2for1 WSJ:Internet Killed the Video Star/Reuters:1 million Xbox members use Netflix - High-Def Digest Forums
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Old 02-05-2009, 04:24 PM
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Default 2for1 WSJ:Internet Killed the Video Star/Reuters:1 million Xbox members use Netflix

Wall Street Journal:

Internet Killed the Video Star

Quote:
It may be an entertainment company CEO's worst nightmare: waking up, looking in the mirror and seeing a music-company CEO.

That day may be here sooner than anyone in Hollywood would want to believe. Straws in the wind in recent weeks suggest that the recession may be accelerating a structural change toward free or low-cost Web video -- either television or movies -- and away from traditional delivery methods, such as cable TV or DVDs.

Time Warner Cable CEO Glenn Britt on Wednesday warned that with more TV content being put on the Web, "we are starting to see the beginnings of cord cutting where people, particularly young people, are saying, 'All I need is broadband. I don't need video.'" Such a shift would endanger cable-network revenue, he said. But it would also eventually hurt the studios that supply the programming.

Meanwhile, Walt Disney CEO Robert Iger on Tuesday night had to explain a 64% drop in studio operating income in the December quarter caused by lower DVD sales. He said the DVD business may be suffering more than just a cyclical downturn. Increasing consumer choices, including videos available in many different outlets, may have a long-term impact on the DVD business, he said.

Indeed, Netflix last week said its "instant-watch" online service, which lets mail-order subscribers stream TV shows or movies, is being used in "ever greater numbers."

Major studios generate about 75% of their nearly $19 billion in annual U.S. feature-film revenue, post-theater, from sources like DVDs and TV sales, estimates Adams Media Research. Cable networks often generate more than half of their revenue from fees paid by cable and satellite operators. Both these pots of money are at risk.



Admittedly, the media companies control the content and can choose to pull it back from the Web or to raise the price they charge online services for their content. But they also need to respond to consumers' demands, by putting more content online. After all, the music industry tried to hold back the online flood and was almost drowned in the process.

So how should the industry respond? By continuing to embrace the Web, rather than retreating. Some executives at Time Warner Cable have floated the idea of limiting access to online TV-network video only to those who subscribe to cable-TV video packages. So far, the idea hasn't gained momentum, which is fortunate. Given the amount of content already on the Web, it isn't likely to work.

Instead, the media companies need to rethink how they operate. Mr. Iger seems to have the right idea. He outlined plans to cut costs in Disney's home-video business and to be choosier about movies that get made.

What they can't do is ignore reality. To misquote Stephen Stills, there's something happening here and what it is, is increasingly clear.
Word for word what I've been saying would happen is starting to happen. Reminds me of when MTV started - "Video killed the radio star".

Seperately, from Reuters:

Netflix says 1 million Xbox members use movie service

Quote:
LOS ANGELES (Reuters) - Online DVD company Netflix said on Thursday that one million Microsoft Xbox 360 video game console users have activated Netflix's movie streaming service in the past three months since the two companies formed a partnership.

Netflix said the Xbox LIVE community has watched 1.5 billion minutes of movies and TV episodes through its Watch Instantly video service, but did not say how many subscribers it has actually gained from the partnership.

Netflix, best known for renting DVDs by mail, is the only company offering a subscription-based streaming video service as other rivals like Amazon.com, Apple, and Blockbuster compete with a la carte, pay-per-view rentals.

Analysts have been watching for data on the alliance as an important gauge of the emerging market for movies delivered over the Web, particularly as traditional media companies like Walt Disney this week have reported declining DVD sales and said the traditional business for delivering home video needs to be revised.

Netflix last month said its stronger-than-expected quarterly results were propelled by growth in its Web video streaming service and that streaming was "energizing" its growth.

Netflix has offered the Watch Instantly streaming service for over two years, but it was originally only available on PCs. It has since offered streaming Netflix video from the Internet through various devices, including the Roku settop boxes, the Xbox, LG Electronics products and others.

The Netflix application offers Xbox LIVE Gold members, who pay $50 a year to Microsoft for various different applications, the ability to instantly view content from Netflix on a TV via the Xbox 360 system if they are also members of Netflix service, priced at around $9 per month to include Watch Instantly unlimited streaming.

Netflix's library of about 12,000 titles for instant viewing includes mostly older Hollywood titles as major movie studios have resisted making new releases available digitally for subscription services.

