Archives For Netflix

Netflix (NFLX) released its quarterly earnings earlier this week and, while the market was somewhat underwhelmed, subscriber numbers are impressive. In fact, GigaOm declares, “Netflix Now Officially Has More Subscribers Than Comcast.”

Indeed, at first blush, Netflix’s 23.6 million subscribers does exceed Comcast’s 22.8 million. But what exactly does that suggest and is it a reasonable comparison?

From a financial stand point, the proclamation doesn’t hold water as Comcast’s revenue is orders of magnitudes larger than Netflix’s. And it’s not like these two are necessarily direct competitors. Sure, there’s a cord cutting contingent that relies on Netflix to augment their “television” viewing. But many subscribe to both pay television services and Netflix, as I do. Additionally, Netflix is available nationwide whereas Comcast only operates in select regions. So, perhaps a comparison to HBO’s 28+ million subscribers is more appropriate. But, again, these movie services are not mutually exclusive.

At the end of the day, Netflix’s success and service is admirable (although its streaming content catalog is still lacking), and illustrates folks are seeking out alternate distribution methods. Yet, at the end of the day, its rise seems inversely proportional to the demise of Blockbuster’s retail video rental business, rather than a large scale assault on the established premium TV providers.

This post was originally published on the Dice Blog Network.


DirecTV (DTV) hit up some of their customers today with a web survey. A very interesting web survey. As it’s nearly all about Netflix (NFLX) – usage patterns, both physical discs and online streaming. Most intriguing is revelation of a DirecTV “concept” that would provide a “Netflix-like service” to existing satellite television subscribers:

In this next section, we would like you to evaluate a new service that DIRECTV is thinking about offering to their customers. DIRECTV plans to offer a streaming-only Netflix-like service for a flat fee per month, which would appear as a line item on your monthly bill.

  • The service would allow you to stream thousands of movies and television shows over a broadband internet connection to your television, computer or tablet.
  • The content available would likely be past season of current shows as well as older TV series and older movie released (released more than 5 years ago).
  • You could watch as many programs as you want for one flat monthly efe, similar to what Netflix streaming offers.

Continue Reading…

PSN Down For The Count

Dave Zatz —  April 26, 2011

As we creep closer to a week of PlayStation Network downtime, gamers are increasingly frustrated… and concerned. When will PSN be back online and is our credit card info safe? (Yes, I too have a PSN Wallet.) Unfortunately, Sony isn’t saying much of anything at all. From their latest blog post:

I don’t have an update or timeframe to share at this point in time. As we previously noted, this is a time intensive process and we’re working to get them back online quickly. We’ll keep you updated with information as it becomes available.

On a number of occasions, Sony reps have stated they’ll keep us updated. Yet, other than indicating a security breach of some sort, they haven’t really shared all that much. And, on Day 6, the word “quickly” should be excised from the conversation. So, yeah, still no PS3 Call of Duty, Black Ops multiplayer and Netflix access remains hit or miss.

On the rumor and speculation front, unconfirmed reports over the weekend seemed to suggest that service would be restored today (Tuesday). We shall see… Additionally, some suspect there may have been PSN data loss or corruption – which is contributing to the extended network outage. But, until Sony fesses up, we just don’t know.

Of course, Sony isn’t the only provider to go dark for a time. Amazon recently experienced a rough week and here’s a list of some historic Internet meltdowns. This too shall pass.

As the story goes, Sony voluntarily brought down the PlayStation Network last Wednesday in reaction to a security breach:

An external intrusion on our system has affected our PlayStation Network and Qriocity services. In order to conduct a thorough investigation and to verify the smooth and secure operation of our network services going forward, we turned off PlayStation Network & Qriocity services.

Unfortunately, no one knows when the PSN will be up once again and Sony’s not saying. In fact, their most recent blog update doesn’t provide much hope of a timely resolution:

We are working around the clock to bring [the PSN] back online. Our efforts to resolve this matter involve re-building our system to further strengthen our network infrastructure.

