Tag Archives: Netflix

Taking An Umbrella

Sometimes I think that changing landscape of the media business is like the weather:  everyone complains about it but almost no one does anything.  In fact, if you spend any time at all following developments in the media space, you read a lot more about the old models trying to sue the new out of existence (Aereo, YouTube, etc.) than you do about new models being adopted quickly by the older business models.  So today, we have a little food for thought and an example of what can happen when a newer company adapts rapidly.

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As reported by multiple sources this morning:

Netflix‘s Q1 numbers are in, and the company reports that it now has 29.17 million subscribers in the US alone — that’s 2 million more than the number of subscribers the streaming video provider had at the end of 2012. Globally, Netflix reports more than 36 million subscribers, an addition of 3.05 million new customers when compared to the end of 2012/previous quarter…This is, for the first time, greater than HBO’s domestic subscription base of 28.7 million.

And another point:

Netflix isn’t a cable network, but it competes for attention with television fare beyond just HBO. And in that context, Netflix commands more attention—87 minutes per US household per day—than any American cable network.

30 million subs at $8 at month is a quarter of a billion dollars every month in gross revenues and high engagement.  Not too shabby.  That money is funding original programming such as House Of Cards (the implications of which I discussed earlier).  Moreover, House Of Cards itself was bought using all of the knowledge Netflix had on its subscribers’ viewing habits and preferences, something older media doesn’t have since the traditional TV ratings provide next to nothing of value when compared to the granular data streaming services have.  Anyone see that changing?

A couple of years ago Netflix was tied in to physical media, which is still a small percentage of its business.  It was smart enough to pivot to streaming, taking advantage of the growth of broadband and the ubiquity of mobile devices that can’t handle the physical media upon which Netflix had originated   Sure, there was a rather large misstep along the way as they separated the DVD and streaming price plans.  However, they did an excellent job of recovering over the last 18 months, mostly because they listened to their customers and provided increased value by adding more original programming.

The lesson I take from this is that spending energy defending an outdated business model rather than moving forward to take advantage of the new opportunities provided by market changes is ultimately a recipe for failure.  Like the weather, the change is going to happen.  Either dress appropriately or drown in the rain.  You with me?

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House Of Cards

You may have read about the release of the series House Of Cards on Netflix.

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It’s another original series created by the streaming service and it takes their game up a notch.  As USAToday wrote in this piece, it’s a $100 million gamble.  If you’re a Netflix customer it’s easy to find.  If you’re not, you can watch the first episode free  at netflix.com/houseofcards for the month of February.  We’ve been watching it and think it’s terrific.  I also think it’s a terrific example of good business practices.  Let me explain. Continue reading

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What’s On Your TV Might Not Be TV

Some information I think is significant came out a couple of weeks ago and I made myself a note to share it.

English: A child watching TV.

(Photo credit: Wikipedia)

Sorry for the delay!  It has to do with yet another tipping point being reached and this one has to do with how we use the “cool fire” that’s the focal point of a room in many homes – the TV.  The folks at NPD Group put out a release that summarized the study:

According to The NPD Group,… over the past year, the number of consumers reporting that the TV is their primary screen for viewing paid and free video streamed from the Web has risen from 33 percent to 45 percent. During the same period, consumers who used a PC as the primary screen for viewing over-the-top (OTT) streamed-video content declined from 48 percent to 31 percent. This shift not only reflects a strong consumer preference for watching TV and movies on big screen TVs, but also coincides with the rapid adoption of Internet-connectible TVs.

In other words, people figured out how to shift the viewing for the desktop to the TV.  Why is this significant?  In my mind, it make Netflix a cable channel in consumers’ minds and not a streaming service.  That’s an example.  Of those viewing online video on the TV, 40 percent use their connected TVs to stream video via Netflix, 12 percent access HuluPlus, and 4 percent connect to Vudu.

Another reason it’s significant is pretty obvious – when the TV is being used to stream web content it’s not being used to watch “traditional” TV, at least not in “live” mode.  Of course, there is a ton of time-shifting going on and it’s a lot of what we think of as “TV” that’s being shifted and watched.  Still, one wonders how this affects what used to be the fundamental underpinning of the business: the ability to deliver ad impressions to marketers.

