Tail, meet dog: Time Warner Cable is currently sending a mailer to internet-only customers, suggesting that they should upgrade their broadband speeds for a better Netflix experience and offering to throw in a whole year of free TV as a bonus. How about some TV with your Netflix? Time Warner Cable’s latest mailer to Internet-only customers. Why is this remarkable? Because not too long ago, cable companies viewed TV services as their main money maker and broadband as an added service. The Time Warner Cable offer doesn’t just turn this model on its head, it also puts the focus squarely on Netflix as one of the main reasons people would want fast internet access. Of course, Netflix has been blamed by some in the industry as a reason why people would cut the cord and go internet-only in the first place. For these cord cutters, an ad like this may actually be a smart thing: Instead of making them feel like they’re subscribing to an expensive TV bundle, Time Warner Cable is putting the emphasis squarely on Netflix, a service Internet-only users likely already enjoy...
Coinstar subsidiary Redbox today announced a new partnership with Verizon for the launch of a streaming video service. The joint venture will launch in second half of 2012 and be a subscription-based and "affordable service that will allow all consumers across the U.S. to enjoy the new and popular entertainment they want, whenever they choose, using the media and devices they prefer," the companies said in a statement. With the new service, Coinstar better positions its primary business for the digital age. Redbox's kiosks, generally located at grocery or retail stores such as Walmart, offer customers dollar-a-day DVD or video game rentals. With the addition of a streaming service and its new-fledged partnership with Verizon, Redbox now further complicates a crowded field of digital streaming juggernauts that include Netflix, Amazon, and Hulu.
... Details of the partnership are still sparse. The companies only indicated they plan to introduce a "product portfolio" and will offer "subscription services." It's unclear what these services are; how or whether they will be bundled with Redbox's kiosk business or Verizon's VOD services; what content these services might provide; or how much it'll cost.
Rumors that Verizon (NYSE: VZ) is considerring buying Netflix (Nasdaq: NFLX) are heating up with the Bloomberg reporting that at least one investment banker thinks the streaming video company could be sold by Easter. "I am hearing rumblings from inside Verizon that they are very serious about either Netflix or something similar," said Porter Bibb, managing partner at Mediatech Capital. Bill said Netflix could go for as much as $4.6 billion; the once-high-flying company has a market cap of $4.17 billion. Verizon has acknowledged it wants to develop a streaming business, with Verizon CEO Lowell McAdam at a conference last week, saying it continues "to look at alternatives. "Verizon was one of the companies that looked at Hulu when it was on the market earlier this year. "The jury's out, but I do believe there's a place for over-the-top," said McAdam. "That model has yet to be determined and I hope we'll be a player in that."
Streaming video online is on the rise in the U.S., and how consumers tune in differs greatly across services. According to a recent Nielsen survey, the majority of Netflix users report watching on a TV screen. In fact, half of all Netflix users connect via a game console (Wii, PS3 or Xbox Live). Conversely for Hulu, watching directly on a computer is the dominant way consumers connect. Eighty-nine percent of Hulu users watch directly on a computer, while 42 percent of Netflix users report watching on their computers.
CHICAGO - [itvt] at NCTA – While major cable operators insist that Netflix isn't hurting the pay TV business, the top over-the-top video provider continued to dominate panel discussions during the second day of industry's annual convention. Time Warner Cable COO Robert Marcus ripped Netflix, which distributes thousands of movies and TV shows for as low as $7.99 monthly, arguing that it doesn't have the premium content offered by cable. "Cheapness and breadth of content really don't go hand in hand," Marcus said. While taking shots at Netflix's programming library, Marcus said the top Web video site also drives demand for his company's broadband Internet business. "Netflix is foremost an example of an app that requires a robust, fat, HD pipe. It just so happens, that's what we offer," Marcus said. Insight Communications CEO Michael Willner downplayed the threat posed by Netflix and other OTT video providers, noting that Web video is a good use for the cable modem business. "The fact of the matter is we have a big, thick broadband pipe that goes into over 90 percent of American homes – certainly 90 percent of wherever it is available to them. Lots of people can do things with that pipe," Willner said.
...The obvious trend is that cable content that had always been locked into a broadcast realm can now be freed up and merged into streaming on-demand for mobile TV. While Netflix had been the obvious source, networks have figured out how to do it for themselves now, potentially bypassing third-party networks such as Netflix (yes I am calling it a network now, you heard it here first) and creating mobile TV solutions completely built around their brand. Now 500 different apps for 500 different channels may not be the best, and there is potential for services that get huge like Netflix to actually begin offering a Netflix + HBO package for a mobile device in the not too distant future. Either way it's an exciting time, and never has more cable content been available wherever we have our devices. It will be interesting to see how this all plays out. The content wave is coming and the stream is just starting to pick up steam.
For years, Time Warner Chairman and CEO Jeff Bewkes has criticized Netflix and those that do business with the video subscription firm, but his stance might be softening. In an interview with Charlie Rose at the Tribeca Film Festival Wednesday, Bewkes not only “expressed fondness” for their growing subscription TV business, he said that he “loved” what Netflix was doing. According to Ad Age, Bewkes expressed admiration for the work that Netflix CEO Reed Hastings has done in navigating difficult waters and building a business based on licensing studio and TV content. “They’ve done a very successful thing,” Bewkes said. “I love those guys.”
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
The Leichtman Research Group says that although 30% of U.S. homes now have an Internet-connected TV -- via a video game system, a Blu-ray player, and/or the TV set itself -- only 10% of those viewers are actually watching video weekly. This video activity is double what it was a year ago. But among those Net-connected TV homes that have Netflix, video weekly activity climbs to 30%. Taking Netflix out of the mix, only 3% of Net-connected TV homes watch some video weekly.
