Tag Archives: Netflix

Netflix Doesn’t “Cannibalize” Regular TV

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Source: Huffington Post

The rising popularity of cord-cutting has got pay TV providers worried about their customer base and scrambling to give their viewers a reason to stay.  Netflix seems to be growing into traditional TV’s main competitor for video content.

However, a new study by TiVo Research and Analytics (TRA) shows that most viewers use the subscription VOD service as a supplement to, and not a substitute for, regular TV.

Collecting data from nearly 10,000 respondents, the study showed that there was “no significant difference” in amount of regular TV watched between those who subscribe to Netflix and those who do not.  And with over half (57%) of the respondents saying that they subscribed to the VOD platform, Netflix may not yet pose as big of a cord-cutting threat as cable/satellite companies think.

Mark Lieberman, CEO of TRA, says that the study’s results are clear and positive, but do not necessarily bode well for the future of traditional TV:

“Our data show that Netflix is not currently a substitute for traditional television, but offers a way for TV lovers to watch more of the kinds of programs they love. The future of television may tell a different story, but as of today we’ve found that the Netflix subscribers in our study are not watching less traditional TV.”

The future may indeed tell a different story, as another study showed that 20% of Netflix users in the US have already cut the cord.  However, as much of a concern cord-cutting OTT users are for pay TV companies, it’s not time for them to go into crisis mode just yet.  Traditional TV providers still have broadcasting rights to major, one-time events – most notably sports.  As long as they can keep hold of those rights, they always have a chance.

Referenced from RapidTVNews and WebProNews

More Original Content from Netflix

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Following 14 total Emmy Award nominations for its original series House of Cards, Arrested Development, and Hemlock Grove, Netflix says it plans to expand its original content repertoire.  Not only has it ordered new seasons for all of its shows, but the company said in a letter to its shareholders that it also intends to venture into stand-up comedy and full-length documentaries.

Netflix’s long-term goal is to overtake rival HBO as the go-to provider for video content.  To do that, says Joan E. Solsman, the company will have to overcome deficiencies between it and HBO:

“Unlike HBO, Netflix doesn’t own own the content it’s helping to produce, though that would be a natural path for Netflix to take in the long term. And Netflix international reach is trifling compared to HBO’s. Earlier this year, Time Warner Chief Executive Jeff Bewkes said HBO has 114 million global subscribers. Netflix’s worldwide subscribers were more than 37 million, it said Monday.”

Although Netflix recently edged out HBO in US subscribers, the fact that HBO owns all of its content allows it to have an overwhelmingly superior global presence.  Having “original” content is all well and good, but Netflix will continue to be globally overshadowed by HBO until owns outright all the content it produces (the global success of Game of Thrones is proof of this).  

In the meantime, however, we can all be resigned to the fact that we will, for the foreseeable future, have to use services like MyRepublic’s Teleport if we want to watch shows like House of Cards (which is fantastic, by the way).  

Referenced from TechCrunch and CNet

Hulu Deal Falls Through

DirecTV-HuluRemember when we wrote that DirecTV was supposed to put pen to paper on a deal to acquire Hulu by the end of last month?  Big news: the deal, which would have given DirecTV the online presence it desperately needs, has been called off by Hulu owners 21st Century Fox, NBC Universal and Disney in a joint press release last Friday.  This is the second time Hulu’s co-owners have canceled acquisition proceedings for the company in two years, as they did the same thing in 2011 (although the group of owners then had different members).

In these most recent dealings, DirecTV is said to have offered just over US$1B (S$1.26B) for the OTT platform, which Hulu’s owners were supposedly prepared to accept.  However, they have obviously had second thoughts, and are now planning on infusing US$750 million (S$950 million) of their own funds in an effort to realize Hulu’s potential.  

Jim O’Neill thinks that said potential, and not necessarily an inadequate offer from DirecTV, was the driving force behind the decision to axe the deal:

“The easy answer, but not necessarily the correct answer, is that the price being offered just wasn’t enough…The right answer may be more that the triumvirate finally realized they had a plum in their hand.

[Hulu]‘s got cheap, fresh content coming in from its three owners, 4 million paid subscribers, and a lot of potential. It just hasn’t been realized by anyone other than its original CEO, Jason Kilar, who tried and tried again to tell his bosses what a great company he’d made for them.”

Hulu sits in a distant third place behind American OTT providers Netflix and Amazon, and this fresh supply of cash from its owners is certainly a step in the right direction.  However, Netflix dishes out more than US$2B (S$2.5B) per year to both buy and create new content, and Amazon reportedly spends about half that.  Furthermore, Hulu’s owners have made it clear that their new funding for the company will not be a yearly expenditure, so it seems that the company’s management will continue to be a step behind its competitors.

