In the long run, LG’s partnership with Netflix to bundle the online movie rental system into its new flat-screen TVs might prove to be the biggest news from CES last week. The announcement didn’t get the press other gadgets received from the show. After all, the idea for the technology has been around since you still had rabbit ears on top of your idiot box. But the South Korean underdog turned household name - together with the leader of online rentals - may be the first to make the inevitable marriage of TV and the Web work.
Davis Brand Capital friend and collaborator Kevin Slavin spoke at TED Global this month about how algorithms are increasingly shaping our world. Think that doesn't concern you, your business or your life? Think again.
If your company is already well established and has smart management, it is likely that it will become a hybrid in the next ten years, blending its legacy business with a new business model that is rising to threaten it.
200 million connected TV devices will cumulatively ship in the next 18 months, and combined with Xbox (23 million+ Live customers), PS3, Wii, and devices like Apple TV and Roku, about 300 million Connected TVs will be in living rooms in the next 18 months. That’s as many TVs connected to the Internet as Android devices in the market today.
Most every company says it values its customers, and hates to 'walk away' from them. Leaders are called on to make tough decisions they believe are in the best interests of their companies. And sometimes, these decisions advantage some customers at the expense of others. That doesn't make them bad decisions, just risky ones. But leaders of some of our greatest brands act like they have forgotten (or never knew) what every junior brand manager surely knows --- to test potentially risky messages and find ways to mitigate their negative impact. Instead, senior leaders are acting like bulls in a china shop, awkwardly and prematurely broadcasting their strategic decisions in ways that destroy their company's (and their own) reputation and value.
Customers, employees, shareholders and taxpayers hate large corporations for many reasons. 24/7 Wall St. reviewed a lengthy list of corporations for which there is substantial research data to choose the 10 most hated in America.
You already use Netflix for unlimited DVD rentals, Spotify for unlimited music and your gym membership for unlimited elliptical-machine use, so why are you still paying on a film-by-film basis to go to the movie theater? Or so asks MoviePass, a new flat-fee subscription service that allows members all-you-can-watch access to local cinemas.
The business climate, it turns out, is a lot like the weather. And we've entered a next-two-hours era. The pace of change in our economy and our culture is accelerating--fueled by global adoption of social, mobile, and other new technologies--and our visibility about the future is declining. From the rise of Facebook to the fall of Blockbuster, from the downgrading of U.S. government debt to the resurgence of Brazil, predicting what will happen next has gotten exponentially harder. Uncertainty has taken hold in boardrooms and cubicles, as executives and workers (employed and unemployed) struggle with core questions: Which competitive advantages have staying power? What skills matter most? How can you weigh risk and opportunity when the fundamentals of your business may change overnight?
It takes years to build a good reputation, but seconds to damage it beyond repair, as executives at companies from Dell to Domino’s certainly have found out. This was a sentiment echoed by executives at the Senior Corporate Communication Management Conference in New York when discussing social media and corporate reputation and how to embrace the new reality of immediate communications.
Apple television rumors have swirled for years. But only now do we know that when speaking to his official biographer, Steve Jobs was keen to reinvent the television. And after ages trying to polish it into a user-friendly interface to video content he finally felt he'd "cracked it." Excitement has grown quickly since this revelation, but one analyst--Gene Munster--has checked with his sources and says that test HDTV prototypes are already in the pipeline, suggesting the device could be en route sooner than we thought.
Last month, CEO Reed Hastings announced that the company's DVD and streaming businesses would be split: The DVD-by-mail service would be rebranded as Qwikster, while the streaming service would remain under Netflix. Consumer reaction was overwhelmingly negative, just as it had been for the company's recent price hikes. Many found the announcement confusing (customers would now have to deal with separate websites, usernames and passwords, movie queues, credit card bills, and ratings systems), and senior Netflix execs came out to reaffirm the decision, calling it a "natural progression" and part of a "long-term marketing opportunity."
Anyone who's spent an hour waiting to download a movie from Apple Inc.'s iTunes Store, or hunting for a recent release on Netflix Inc.'s streaming service, knows that online movies aren't exactly ready for prime time.
Ahh, July. We miss you so. The world was newer then, the air fresher, the people a little nicer, and there used to be something called Qwikster.
Every now and then, the business world presents us with a lab experiment that we can observe in realtime. Netflix's announcement that it is splitting off its DVD-by-mail business from its streaming business is just such an experiment.
