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Old 12-05-2011, 10:19 PM
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Originally Posted by silverado View Post
To borrow from Kosty:



cut and paste.
Of course. One has to consider the source of any editorial.

But then again she did not use a phrase like Netflix is in "its death throws" like Sandorval did gratuitously in referring to DVDs decline just to highlight his obvious bias.

But she is writing to the audience of people in the home video sell through and rental industry from retailers to the studios where Netflix unlimited subscription streaming and DVD rental model is a competitor to most of them.

But just like the CNET Digital Maverick article had valid points so does she despite one having to take into account her point of view and institutional perspective.

The digital beat writer for CNET is of course going to slant toward having a digital bias just as the editor of Home Media Magazine is going to have a bias toward sell through and rental of physical media.
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Old 12-05-2011, 10:26 PM
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Originally Posted by Kosty View Post
Of course. One has to consider the source of any editorial.

But then again she did not use a phrase like Netflix is in "its death throws" like Sandorval did gratuitously in referring to DVDs decline just to highlight his obvious bias.

But she is writing to the audience of people in the home video sell through and rental industry from retailers to the studios where Netflix unlimited subscription streaming and DVD rental model is a competitor to most of them.

But just like the CNET Digital Maverick article had valid points so does she despite one having to take into account her point of view and institutional perspective.

The digital beat writer for CNET is of course going to slant toward having a digital bias just as the editor of Home Media Magazine is going to have a bias toward sell through and rental of physical media.
HI Kosty- Everyone has their own slant on a particular subject but I still enjoy reading others points of view even if I disagree. Opens the mind up to other ideas.
Note: Kosty I sent you a PM over at HDF, having trouble uploading your request.
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Old 12-05-2011, 10:28 PM
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Originally Posted by towergrove View Post
HI Kosty- Everyone has their own slant on a particular subject but I still enjoy reading others points of view even if I disagree. Opens the mind up to other ideas.
Note: Kosty I sent you a PM over at HDF, having trouble uploading your request.
Check there now, I have some questions for you.
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Old 12-05-2011, 11:35 PM
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Originally Posted by towergrove View Post
I dont borrow from Kosty...Sorry but I will say that I am open to reading opinions of others even if they dont conform to my point of view or strict ideology. Please feel free to cut and paste that.
Did i say you borrowed from Kosty?? Please feel free to point that to me.
I do have a point of view about some formats, but a strict ideology, not for a plastic disc or data in the cloud.
Here is my point:
Kosty himself has acknowledged that HMM is an OD "trade" magazine and biased towards the physical formats.
CNET, as you know, is biased towards the EST/digital side of things. I took a qoute that Kosty made and applied it to the same circumstance. Same point Kosty made expanded.
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Old 12-05-2011, 11:39 PM
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Quote:
Originally Posted by Kosty View Post
Of course. One has to consider the source of any editorial.

But then again she did not use a phrase like Netflix is in "its death throws" like Sandorval did gratuitously in referring to DVDs decline just to highlight his obvious bias.

But she is writing to the audience of people in the home video sell through and rental industry from retailers to the studios where Netflix unlimited subscription streaming and DVD rental model is a competitor to most of them.

But just like the CNET Digital Maverick article had valid points so does she despite one having to take into account her point of view and institutional perspective.

The digital beat writer for CNET is of course going to slant toward having a digital bias just as the editor of Home Media Magazine is going to have a bias toward sell through and rental of physical media.
She did not get into the "death throws", but if she was seriously looking at the subscription model, would that not include amazon? Seems like an attack directed squarely at Netflix ignoring all other subscription models.
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Old 12-05-2011, 11:49 PM
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Did you notice Silverado? It's all attacks against Netflix. Even the other mail thread. They fail to mention how it will also affect Blockbuster. The vendetta against Netflix is amazing from some of these posters.
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Old 12-05-2011, 11:59 PM
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The stock price tells the tale. Netflix made some horrible decisions and alienated their customers. With rising content costs for streaming, and disc customers unhappy and leaving, plus competition from Amazon, there is a tough road ahead for Netflix. I suspect they will either be sold, be forced into revenue sharing with the studios, or will raise prices within the next 12 months or so. If the cable companies also get more aggressive about charging for bandwidth usage, it could really hurt Netflix.
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