Netflix offers newer titles on DVD or high-definition Blu-ray Disc through its mail-order service, through a library of more than 100,000 titles.
Consumers falling all over themselves to sign up for online video. So what happens when studios get desperate enough to put some HD video day and date releases on Netflix, and charge a couple of bucks more per month for HD streaming.
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Old 02-05-2009, 04:33 PM
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Problem is that the Studios are losing more money from lost physical media sales than they are making from on-line purchases. The cost structure for on-line purchases is not setup correctly to replace the revenue of physical media one for one. Either movies and T.V. are going to have to shift to low budget productions, or the way movies are sold on-line will have to change in a way that increases revenue for the Studio.

Personally, I wish DLC movies/TV could co-exist with physical media like BD and everyone get to eat there proverbial cake too But it IS happening... the video industry is going to have to figure this whole thing out just like the music industry did (oh, that's right... the music industry is still working on it :P !!! )

Long live blu-ray!!!
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Old 02-05-2009, 05:04 PM
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It IS happening now but the providers are going to ensure it doesn't get too excessive. Charter, Comcast, AT&T, Time Warner, Frontier, et al are all in the process of making sure of it.
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Old 02-05-2009, 05:15 PM
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All this says is that 1 out of 20 XBOX 360 owners streamed a netflix movie. Or that 2 out of 20 streamed 2. The ratio is likely much smaller than that.

DD isn't going anywhere. Did you read todays announcement that Charter is going to a 100GB per month cap? That's not going to cut it. There's no "caps" on the number of Blu-rays you can watch. And they'll look and sound a hell of a lot better of course.

Same 'ol Mike, same 'ol sad song. Keep swimming upstream dude.
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Old 02-05-2009, 05:17 PM
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I doubt he can tell upstream from downstream. Internet caps will not allow mass adoption of high definition movie streaming anytime soon.
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Old 02-05-2009, 05:17 PM
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Where are you getting your information that netflix doesn't support HD streaming? I've streamed netflix HD my self, it's actually very good quality for something you get as a free value added service.
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Old 02-05-2009, 05:20 PM
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Quote:
Originally Posted by mikemorel View Post
Wall Street Journal:

Internet Killed the Video Star

Word for word what I've been saying would happen is starting to happen. Reminds me of when MTV started - "Video killed the radio star".

Seperately, from Reuters:

Netflix says 1 million Xbox members use movie service

Consumers falling all over themselves to sign up for online video. So what happens when studios get desperate enough to put some HD video day and date releases on Netflix, and charge a couple of bucks more per month for HD streaming.
So there are 16+ million Xbox 360 owners out there and 1 million use Netflix for streaming? That is 6.25%. And you call that "falling all over themselves"? And how much of that content is HD vs SD? And how many o those 1 million subscribers are going streaming only and not renting any optical discs?

As for your comment on Netflix allowing day and date streaming, the CEO already stated that they have no plans to go to this model. He said they will leave that space for Apple and Microsoft (PPV model) and are sticking with their subsciption model. If you want day and date you will need to rent or buy the optical disc if you are a Netflix user. The Netflix CEO also stated that optical disc rentals will most likely not peak until 2015-2018. Downloads have a long way to go if thy are going to replace optical.

And we wont even talk about bandwidth caps or the average broadband speed in the US...

Sorry Mike.
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Old 02-05-2009, 05:22 PM
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Quote:
Originally Posted by crazzeto View Post
Where are you getting your information that netflix doesn't support HD streaming? I've streamed netflix HD my self, it's actually very good quality for something you get as a free value added service.
Didn't know that, guess it's new.
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Old 02-05-2009, 05:26 PM
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Originally Posted by Fettastic View Post
Didn't know that, guess it's new.
Netflix on xbox 360 introduced netflix HD... I'm guessing this was a part of the business agreement between microsoft and netflix. Shortly there after all other netflix streaming devices received updates to make them compatible with netflix HD.
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Old 02-05-2009, 05:38 PM
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Here are the comments direct from Netflix themselves regarding the PPV model:

Quote:
Colin Sebastian Ė Lazard Capital Markets

Do you have any plans to expand Internet delivery from streaming videos into the rental or purchase of digital downloads?


Reed Hastings

Thatís not an area as I went through my comments about Pay-Per-View whether Pay-Per-View is streaming or download itís essentially the same thing. Thatís really about our brand, our brand is really about monthly entertainment and subscription and thatís what weíre focused on. So we donít have any plans to be involved in those markets where Amazon, Apple, Blockbuster and a few others play.
Quote:
Reed Hastings

Then you asked about DVD length, nothing has changed our view that our shipments and rentals will continue to grow and peak sometime in 2015 to 2018 as best we can tell.
Quote:
Nearly all the CE generated subscribers also rent DVDs from Netflix which really reinforces the importance of the DVD streaming combination subscription
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