Movie delivery service Netflix has just announced that it is rebranding its DVD-by-mail service as Qwikster and that it will keep calling its streaming service Netflix. Shocking news yes, but already the Internet has found one immediate chink in the company’s rebranded armor, other than the fact that, like a multitude of other failed companies, the name ends in “ster” …
For years now, Netflix has been among the Web's most loved companies, scoring tops (or, this past year, second) in customer satisfaction for online retail. Netflix deserves this respect because it delivers a complex service that, 99 times out of 100, just works. DVDs arrive remarkably quickly. Streaming is synchronized across your many devices. And, prices match or beat competitive options. So it was surprising that such a firestorm sprang up when Netflix announced its pricing changes for DVD+streaming.
Sandvine‘s new report puts Netflix top of the sources for peak downstream Internet traffic in North America, with a share of 29.7%. Netflix came above HTTP websites (18.36%), YouTube (11.04%) and BitTorrent (10.37%) for downstream traffic during peak times, with BitTorrent accounting for over half of the upstream traffic.
Netflix Inc. is in advanced talks to distribute a forthcoming television series directed by David Fincher and starring Kevin Spacey, said people familiar with the talks. If such a deal were to come to fruition it would add a new competitor to the television industry by increasing the degree to which Netflix vies with premium-cable television channels like Time Warner Inc.'s HBO.
You could argue Warner Bros.' test to rent, and soon sell, "The Dark Knight" and other films on Facebook is just another promotional deal on the world's largest social network. But it isn't, and that's why it sent shivers through the media industry: not for what the deal is today but for what it could easily mean.
Groupon has been written about a lot in the media. Most of the coverage has been extremely positive, like a Forbes cover which called Groupon “The Fastest Growing Company Ever.” Other articles question whether Groupon is a defensible business built for the long-haul. Late last year we boarded a Chicago-bound plane, along with a couple of our colleagues, for an initial meeting with the company to form our own opinion.
In May, Google announced its interactive TV platform that brings a search box, internet browser and apps to TV viewing, though it has kept quiet on what we can expect from the device. Now, weeks before it ships, Google has launched a website to outline the new features and its media partnerships. Here's what you need to know about Google TV.
Even though Netflix’s arch rival Blockbuster has filed for bankruptcy protection, the victory lap will have to wait. The company that filled American mailboxes with red envelopes containing DVDs is already fighting the next war. Netflix’s competition with Blockbuster is an artifact of another age — the DVD era. The main battlefront has shifted online, where consumers are streaming movies and television. Netflix faces a number of well-financed and innovative companies like Apple, Amazon and Google, as well as the cable TV providers. This time the war will not be won by the company that perfects the logistics of moving DVDs, but by whoever can best negotiate with Hollywood studios.
Not so long ago, in 2005, Blockbuster seemed invincible. However you preferred to rent movies — in stores or online — the company was ready to accommodate you. At the time, Netflix could offer only one way of obtaining a movie (the mail) and one way of returning it (the mail). It was clicks, with no bricks. Of course, we now know that Netflix has done just fine. In January 2005, its shares traded in the $11 range. On Friday, they closed at $140.46, giving the company a market capitalization of $7.35 billion. As for Blockbuster, which was spun off from Viacom in 2004, it’s now a penny stock, and its woes are as visible as the “Closing” banner in the window of a store in your neighborhood.
In the age of connected TV, “don’t touch that dial!” has become “don’t change that input!”. Whereas broadcasters were once concerned over viewers changing channels during ad breaks, they are now worried that the public will desert regular television altogether for internet-based content. About a quarter of TVs sold in the US this year will be able to connect to the internet and bypass regular programming, according to research by Parks Associates, while WiFi and Ethernet connections are becoming standard on set-top boxes.
The big question for anyone in television is how to get in front of - rather than be trampled by - the onslaught of seminal change coming from a multitude of places. This year's fall television season unfolds against an increasingly connected world and consumer indifference to how and where they access network fare. Many will access the programs they want to see streaming online from network Web sites and third parties, such as Apple's iTunes.
For Blockbuster, the advent of DVDs in the mail was a disruptive technology. The chain relied initially on bulky videotapes and late fees to generate a fat revenue stream, and its scale was huge; smaller, independent stores gradually left the market. Netflix opened a new battlefront, mailing thin DVDs and letting customers keep a disc as long as they wanted. Blockbuster saw the change coming. It even took action, setting up its own mail service. But seeds of destruction had been sown, and Blockbuster is now financially troubled. Netflix, meanwhile, is already embracing technology shifts that will make those red envelopes a quaint memory. Creative destruction has such a cataclysmic sound. But the term, coined by the Austrian economist Joseph Schumpeter to show how capitalism destroys companies as more innovative ones succeed, describes a process that is more like a slow-motion train wreck.
