Amazon Closing in on Netflix in Alternative TV Space
Netflix is still the king of the paid alternative TV market, but Amazon is making inroads with its Instant Video service, according to a new survey from 451 Research's ChangeWave service.
Netflix's share of the market declined two points since the previous survey in February, though the company still managed to nab 82 percent, making it the leader among online video services, the survey found. Amazon Instant Video, however, increased five points since the previous survey to nab 22 percent of the market. Apple iTunes came in third with 16 percent followed by Hulu Plus with 8 percent.
The data is based on a September survey of 1,115 North American consumers.
|"While Netflix still holds the largest share by far of the paid alternative TV market, consumers continue to shift towards Amazon's Instant Video service," ChangeWave's Andy Golub said in a statement. "As Amazon's TV and movie content becomes more competitive with Netflix, its popularity is surging among consumers."|
Blockbuster Abandons Plans for Netflix-Like Streaming Service
Good news for Netflix: Dish has abandoned plans to turn its Blockbuster subsidiary into a streaming video service that would rival Netflix's Watch Instantly.
A Dish spokesman today confirmed that Blockbuster does not have a future in streaming. Charlie Ergen, co-founder and chairman of Dish, broke the news earlier today in an interview with Bloomberg.
"You make a lot of mistakes in business," Ergen told the news service. "I don't think Blockbuster is going to be a mistake, but it's unclear if that's going to be a transformative decision."
Dish acquired Blockbuster last year for $320 million after it made the winning bid in Blockbuster's bankruptcy auction. By September, Dish announced plans for a streaming and DVD movie rental service with Blockbuster that was bundled in with Dish's pay TV service. At the time, Dish said it was prepping a standalone, Netflix-esque streaming service as well, but nothing was ever announced.
Bloomberg said Dish envisioned a system whereby Blockbuster stores would sell gadgets that could be used to stream Blockbuster content, but Dish failed to secure regulatory approval to use satellite spectrum for terrestrial data and voice transmission.
More Consumers Still Opting for DVDs, Blu-ray Over Streaming
Despite the increasing adoption of streaming media services and the convenience they offer, consumers still largely prefer good old-fashioned physical disks when they want to watch a movie, according to a new report from The NPD Group.
The report, which is based on a survey of approximately 21,752 U.S. consumers, revealed that the majority of feature-length movies are still rented on physical discs. Sixty-two percent of all movie rental orders during the first half of the year were for physical DVDs or Blu-ray discs that came from kiosks, video stores, and Netflix movies by mail. The other 38 percent were for digital copies of movies from subscription streaming, pay TV Video on Demand (VOD), and Internet VOD services.
But while physical discs still rule the movie rental scene, digital movies are catching up. Year-over-year disc rentals declined by 17 percent, while digital movie rentals increased by 5 percent, according to the report. The increase in digital movie rental orders is largely attributable to Netflix Watch Instantly.
"Kiosk and subscription Internet streaming are generating strong user satisfaction ratings, including future rental intent, price, and value, which is reflected in market-share gains," Russ Crupnick, senior vice president of industry analysis for The NPD Group, said in a statement. "Netflix is frequently the most popular video application on connected devices, so an increase in households with Web-connected Blu-ray Disc players, tablets, and smart TVs will lead to still more video streaming activity."
Netflix Returns to Profit Amidst Mixed Subscriber Numbers
Netflix rebounded from a $4.6 million first-quarter loss to post net income of $6.2 million on solid revenues of $889.2 million in its quarter ending June 30, the company reported Tuesday.
The service now has about 24 million domestic streaming subscribers, up from 23.4 million in March. But in the U.S., roughly 50 percent fewer new streaming subscribers signed up with Netflix than in the second quarter of 2010, the company said, dismissing the numbers from the year-ago quarter as a "an anomaly due to our mid-year price changes." However, Netflix expects the new subscriber rate in the third quarter of 2012 to return to levels similar to those of the same quarter two years ago.
DVD subscriptions, which the company appears to believe will eventually be phased out, fell to 9.2 million in the second quarter from 10 million.
The streaming video and DVD rental service said that in the second half and early 2013 it would continue to expand in international markets, bring its second batch of originally produced television content to viewers, and create its own content delivery network (CDN).
"Given our size and growth, it now makes economic sense for Netflix to have its own CDN. As a result, we recently announced that we are enabling ISPs to get Netflix video data from Open Connect, a single-purpose Netflix CDN," a letter to shareholders signed by CEO Reed Hastings and chief financial officer David Wells stated.
Netflix Streaming Tops 1 Billion Hours in June
Netflix users streamed more than one billion hours of content online during June, the most in a single month.
Netflix CEO Reed Hastings made the announcement Tuesday in a post on his Facebook page. Hastings congratulated the company's chief content officer, Ted Sarandos, and his content licensing team for the achievement, and predicted that new shows on tap for later this year will ratchet up video streaming rates even further.
"Netflix monthly viewing exceeded 1 billion hours for the first time ever in June," Hastings wrote. "When House of Cards and Arrested Development debut, we'll blow these records away."
Netflix last month announced the launch of its own content delivery system called Open Connect Network. The move was prompted by the explosion in the amount of video Netflix customers are watching on the company's Watch Instantly streaming network.