Referenced from theConvergence.tv and allthingsd.com

MyRepublic Launches Beta OTT Product

MyRepublic-TeleportSingapore internet provider MyRepublic, whose fibre broadband network is turning lots of heads, released their Teleport service for beta testing in April.  Teleport’s main purpose is to allow users to circumvent geographically restricted content, such as that from Netflix or Hulu, by “teleporting” their internet connections so that they seem to be coming from somewhere else (like the US).  Although other services such as StrongVPN do the same thing, Teleport uses MyRepublic’s fibre broadband, which the company assures provides a faster connection than other networks such as SingTel or StarHub.

Vanessa Tan writes that MyRepublic is making Teleport as user friendly as possible:

“The company also hopes to make setup of…Teleport easy for customers. It is not required of users to have additional home networking configurations or technical knowledge, as the activation of the add-on services will be configured on MyRepublic’s end.”

MyRepublic offered its beta product trial free to the first 1,000 customers to register.  After the trial period is over, however, the service will cost what most will view as a worthwhile SG$5.  For users to access paid video services, though, the services’ subscription fees will be a separate and additional expenditure.

Full article at TechinAsia

TV Content Wants to be Free

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As Netflix, NBC Universal and a variety of new distributors and content networks enter the field of developing their own channel programming, they are tending to gravitate towards maintaining a tight grip over their productions.

We believe this will ultimately turn out to be a counter-productive strategy, because it creates walled fortresses, silos of content, in a time where the public demands even more flexibility and selective control over what they want to view, and when they want to view it.

Matt Asay of ReadWriteWeb explains the downside of this trend aptly, stating the following:

“Once-neutral content networks are now investing in original content, exclusive to their networks. While these are honest attempts to differentiate and create value for customers, they risk Balkanizing content. It’s CompuServe all over again.”

Further to the point, Matt illustrates that there will be eventual repercussions of this strategy, based on consumers eventual reaction:

“Whether expressed through digital piracy and even Apple’s iTunes, content wants to be free. By this I don’t mean to suggest that consumers want to pay nothing for content, but rather that we want to have convenient, multi-channel access to content…Markets get bigger through open access; they constrict when access is closed.”

Sooner or later, consumers are going to get what they want, that is how the open market works. And if Netflix and other such previously neutral content distribution networks continue to erect barriers around their original content programs, then public dissatisfaction will grow, and new disruptive innovators will enter the scene.

Referenced from ReadWrite.com

TV Everywhere vs. Video On-Demand

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We are a point now where on-demand video entertainment and TV everywhere are real players in the digital media market.  Companies such as Netflix and Hulu Plus exemplify why subscription VOD’s allure with their whenever-and-wherever viewing options, provided there is an internet connection.

Gaining momentum in the video market is the new TV everywhere phenomenon, where pay TV subscribers can catch up on shows missed at their normal viewing slots.  Many television providers already offer this feature, with most requiring the purchase of an additional set-top device to enable streaming to users’ mobile devices.

However, some US providers are now offering direct live streaming and, more importantly, downloading capabilities to mobile devices, much to the chagrin of VOD providers like Netflix chief content officer Ted Sarandos:

“Catch-up television is good for the industry. It’s good for the TV industry. It’s good for us because it strengthens the brands of content. But it should be only catch-up television.

Once it gets into full-season stacking of a show, that’s a SVOD right…And that’s a separately monetizable right that we pay a lot of money for.”

As video content delivery services continue to develop and improve, especially those from traditional TV providers, legal battles may ensue over the rights to downloadable content.  It will be interesting what precedents, if any, will be set as the saga continues.

Netflix Announces New User Profiles

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Popular OTT video streaming service Netflix recently announced its plans to create multiple user profiles on the same account, which will go into effect in August.  This will allow each user on an account to create a different profile which contains videos that are personalized only to his or her own viewing habits.  This allows personalized Netflix features such as the “Instant Queue” and “Just for You” video sectionsto continue to suggest content to a user without being muddled by other users on the same account.  

While simple in nature, the change highlights the importance of content personalization in the online streaming world.  Personalized content and video suggestions keep the user engaged and ultimately attain more viewing time for the provider.  In the case of Netflix, this means profits in the form of customers continuing to pay for the service provided to them.  In the case of free video providers such as YouTube, it means profits in the form of paid advertisements (see “Impact of YouTube’s TrueView for Mobile”).

Creating personalized content, however, remains a developing technology which not only involves observing users’ viewing tendencies, but also uses complex metadata and algorithms to determine the best options for a given user.

Jim O’Neill thinks that “content discovery” is the key for OTT providers to attain and retain users:

“Content recommendation remains a big hurdle for online video aggregators …it’s becoming increasingly important for service providers especially to offer subscribers an easier way to find content… or risk losing them.”