A couple years ago, Netflix began supplementing its DVD mail rental business with movie streams over the Web. for a few thousand select titles. Today, millions of Netflix customers stream their movies instead of waiting for them to come in the mail (or, more often, do both). ComScore Video Metrix estimates Netflix’s online viewership a bit lower at 645,000 unique viewers in March. They watched 6.9 million video streams and the average time spent watching per viewer is an amazing 128 minutes for the month, which is right up there with YouTube in terms of time spent (having full-length feature films helps keep people around longer).
You pay Netflix a subscription, and you can watch your monthly allotment of movies any way you want. Netflix doesn’t care where you watch your movies, whether it is on your TV, xBox 360, Windows Media Center, or other devices.
Streams still make up a small portion of the overall movies watched by Netflix customers, but it is growing as the company expands its streaming catalog, broadband improves, and computers become more like TVs (and vice versa). I ran into Netflix CEO Reed Hastings at the AllThingsD conference this week, and asked him in the video above how his streaming service is going and how its economics compare to that of mailing out DVDs. As you can imagine, it costs much less to stream a movie over the Internet than it does to mail it as a DVD. But Netflix ends up paying twice anyway because it already owns the movies on DVD. It has to pay the studios an additional streaming fee. The studios like that. “If the studios have their way, we’ll pay them two or three times,” quips Hastings. But he is resigned to paying wtice for movies he’s already bought. The way he looks at it, Netflix is paying the studios instead of the Post Office.
Ok, THAT was a funny comment. It is sad that Netflix gets screwed this way. Netflix should not have to pay double for streaming. Studios/MPAA/RIAA have done more to hurt the media market than anyone else out there.
i kinda like him. netflix seems to be doing many things right.
love netflox
Great business model if the studios don’t get greedy
Where’s the rest of the video? Seems like he was on for chatting as they say!
Key phrase “as broadband grows”.
To that end, it’s important to make sure that Netflix is playing well with others and is invited to be closer. The CDN model has to be a tree of many branches and many leaves.
I’m still seeing greater value in Redbox as a consumer but would really like to come back to Netflix if they increase their vault of titles. My concern would be how Netflix executes in licensing not how they execute in technology.
You are a bonehead. your analysis was moronic.
I haven’t gotten too tough into Netflix as of yet.
http://www.YouT...rewryOnlineLive
I really see what Netflix is doing as THE model for all media companies. Broad content base, cheap subscription model, unlimited plays, increasingly broad device adoption. Now, if they could only deliver HD quality video. Unfortunately, I think the cable companies won’t allow that to happen.
One one hand, streaming is cheaper than mail. But customers can see more movies if they stream, can’t they? (no waiting for the Post Office)
Wonder how margins compare to their DVD business…
It is obvious in the future their main business method should be streaming video. They should have a subscription plan like 10 usd(or more depending on the circumstances) per month and users should be able to watch all the movie titles Neflix has. In France, each big theater chains have similar plans(except that it is physical theater) that allows movie goers watch any movie they want as many as they want with monthly subscription fee-can’t remember exactly but it was bearable-. Netflix should go same way.
MS should just up and buy ‘em.
god I wish apple would do this (monthly fee, unlimited streaming) with HD content on the Apple TV……
Unlimited streaming from Apple. Not sure if that will ever happen.
Reed Hastings sucks.
See why.
I think you and Reed misstate the facts about streaming. There is no “double-payment” with streaming, there is simply a per stream payment. If Netflix chose to get rid of their DVDs then they would only be paying once per stream; just as they are now. Saying they are “double paying” is not truthful, at least no more than saying that they 100,000 pay when they buy 100,000 copies of a new DVD.
“If Netflix chose to get rid of their DVDs then they would only be paying once per stream”
Netflix can’t choose to do this on their own. Studios won’t let that happen easily.. so Netflix still might be “double paying”
Besides, if Netflix goes streaming only (all movies are available online), the business model would have to change. If I can watch unlimited streaming, why would I ever get a higher end plan?
Agree with @Chris. Two models here: 1) physical rental, 2) streaming service. Reed (NFLX) pays once for each. Want to pay once total, lose a model. Reasonable IMO.
say goodbye to your local blockbuster video store!
Can’t happen fast enough. If you guys hate Hastings (for whatever reason) you guys must want to kill Keyes!
Netflix is a great company up there with Google and Apple.
“New Media” is one of the mean sticking points in the battle between SAG and AMPTP. Sounds like the studios are doing ok with the Netflix streaming (piracy will likely be a problem in the future).
John Malone was interviewed by Mossberg this week at the All Things D conf and was saying how hard it is to monetize content on the Internet where everything is expected to be free. It’s an interesting interview.
I own several good names that would be ideal for a competing website that streams movies.