Wow, rebuilding the network on the fly? I wouldn’t be surprised if PSN is down a few more days… Continue Reading…

Hulu screenshot Q1 2011 revenue report

Hulu posted some pretty awesome revenue numbers last night, including projections that the company will make close to half a billion dollars in 2011 and drive 300 million dollars in revenue to its content partners. However, all of that success comes with a price. Like every other over-the-top video provider, Hulu has had to limit its catalog in order to keep content owners happy and stay financially viable. And that makes it hard to maintain loyal viewers. The company says it is on track to exceed one million Hulu Plus subscribers this year, which suggests growing interest in Hulu’s premium platform. But I have to question whether that growth is sustainable over the long term. Once the ability to access television online becomes more commonplace, will Hulu be able to continue wooing consumers and survive  as a stand-alone platform?

Two arguments against Hulu come to mind. First, now that cable companies are taking TV everywhere, Hulu has to contend with an industry that is masterful in paying out cash to its content providers. In a shootout between the two, I’d bet on the cable companies. Second, Netflix has proven, so far, that it’s possible to be a successful streaming company. However, even Netflix faces serious challenges in the future, and it’s hard to imagine that two companies in such a difficult space can survive without strong differentiation. Netflix has a serious leg up on Hulu with more than 20 million paying subscribers to date. Can Hulu really compete with that?

Hulu certainly still has options ahead, including the opportunity to build out an original content strategy and/or offer live television. And it still has Comcast as an investor, albeit one without management control now that the NBCU/Comcast merger has come to fruition. Will that be enough? Only consumer audiences will tell. But I’m less optimistic now than I was six months ago, particularly given how quickly cable companies have pushed their iPad TV apps to market.


Without any PR fanfare, Apple TV was updated yesterday to include live MLB and NBA video streaming (to subscribers of those respective services). Additionally, Apple TV now joins the PS3 in offering 5.1 surround sound for select Netflix titles. Interestingly, Apple continues down the path of offering curated aTV channels versus launching a full fledged App Store. Regardless, it’s officially time for Roku to be scared.

Roku offers much more content and in some cases comes in even cheaper than the $99 Apple TV. Yet Apple TV is a super sleek device with shelf space at Best Buy and the Apple Store. “Apple” also obviously carries a ton of positive brand recognition. Compared to Roku… Despite moving a million units, the company/product is unfamiliar to many.

What I’d like next from any of these small media streamers is a live simulcast of pretty much any cable news network. We’ll see if any have interest in testing the over the top (OTT) waters and potentially alienating their MSO partners. Unless the cable-cos are the providers.

Blockbuster’s Downward Spiral

Dave Zatz —  February 25, 2011

Online MBA Programs (who?) has compiled a variety of stats into compelling series of graphics that document “How Netflix Destroyed Blockbuster.” While the inverse parallels are dramatic and it’s worth perusing, I remain convinced that Blockbuster is fully responsible for their downward spiral.

Many have pointed to Blockbuster’s missed opportunity of acquiring Netflix on the cheap a decade ago, but the end result would have have likely remained the same given their leadership and vision. And an inability to execute.

Take for example, Blockbuster’s failed forays beyond the brick & mortar. They launched their own mail order DVD service and acquired Movielink for online video. Which saw little uptake and questionable management commitment. Then there was that poor video streaming box that they failed to market (or update) and then quickly buried. Continue Reading…

As we know, the video streaming sites like Hulu and Netflix (now Amazon, too) serve up is quite variable. Titles come, and titles go. Emphasizing the complex (and costly) licensing forces at play. Interestingly, Netflix may harness the power of their community as one factor in determining the content (physical and digital?) they go after. From Communications VP Steve Swasey:

If we have a certain number of Queue adds, we will buy the title.

On one hand, this seems to be a fairly strong indicator of interest. On the other, I’m surely not the only customer who completely bypasses titles that aren’t “in stock.” So consider this a Netflix PSA — load up your queue with the titles you want, not just the video on hand.

Postscript: As we contemplate a reduced role in the Googlesphere, Netflix’s Steve Swasey was the very first industry guy who talked to us on the record way back in 2005. Time flies when you’re having fun. (And good riddance to Sony’s UMD.)