Netflix, based in Los Gatos, California, revealed back in January that users watched approximately 2 billion hours of content during the fourth quarter. Also, despite its missteps last year, Netflix managed to surge past Apple's iTunes to become the largest U.S. online movie service in revenue terms, IHS iSuppli reported last month.
Netflix Tops iTunes as Largest Online Movie Service
Despite its missteps last year, Netflix still managed to surge past Apple's iTunes and become the largest U.S. online movie service in revenue terms, according to new data from IHS iSuppli.
Netflix jumped from less than 1 percent of U.S. online movie revenue in 2010 to 44 percent in 2011, IHS said. Apple, meanwhile, dropped from 60.8 percent in 2010 to 32.3 percent market share in 2011, even though it saw "strong revenue growth," IHS said.
"2011 marked a sea change in the online movies business that saw the balance of consumer spending shift from a DVD-like transactional model to more TV-like subscription approach," Dan Cryan, research director for digital media at IHS, said in a statement. "The online movie business more than doubled in 2011 to reach $992 million and it is expected to double this year as well."
Ironically, one of the factors that contributed to Netflix's growth in the space were the price hikes that initially alienated so many of its customers. Last year, Netflix split pricing for its streaming-only and DVD rental services, charging $7.99 for each rather than $9.99 for both. That decision to start charging directly for online access helped boost its revenue share, IHS said.
Netflix Pushes Updated iOS App
Netflix today rolled out an updated iOS application with a look and feel more consistent with the recent browser changes.
This update brings the Netflix "browse" feature to iOS, along with larger, less intrusive playback controls, thumbnail images on the scrub bar and easy access for subtitle settings, Netflix said in a blog post.
Apple users will also see an expanded settings menu that can limit streaming video to a Wi-Fi connection only, reducing 3G data usage.
The changes are in line with a recent update to Netflix's Web video player, which provided a refreshed look and some added features for functionality.
According to the company's blog, today's changes include more user control over the size of the player, video that now stretches to full window size, full screen mode with options to view TV show information, as well as an icon-centric toolbar.
"Perhaps the biggest change is to the 'Back to Browse' option," which used to sit at the bottom right of the control bar, Netflix said. The update moved it to the top left of the screen; text will explain its functionality when you hover over the arrow icon with the mouse.
iPad owners got a high-res Netflix tablet update in March, which included VoiceOver repairs, improved playback on external displays, and other minor tweaks.
Netflix: Users Who Left After Price Hike Are Re-Joining
All those Netflix customers who jumped ship after last year's price hike/Qwikster debacle? It appears that a good number of them have returned to the service.
Speaking at today's J.P. Morgan Technology, Media and Telecom Conference, Netflix CFO David Wells said that approximately a third of new subscribers are "re-joins," or people who dropped Netflix but decided to return.
Netflix keeps customer data for about a year, so that number could be higher, but "but to the extent that we can match the address and credit card information," re-joins are one-third of new customers, Wells said, which is "encouraging."
Last summer, Netflix announced plans for a price hike. A one-DVD plus streaming subscription that was previously $9.99, for example, jumped to $7.99 each, or $15.98 per month. Later, Netflix said it would split the DVD and streaming businesses into two separate companies, dubbed Netflix and Qwikster, but user backlash prompted Netflix to ditch the Qwikster idea. For more, see Netflix Ditches Qwikster: What You Need to Know.
Report: Netflix Looking to Partner With Cable Companies
Netflix chief Reed Hastings is in talks with U.S. cable companies to add the movie-streaming service to their cable packages, Reuters reported.
Citing sources familiar with the matter, Reuters said that Hastings met with senior executives at "some of the largest U.S. cable companies" in recent weeks in an attempt to add Netflix as an on-demand option for cable subscribers.
If such deal is struck, cable companies could begin offering Netflix as an option that could be added to a subscriber's bill, Reuters says. At least one cable operator could offer Netflix by the end of the year.
Such a move would put Netflix in direct competition with HBO, whose content is already offered by cable companies as an on-demand option in addition to the live channels. At an investor event in San Francisco last week, Hastings said partnering with cable companies would be a natural progression for the company.
"It's not in the short term, but it's the natural direction in the long term," Hastings said, according to Reuters. "Many (cable service providers) would like to have a competitor to HBO, and they would bid us off of HBO."
All These Movies Will Vanish From Netflix Tomorrow
For Netflix subscribers, tonight may seem like the last night on Earth. That's because more than 840 movies from Starz will vanish from the Netflix library on Wednesday, leaving the service without its premier source of first-run movies.
In September, Netflix and Starz decided to end an agreement that allowed movies and TV shows shown on Starz to be broadcast via Netflix. That deal ends on Tuesday, but Netflix will show the Starz content through an undisclosed period on Wednesday, Feb. 29.
Netflix could also strike a last-minute deal or deals to save some of the movies before they disappear from its service.
So what movies do you need to prioritize tonight, before they vanish? Fortunately, TVandMoviesNow has a list of all them, prioritized by user rating. In other words, if your son wants to watch Toy Story 3, tonight's the last night to do so before he'll have to accompany you to the video store. Ditto for Tangled, Howl's Moving Castle, Secretariat, and the popular TV series "Spartacus" and "Party Down."
TVandMoviesNow has also helpfully listed the Starz movies that are also available on the Amazon Prime service, including Toy Story 3, Patton, and Warren Miller: Children of Winter. But the comparison also shows what quality programming Starz added to the Netflix lineup, and what shows Amazon lacks.