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Yesterday, Netflix announced that its aggressive international expansion plans will bring its internet movie and television streaming service to the U.K. and Ireland in early 2012.
The announcement should have been a bright spot for a company which has been flying high for the past several years. But it was overshadowed by a bout of bad news: last quarter, Netflix lost 800,000 subscribers in the U.S.
As we've seen time and time again, even the highest-flying companies can be thrust into crisis and controversy in an instant for a variety of reasons.
And for Netflix, which is in the midst of a crisis today, the cause of its problems was a decision to change its business model.
It can't be a fun week to be a marketer at Netflix. A year ago Netflix seemed unassailable.
Now its fate may be in the hands of the very Hollywood studios it bested and a 'pot-smoking guy' who owns its new brand on Twitter.
With a market cap of over $15bn and a share price of $290, Netflix is one of the internet's highest flying stars. But changes the company is making to its pricing could have it crashing back down to earth.
Yesterday, the company announced that it is offering two separate plans going forward: one for unlimited DVDs by mail, which costs $7.99/month, and one for streaming, which also costs $7.99/month. Currently, Netflix customers can receive both unlimited DVDs and streaming for only $9.99/month.
Not surprisingly, a 60% price increase has sparked an online fury, with angry Netflix customers threatening to drop their Netflix subscriptions.
Netflix is fast becoming the king of digital movies, and is one of Hollywood's biggest frenemies. But even though Netflix would appear to be sitting pretty, it may have some stiff competition soon.
The source: Facebook.
Online video may have a long way to go before it dethrones the television in the United States, but its rapid rise shows no signs of slowing down.
According to Nielsen, home and work online video usage rose a whopping 45% in January 2011 as compared to January 2010. Perhaps the most impressive fact: this growth isn't being driven by new users. The number of unique viewers only increased by slightly more than 3%, meaning that those who are already consuming video online are consuming more of it.
The more ads, the better. That seems to be the strategy for boosting online ad revenue for publishers of all kinds. First, the Online Publishers Association (OPA) decided that making ads bigger and bolder was one way to help boost publishers’ dwindling CPMs. Now, the TV networks are concluding that loading their online video shows with more ads is the best way to increase digital revenue.
It seems to fly in the face of common sense – after all, consumers have flocked to DVR because they can skip all of the ads hurled at them on broadcast TV or cable. Meanwhile, with shorter attention spans on the web, won’t more ads just make online viewers tune out? Research from the networks says no.
Last month, beleaguered video rental chain Blockbuster filed for bankruptcy. While the company's demise can be blamed on a number of factors, it's hard to ignore one: the rise of Netflix.
Netflix, which is now an $8bn corporation trading at just over $153 per share, looks poised to capture a big part of the nascent streaming business.
Once-dominant video rental chain Blockbuster is trying its hardest to prove that it can compete in the 21st century. It is closing down stores, and has been bulking up its on-demand offering.
But it looks like it may be too little, too late. Last Thursday, the New York Stock Exchange announced that the company would be delisted from the exchange after the company failed to win shareholder approval for a measure that would boost the company's stock price above $1, the exchange's minimum. More often than not, a company's delisting is signal of impending demise.
If there was any doubt among media buyers about putting money into online video advertising, 2010 should be the year to change that. Consumers are increasingly turning to the digital space to watch video. Moreover, the influx of professionally produced content is making the digital space more friendly to large advertisers.
As with most any medium, if the eyeballs are there, advertisers will follow. Now it's just up to the medium to deliver on the predictions coming in for the next year.
It's 2010, and HBO is getting with the digital revolution. This week the cable network started streaming its content online. With a tagline of “It’s HBO on your computer,” all of the network's series and films will now be available for streaming — to existing subscribers — at HBOGO.com.
HBO's premium content is the reason that more than a few consumers spring for cable. But the network isn't ready to bring their films and series directly to the public. They can always do that later, but it may be too late by then to make up the strides that Netflix has been making in online streaming.
Movie studios think cheap DVD rentals are a major factor in DVD sales that have been on the decline for some time. And now one of those studios, Warner Bros., may have the ability to prove the theory right or wrong.
That's because rental giant Netflix has inked a deal with Warner Bros. under which Netflix won't rent new Warner Bros. releases until they've been on sale for 28 days.