Unless you’re a live-sports addict (ahem…), cord cutting is rapidly becoming an option for a lot of people   While this might be another nail in the coffin of the traditional PC (hello tablets), I think it’s also something to which TV service providers need pay attention (which I know they are).  The TV is a screen, just like the PC, the tablet, or the mobile device.  It’s becoming just as content-provider agnostic as are those devices.

Do you watch web video on your TV?  How?  Apple TV?  XBox?  Own a web-enabled TV?  Have you cut the cord?  What’s that like?

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10 Years After

I was thinking over the weekend about what a very different place the world is going to be from a technical and media perspective in just a few years.  Of course, if you take a few minutes to think back and recall how the world was in 2002, just a decade ago, you’d be missing YouTube, iPhones, Facebook, Twitter, and hybrid cars.  Every one of those things is a daily part of my life and probably yours as well.

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What got me thinking about this was this:

New research from Leichtman Research Group finds that 38% of all U.S. households have at least one television set connected to the internet via a video game system, a Blu-ray player, an Apple TV, a Roku set-top box and/or the TV set itself. This number is up from 30% last year, and 24% from two years ago. Game consoles are the key devices within this category, as 28% of all households have a video game system connected to the web.

I spend some time each week watching Hulu+, Netflix, YouTube, and other services through my Xbox.  That time spent is not incremental to normal TV viewing – it’s content I find more interesting than what’s available.  That behavior ties in with the research:

  • 13% of Netflix subscribers would consider reducing spending on their multichannel video service because of Netflix, down from 21% last year.
  • 16% of all U.S. adults watch full-length TV shows online at least weekly, up from 12% last year.
  • 19% of mobile phone owners watch video on their phones on a weekly basis; while 9% of all U.S. adults watch video on an iPad/tablet.

So I sort of had this flash forward.  If traditional cable boxes become anachronisms, what else goes with them?  I think desktop computers will be history soon, as tablets and other mobile devices access cloud-based services and data.  Even though I have many computers in my home, I spend nearly all my time on a laptop and could very easily transition to a tablet with a keyboard.  Skype and Google Voice could replace my landline and just may shortly.  I’m sure you can add a few legacy technologies/services that need either to pivot or die.

In only 10 years, a lot of our behavior has been changed by a few services and technologies.  In another 10, it will all be different again.  Are you ready?  Is your business?

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When Is “Good” Good Enough?

Today’s question is “when is good good enough?”  All of us try to do the best we can at all times I’m sure, but is that always necessary?  What if you’re able to make a product of slightly lower quality that allows you to sell it for a lot less, thereby making it more accessible for consumers?  Maybe the consumer can tell the difference but I’ve got a bunch of real-world examples of things you might be using where I’ll bet you can’t.  Here’s why the issue matters. Continue reading

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A Random TV Thought

This tidbit crossed the wires here at the world headquarters yesterday and I want to bring it to your attention:

A new study from Altman Vilandrie says just 1/3 of 18-34 viewers in the U.S. now watch TV during normal broadcast slots, preferring instead on-demand programming via Netflix and Hulu. The study also makes a connection between increased control over when video is watched to how it is watched with nearly 1/2 of respondents saying they prefer smartphones to TVs.

“Oh sure – another TV death story,” you think.  Probably not – a lot of the content on Nextflix and Hulu comes from the TV nets who are actually more than just distributors these days.  But it brought to mind Internet Explorer, the web browser with a 90+% market share at one point which is now down substantially thanks to the growth of Firefox and Chrome. Continue reading

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Unplugged

Kate the Desktop Computer

Image by Gino Carteciano via Flickr

I have seen the future and it’s disconnected! From what? From the wall, from the wire, and maybe from you if you’re a content creator who’s not thinking ahead. I used to write this on my desktop PC; today I’m writing it on my laptop; tomorrow, I could be writing it on a tablet or my phone (which I do sometimes now in a pinch). Fortunately for me, the CMS I use (WordPress) has versions optimized for each device. It’s not quite so easy, however, if you’re producing content rather than software, especially video content, and that’s going to be a critical fix on your “to do” list if it’s not already. Continue reading

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