I own ppvmovies.com , movieondemand.com , and emovieclub.com
If anyone knows how I can contact the studios directly to see if it is better to put it together froms cratch or use a white label site. Anyone with any ideas, please email me.
Thanks
Stop while you’re ahead.
More negative (but true) publicity on Reed Hastings.
http://deafness...sensitive-b.htm
so what?
If you don’t like their product, you’re welcome to use a different streaming service. Netflix doesn’t owe anyone that option. It’s not like they’re some evil, monopolistic corporation hellbent on depriving deaf people the pleasure of watching movies. It’s probably just not worth the cost of doing it. Deal.
You’re selfish.
Watch any TV show or movie with its audio turned off to see what it’s like.
Hardly makes him an insensitive bastard. I mean, deaf people can order the DVD. Just like everyone else had to do just a little while ago. Is he a bastard just because he doesn’t think it’s the biggest inconvenience in the world to wait one day longer for the DVD to show up by mail? I don’t think so.
Lenny,
He IS an insensitive bastard for implying that deaf people should be satisfied with just captioned DVDs through the mail. Excuse me, but Hastings himself knows that movie streaming is the way of the future! Yet they are already leaving deaf and hard of hearing people out!!! The technology ALREADY exists to have captions on streamed video – just look at Hulu.com, which has some captioned video. I’m sick and damn tired of how technology companies are ALWAYS leaving deaf and hard of hearing people out and then adding accessibility as an afterthought. All this in the pursuit of the almighty buck!
Reed Hastings, your name is MUD for your insensitivity to the needs of deaf and hard of hearing people. You are so ignorant that you did not even know that Hulu.com has captions already. When does Netflix plan to add captions to their streaming video – in 2015?? It is unfair to make deaf and hard of hearing people wait so long when the technology already exists.
I must agree with Jamie Berke’s comment. He was pretty much insensitive, ignorant, and dismissive. The tech *IS* there to add in subtitles and/or closed/open captioning to video of any kind. You can even do it yourself.
Even Adobe’s Encore has the ability to add in subs. YouTube, CNET, and Hulu are perfect examples right there. Here’s one blogger that relates to captioning, Bill Creswell;
http://billcres....wordpress.com/
Suffice it to say that Google has quite a few hits on these utilities as well, using keywords (dvd captions) and/or (dvd subtitles), minus the ().
So, no, Netflix doesn’t have an excuse for leaving those with hearing losses out of the loop. If the movies already have the subs/CC, why spend the time removing them when they’re already there?
I think Netflix is a great buiness model! I think the service is much better than Blockbuster.
We’ve been using RedBox more often since $1 and a simple koisk at the grocery store (saw Milk last night- recommend). Netflix would be our second choice.
Anyone concerned that streaming will result in an increase in piracy?
I tried redbox, but the DVDs are always scratched.
If anything, there will be a decrease. More people are capable of ripping a DVD than pirating a stream.
Problem with Netflix is the fact that they are locked into the flux, this is to volatile a position to be in from a investors point of view.
The moment the studios change course Netflix is hamstrung, I cant see a lagacy here.
I would subscribe if they can stream the newer movies the same day they are released in theaters.
Pretty sure that won’t happen. Pirates would be all over it then.
Surprise Surprise, we have the technology to deliver in-home theater releases and allow Netflix to use Bittorrent to distribute streaming titles. Mr. Hastings, we will be in touch.
We will be launching the MuuVii Streaming Format at the Ebay conference in 2 weeks.
Regards,
-Will
If I rented movies, netflix would be my company. Jeff Bridges at the helm of Netflix….what’s not to like…wait a sec…is that Jeff Bridges…lol
Erick,
The word is Spell Checker
“But he is resigned to paying _wtice_ for movies he’s already bought.”
Cheers
Suchit
PS: Sorry for being too pedantic
I am to the point that I only stream from netflix, but I don’t use it too often because of the lack of captions. I’m not totally deaf, but it does make the movie more enjoyable to have them. I currently have the lowest level account because of the lack of captions. So this choice is costing Netflix money. I’m sure I’m not the only customer (or potential customer) holding back because of this.
Thanks twelfthdragon for the info on that.
Netflix is behind the 8 ball in the movie streaming business. I love Amazon Video on Demand – you pay per movie, no membership required, you get a free preview, and it works great!
http://www.amaz...p;node=16261631
It’s easy to watch on your TV: PCTVCables.com
Nothing to do with 8 balls (I’d argue Netflix is way ahead of the curve FWIW). It’s a math/preference thing: subscription for $10 monthly or ala carte for $2-3 per flick. I watch more than 4 movies a month, so I prefer Netflix.
I’m still seeing greater value in Redbox as a consumer but would really like to come back to Netflix if they increase their vault of titles.
say goodbye to your local blockbuster video store!