HBO, Showtime and Starz, consider this a warning. Netflix and Relativity have just announced a deal that will see all first-run theatrical releases from the production company available via streaming to Netflix subscribers, just months after their release on DVD. It's a bit of a coup for the mail order 'n' mobile-streaming service, as it will give its 13 million subscribers access to new(ish) films before they're viewed on pay TV.
Audi is inviting the public to submit ideas for electric car designs through July 31, following Fiat's recent user-generated contest inviting consumers to participate in developing a new car. It's the latest high-profile crowdsourcing exercise, which used to be restricted to startups and smaller companies. Now, it's much more common among bigger brands. Pepsi's doing it, while Starbucks has generated over 21,000 ideas from coffee-lovers for new drinks. Dell's three-year-old IdeaStorm has received over 10,000 suggestions from consumers, and claims to have implemented almost 400 of those ideas. Last year, Netflix paid $1 million for a new idea for a movie recommendation system.
CEO Steve Jobs also unveiled some new metrics. Among them: Apple expects to control 48% of the mobile display ad market in the second half of 2010; it already has $60 million in commitments for its mobile iAd format; and it has paid out more than $1 billion in revenue to app developers. Here are some takeaways from Mr. Jobs' presentation at Apple's Worldwide Developers Conference today.
You may not be familiar with Chegg if you're out of college, but it has quietly become one of the fastest-growing, second-generation e-commerce companies around today. Think of it as “Netflix for textbooks,” a youth-savvy e-player that's poised to get bigger thanks to more than $140 million in backing. Chegg boasts 4.2 million books, accessible to college students on 6,400 campuses. As TechCrunch comments in its look at the brand's growth, “Chegg is disintermediating the $5B+ college textbook market by providing a low-cost, short-term, nationwide rental alternative to the high-priced university bookstore.” Chegg, short for “chicken and egg,” has built a loyal following and developed a sharp brand positioning in the red-hot market for virtual rentals.
Netflix appears to be ready to take its video rental service to international markets, a recent job posting suggests. The company has an opening for a director of product management to “drive the Netflix team to clearly understand what work must be done, and in what order, to achieve international scale most quickly.” Stateside, Netflix is doing quite well. Its video-streaming service is now in high demand on Nintendo Wiis and iPads and is coming soon to iPhones and iPod touches.
Ah, the cloud — these days, Silicon Valley can’t seem to get its head out of it. The idea, though typically expressed in ways larded with jargon, is actually rather simple. Cloud providers, large ones like Amazon, Microsoft, Google and AT&T, and smaller ones like Rackspace and Terremark, aim to convince other companies to give up building and managing their own data centers and to use their computer capacity instead.
News of note from our Most Innovative Companies, including Twitter, GE, Netflix, and HTC.
Facebook has eclipsed Amazon, Walmart, Netflix, and even Google as the foremost brand name in web searches from U.S. users, according to research from Hitwise. In terms of both traffic and revenue, Facebook has been leaving other social networking sites in the dust for some time. Yet in terms of web search – the terms people use either to find information or navigate to websites – Facebook is just now topping the bill.
Blockbuster Inc. again warned it may have to file for bankruptcy protection as the movie-rental company remains unprofitable. In its annual report filed Tuesday, Blockbuster said its declining sales and cash flow, coupled with increasingly competitive industry conditions, "raise substantial doubt about our ability to continue as a going concern." Blockbuster provided similar warnings nearly a year ago before it was able to refinance its long-term debt in the fall.
Wall Street is once again fretting over Netflix. Some analysts didn't know what to do with themselves on Tuesday when the share price of the Web's top movie rental service shot past their performance expectations. Sure, Netflix continues to return boffo earnings, but after the company's share price hit $70, some brokers took a hard look at Netflix's prospects for the future, according to a MarketWatch story by reporter Therese Poletti. What the analysts found was a Web video-on-demand segment filling up fast with competitors. That apparently spooked analysts at Bank of America/Merrill Lynch, Susquehanna Financial Group, and Kaufman Bros. They all issued downgrades on Netflix, Poletti wrote. Perhaps, investors have reason to worry.
TiVo, the Silicon Valley pioneer of digital video recorders, is once again trying to get consumers to pay for another set-top box that combines traditional television programming with a vast array of content from the Web.
With its traditional video-rental business under assault, Blockbuster Inc. has brought in restructuring advisers, looking to buy yet more time to remake itself in the face of new rivals and technologies. In recent days, Blockbuster tapped law firm Weil, Gotshal & Manges and investment bank Rothschild Inc. to look at ways to reduce its roughly $1 billion debt load and explore other strategies, such as acquisitions or partnerships, said people familiar with the matter.