Netflix doesn’t just want to compete with traditional pay TV networks like HBO, Showtime and Starz – it wants to change television forever. The company envisions a future for TV in which old-fashioned things like ratings, schedule and recaps simply don’t matter anymore.
...While Netflix, Hulu and YouTube have already introduced their own original programming, the Amazon Studios project preceded all of those other initiatives. However, while Netflix, YouTube and others are sourcing their programming from professional production companies, Amazon took a different approach with its studio plans — it’s crowd-sourcing scripts and projects from a community of artists and optioning them for free.
“As we’ve often said, we see the biggest long term threat as TV Everywhere, and in particular, HBO GO, the leading implementation of TV Everywhere to date. HBO has some great content, particularly their original series, but today for most people it is locked behind a linear interface, or at best, behind a DVR interface and in all cases tethered to a linear subscription plan. As HBO GO grows and becomes the primary way that consumers experience HBO, it will become a much more effective competitor for viewing time. Similarly, Showtime’s TV Everywhere application is very impressive and just starting to gain traction. Every major network is investing in their Internet application, on tablets, smart TVs, phones, game consoles, and laptops. Pricing is simple: the consumer just authenticates with their MVPD provider. Over the next few years, UIs will evolve in astounding ways, such as allowing viewers to watch eight simultaneous games on ESPN, color coding where the best action is in a given moment or allowing Olympics fans the ability to control their own slow-motion replays. A decade from now, choosing a linear feed from a broadcast grid of 200 channels will seem like using a rotary dial telephone,” Netflix’s managers wrote....
Time Warner Cable Chief Executive Glenn Britt: There clearly is a growing underclass of people who clearly can't afford it," he said. "It would serve us well to worry about that group."... ...The other key issue facing the industry is for programmers and distributors to work closer together to make shows available on a variety of platforms, such as tablets computers or game consoles. The cable industry been working on an initiative called TV Everywhere to make shows available online outside the home for no extra charge once the user has been verified as a paying subscriber -- a process known as authentication. But TV Everywhere impact has not been as immediate as hoped by industry insiders. "We've talked about authentication for two years and we're still talking," said News Corp Deputy Chairman Chase Carey.
The ascent of Netflix signals a broader shift in the way we consume television. For example, "news" programmes aren't really news in that they aren't fresh, they're already reheated when we watch them at 6pm or 11pm. Many TV programmes, from John Stewarts's Daily Show to PBS's Nightly News, can be watched on a PC when we – not they – are available. Tomorrow, we'll get all of them (minus NBC, perhaps) on Netflix or one of its competitors. But what about "really live" events: NBA finals, Wimbledon, the Superbowl, Indy 500 (or Formula 1 races for us degenerate Europeans)? Today, we have choices, we can use the DVR to time-shift and get rid of annoying ads, or we get the show in real time, with ads. This is changing rapidly: NBA (basketball) and MLB (baseball) games are available live on Apple TV through the internet, not cable TV. For the time being, Netflix doesn't offer such events, just movies and TV series. This is Internet TV, but is it IPTV? What we have today is a digitised video stream chopped up and stuffed into dumb IP packets. Here, dumb means little or no metadata, little or no upstream information or interactivity. IPTV means TV endowed with roughly the intelligence of a PC browser. More specifically, IPTV provides targeted ads, multiple windows, interactive commerce, games, Facebook and Twitter engagement, instant messaging to friends: "Quick, get on Channel 36!" This will lead to unforeseen but retroactively obvious usage modes, giving us a truly new medium, not just a shovelware version of an old one.
Over-The-Top Video Netflix is often credited (or blamed, depending on your perspective) for inspiring cable cord-cutting by cable and satellite subscribers... With nearly 23 million users in the U.S., Netflix has nearly as many subscribers as Comcast, the nation’s No. 1 cable MSO. By the end of 2011, it is likely to have more total subscribers than HBO, currently the largest subscription video service. More to the point, with its embedded app available on more than 300 different SKUs of connected devices, Netflix’s potential reach already extends to far-more devices than that of any MVPD in the U.S., and it has the luxury of growing internationally — adding to its scale — while U.S. MSOs largely do not. Right now, Netflix’s service — on-demand, a la carte — is highly personalized, whereas MVPD service — fixed tiers, bundled programming packages — is fairly standardized. As sufficient scale, however, even personalized content services will begin to have an aggregate impact that rivals that of pre-bundled, standardized services. [Netflix] is just hoping to get there before anyone really notices.
"Our biggest competitor over time may be another service with a similar model to Netflix, such as Hulu Plus, or it may be free on-demand Internet video as a part of a consumer’s MVPD package, namely TV Everywhere. This free bundling of a subset of our functionality within a larger subscription service is a classic way for an incumbent to leverage its strength. While TV Everywhere is not a strong offering today, it is likely to become much better over the coming years. We’ll continue to push ahead, developing an ever-better user experience to differentiate Netflix, and exploring exclusive rights, where it makes sense, such as our “Mad Men” deal, so that we remain complementary to MVPD."
Dish Network will give customers access to HBO and Cinemax programming through its Internet service DishOnline. The satellite company positioned its new suite of offerings as a way to differentiate itself from Netflix, which has seen cable partners such as Starz and Showtime tighten the number of shows it can stream. Netflix does not currently have a deal to stream HBO shows.
Late last night, Netflix took to their blog to announce that users in Canada now have the ability to reduce the quality of Netflix's video streams in an effort to combat the bandwidth caps from Canadian ISPs. Netflix streaming in Canada will now default to a 625Kbps video stream for what Netflix calls the "good" setting. Selecting "better," users will...
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