Archives For Netflix

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.)

So Amazon’s accidentally leaked all-you-can-eat video streaming has come to pass. And the Hulu, Netflix competitor is free to all Prime members. Well, all full price Prime subscribers. As it looks like those of you on free or discounted subs have been left out. I’m an occasional, but current, Prime member — $79 a year gets me free 2 day shipping and discounted overnight or same-day shipping ($3.99) on physical goods.

So my first thought this AM was, I’m cancelling Netflix! Or Hulu Plus! But it’s not yet clear what sort of quality one can expect from Amazon’s catalog of commercial free video content. Indeed, Engadget took a quick look and wasn’t overly impressed with the picture. Additionally, while Amazon offers over 90,000 pieces of digital video content… only 5,000 are available for “free.” And who knows what determines the selection and rotation.

But I have to say I’m impressed with the wide variety of devices Amazon was able to launch the service with. Continue Reading…

Netflix has been working on a mobile app for Android devices for some time, but hasn’t released anything yet due to the lack of system-wide DRM (digital rights management) on Android phones and tablets. Now the company is showing off Netflix streaming on Android devices using Qualcomm’s next-generation processors.

VentureBeat covers the deal that seems to suggest Qualcomm chips are the first ones that will be fast enough to reliably stream content, but that’s not exactly true. Netflix apps work pretty well on iOS and Windows Phone 7 devices. But Qualcomm is building DRM and security features directly into its next-generation chips which will make it possible for Netflix to stream content without worrying about piracy.

MobileCrunch has a video of the app in action after the break… or rather, in inaction, since the wireless network at Mobile World Congress wasn’t reliable enough to actually stream any video. But you can check out the demo of the user interface. Not surprisingly, the app looks a lot like the Netflix app for the iPhone. Read the rest of this entry »

The folks at Netflix ran a most interesting post yesterday on the company’s technical blog (via ReadWriteWeb). According to the director of engineering, one Netflix device is responsible for roughly 50% of total API calls. The same device, however, isn’t responsible for a comparable level of streaming traffic. In order to cut down on the “chattiness” level, the Netflix team is looking at redesigning the API for greater efficiency. And while the engineers are at it, they figure they’ll play with reducing overall payload (bits delivered) at the same time.

It’s great that Netflix is planning to improve its API, but the story certainly makes me wonder: which Netflix device is causing all that trouble? Is it one that continually drops signal, as some have reported with their TiVo boxes? Or is it one with a more advanced and therefore more demanding UI, like Dave’s favorite, the PS3? Netflix certainly won’t name names, but perhaps somebody else out there has an educated guess. I’d say it’s not the Roku given how long the little-box-that-could has been out, and the fact that API requests started seriously spiking only a few months ago. Anyone else willing to speculate?


ZNF friend Tech of the Hub has round up a variety of Netflix streaming hardware for comparison. They’re not the first to go down this path, but they are the most recent. Although I’d have liked to see an Xbox 360 in the mix, the Roku, Apple TV, Wii, PS3, and TiVo analysis is thorough… if subjective in many respects.

Tech of the Hub concludes the Apple TV provides the best experience. However, I’d argue the continually updated HTML5 PS3 UI and higher quality content puts it at the head of the pack. And we can probably all agree that TiVo has the most dated Netflix interface, yet the app’s limitations are significantly offset via TiVo’s universal search capabilities and “input one” position on the television.

At the end of the day, the best Netflix player is the one you have around. Fortunately there are quite possibly hundreds of devices to choose from.