Analysts estimate that fewer than 5 percent of the HDTVs sold in the United States last year can go online to pull in movies and television shows, bypassing traditional cable and satellite TV service. Now, however, the idea of an Internet-ready home entertainment setup has a powerful new backer: Wal-Mart.
When Apple announced its much-anticipated iPad last month, one of the resounding complaints was "What, no Netflix?" While that's not surprising given Apple's penchant for keeping users locked into its iTunes ecosystem, it does say a lot about Netflix's proliferation on tech devices over the past two years. Now, the content-streaming brand that remade the DVD rental model is poised to be a major disrupter in the entertainment landscape. Netflix is forcing movie studios, which are wary of digital distribution, to make deals. Netflix insists it's not trying to harm the studios, but rather offering them an opportunity, yet it is still handling them carefully. For instance, via its recent renegotiated deal with Warner Bros., Netflix gets access to more Warner content to stream; in return the studio gets a 28-day blackout period on rentals of new DVD releases.
Pay-TV juggernaut HBO has officially announced the launch of HBO Go, a video-streaming service. Unless you are one of the 38 million cable subscribers who gets HBO or sister service Cinemax, HBO Go won't be offered to you, the company has said. HBO Go provides subscribers Web access to the same movies HBO screens on cable TV--at no extra charge. This is the on-demand movie provider's attempt to hang on to subscribers during a down economy, as Netflix and other services attract more and more consumers looking to cut entertainment costs.
Now that the histrionics surrounding the debut of Apple's iPad have fizzled into a rational, and often uninspired, discussion of the device’s actual merits and shortcomings, Apple is left with the iReality of the iPad. Reviews are mixed, but the brand is being proactive about taking the lead regarding the public conversation.
It used to be that a basic $25-a-month phone bill was your main telecommunications expense. But by 2004, the average American spent $770.95 annually on services like cable television, Internet connectivity and video games, according to data from the Census Bureau. By 2008, that number rose to $903, outstripping inflation. By the end of this year, it is expected to have grown to $997.07. Add another $1,000 or more for cellphone service and the average family is spending as much on entertainment over devices as they are on dining out or buying gasoline.
YouTube made its long-awaited entry on Wednesday into the business of online movie rentals. But do not expect to be able to stream to your PC the latest Hollywood blockbuster or even a flick from a studio’s dusty catalog of classics. YouTube, which is owned by Google, is introducing its rental service with just five movies, all from independent filmmakers.
Owners of the Nintendo Wii can finally stop waving their video game controllers in the air and sink back onto the couch. Nintendo is bringing Netflix’s online streaming video service to its Wii gaming console, the most popular in the industry, the companies plan to announce Wednesday. The service lets subscribers choose from a catalog of generally older movies and television shows and watch them instantly.
Hollywood loves a format war. First VHS saw off Betamax in the great home video battle of the 1980s. More recently, Blu-ray won the right to succeed the DVD when it was preferred by film studios to rival HD-DVD technology. However, as Hollywood looks to the digital era, the industry is split on how to manage the distribution of movies to TVs, computers and hand-held devices, setting the stage for its next great technological tussle. In one corner is Walt Disney and its Keychest product, which it describes as "enabling technology" that allows consumers to buy or rent a film and then view it on any device they choose. In the opposing corner is Digital Entertainment Content Ecosystem, a coalition of retailers, hardware makers and film companies, including Hewlett-Packard, Netflix and Sony.
Customers were more satisfied than ever with e-commerce sites while holiday shopping, according to ForeSee Results’ E-Retail Satisfaction Index, which uses methodology developed at the University of Michigan to study consumer satisfaction. Satisfaction rose 7 percent to 79 out of 100, the highest since the survey began in 2001.
Today, millions of DVDs in bright red Netflix envelopes flood US mailboxes, but that may change in the near future. Netflix, the nation's largest DVD rental-by-mail service, is now approaching movie studios directly to gain access to digital versions of films.
Looking for a good flick to watch tonight? Visit Instantwatcher, which marries New York Times critics' picks with the Netflix streaming-movie catalog. Interested in updating your music collection? Visit ArtistExplorer, which combines the Billboard charts with BestBuy.com's inventory database. Neither Netflix nor Best Buy made the applications—but both made them possible by opening up their APIs. You've likely been hearing a lot about APIs lately, and the concept isn't as confusing as it sounds. An open API simply means you've launched an interface that lets third-party software interact with your data; and those third parties can then mash the data up and build useful new tools on top of it.
Rental business Netflix saw its Q3 profit increase 48% due to a larger number of subscribers joining the service. The company's revenue increased 24%, with the company adding 510,000 new subscribers to the service. The company's revenue was $423.1 million, with consumers signing up for the low-cost rental service -- staying home and watching a movie continues to be more appealing than a night at the movies, which costs significantly more than Netflix rental service.
Today, nearly 3 million users access Netflix's instant streaming service, watching an estimated 5 million movies and TV shows every week on their PCs or living room sets. They get it through Roku's player, which was successfully launched in May 2008. They get it through their Xbox 360s—Microsoft added Netflix to its Xbox Live service last fall. They get it through LG and Samsung Blu-ray players. They get it through their TiVos and new flatscreen TVs. By the end of 2009, nearly 10 million Netflix-equipped gadgets will be hanging on walls and sitting in entertainment centers. And Hastings says this is just the beginning: "It's possible that within a few years, nearly all Internet-connected consumer electronics devices will include Netflix."
Blockbuster Inc. is planning to close as many as 40% of its stores over the next two years as the company continues to struggle against new competitors. The Dallas-based movie-rental company had previously planned to close 1,000 stores, but on Tuesday it raised that number to as many as 1,560 of its 3,750 retail outlets. Of those, up to 300 may be converted to outlets, and up to 300 are undergoing lease mitigation or termination efforts. It said the move would help boost profitability and save $26 million in working capital. Blockbuster has come under increasing pressure in recent years as lower-cost rivals have entered the field.
Google Inc.'s YouTube is in discussions with major movie studios about streaming movies on a rental basis, a test of whether the online video giant can persuade its millions of users to pay for premium content. For Hollywood, the move could represent a bold attempt to offset its dwindling DVD sales with online revenue.
The Netflix Prize, a remarkable crowdsourcing experiment, refuses to die: Runner-up teams have joined forces to overtake the leader to qualify for a $1 million payday by coming up with a movie recommendation system at least 10 percent better than the company’s own technology.
One of the best parts of vacationing in a small town is visiting the local video store, where the proprietor--a scruffy guy who loves everything related to movies--will recommend films that he thinks you'll love. There's no scientific algorithm to his suggestions, no data analysis or statistical assessment. The owner makes his recommendations based on bits and pieces of casual conversation with customers. I was thinking about that video store as I read about the contest hosted by Netflix, which offered a $1 million prize to anyone who could significantly improve its recommendation system and ended in July. While digital technology has made our lives more convenient in many ways, especially in the way it helps people make buying decisions, smart companies realize that there are some things even the most sophisticated digital applications can't do. Above all, they can't replace the personal touch that often helps consumers distinguish one brand from another.
I’m guessing that most of you have already seen this deck that made its way around the Interwebs yesterday but if not, it’s definitely worth a read. It’s another example of why Netflix is so successful – because they haven’t left culture to chance. Additionally it’s also a great example of a favourite theme of mine – operations as marketing. This presentation is catnip for investors because it points to an extremely well run company and a management team who are focused on the right things.
Netflix Inc. is a standout in the recession. The DVD-rental company added more subscribers than ever during the first three months of the year. Its stock has more than doubled since October. But Netflix's chief executive officer, Reed Hastings, thinks his core business is doomed. As soon as four years from now, he predicts, the business that generates most of Netflix's revenue today will begin to decline, as DVDs delivered by mail steadily lose ground to movies sent straight over the Internet. So Mr. Hastings, who co-founded the company, is quickly trying to shift Netflix's business -- seeking to make more videos available online and cutting deals with electronics makers so consumers can play those movies on television sets.
The DVD rental chain says more people are watching movies at theaters, pulling traffic from Blockbuster stores. Profit plummets 39%.
As the world goes Kindle and iPhone-mad, paperbacks and mixtapes become worthy of devotion. Llewellyn Hinkes sees his entire music collection disappear and wonders what it meant.
What do Netflix, Peet's Coffee, and Apple all have in common? Maybe more than meets the eye. First off, each of these companies is defying expectations with stocks that continue to rise-- despite the recession. But how are they doing it? Could it be that the green qualities these companies have are inadvertently helping them beat the recession?
At a time when newspapers, Hollywood and the network business are struggling to find the future, two goofy guys who put foul words in the mouths of cartoon cutouts seem like visionaries.
Netflix showed little sign of the economic slowdown that's been nailing other companies this corporate earnings season. But it attributed its fourth-quarter jump in revenue, profit and subscribers to a surprising factor: surging popularity of its online video streaming service.
After more than a decade of disappointment, the goal of marrying television and the Internet seems finally to be picking up steam.