TV 2.0 (Netflix vs. Amazon vs The Old Gods)

[nacho]

The MSNBC Technoblog cites a study by The Diffusion Group of 500 Netflix subscribers that predicts 12-15% of Netflix subscribers will quit the service.

But now, this targeted report from TDG appears to show some compromise on the part of Netflix members, while still registering their disappointment over the new pricing plans: 70 percent of the respondents said as much when asked.

Due to the price increases (i.e. a plan that included both DVDs and streaming went from $10 to $16), TDG found that 44 percent of the report's participants were likely to cancel their DVD subscription, while keeping streaming; 34 percent would do the opposite. At least in this questionnaire, streaming seems to have the edge.

Those who said they'd ditch Netflix entirely named "a rental kiosk like Redbox" as the number one replacement option (42 percent), while 17 percent were prepared to check out streaming alternatives, such as Hulu Plus and Amazon.

Such retards... So if you go to another streaming service, it'll cost the same as streaming only at Netflix. And Netflix owns Redbox, right?

I guess it's just the protest.

[nacho]

The last three physical discs! Dead Poets Society (watching now), and then two discs for the short lived sit-com based off of Bourdain's Kitchen Confidential.

I'm keeping the account open till the deadline -- September 1st -- and may add some more titles just for the sake of my weird and bizarre principles and then I'll switch to streaming only!

How exciting... After obsessing over my Netflix queue since December of 2002, an era comes to an end.

[nacho]

PS: Do you know when you feel really old? When you realize that (a) Dead Poets Society was made in 1989 and (b) It stars the guy who plays Wilson on house as a teenager.

[nacho]

Of course, the Netflix shift to streaming only plays into a discussion about the Post office's eventual demise.  Today's news is that they're going to try and cut 20% of their workforce -- 120,000 jobs.

Not that Netflix is anything but a pebble in the ocean in the bigger picture, but it's one of those signs of the times things. Trending away from the mail.

[Reginald McGraw]

95% of my mail goes directly to recycling. The other 5% are wedding invitations and invitations to kids' birthday parties.

[nacho]

I keep all my mail in huge piles around my house surrounding the long-dead corpses of cats and dogs and have no running water.

[nacho]

Well, they got their wish. 185,000 jobs to be cut between now and 2015, and they're pulling out of Federal health insurance and retirement to "seek cheaper options."

Whew boy!

[nacho]

Oh-ho-ho!

Starz announced that they have ended formal renewal negotiations with Netflix, and Starz President & CEO Chris Albrecht issued the following statement:

"Starz Entertainment has ended contract renewal negotiations with Netflix. When the agreement expires on February 28, 2012, Starz will cease to distribute its content on the Netflix streaming platform.  This decision is a result of our strategy to protect the premium nature of our brand by preserving the appropriate pricing and packaging of our exclusive and highly valuable content.  With our current studio rights and growing original programming presence, the network is in an excellent position to evaluate new opportunities and expand its overall business."

Netflix's Steve Swasey told CNET in response to the announcement:

"Starz has been a great content partner since 2008 and we are thankful for their support. While we regret their decision to let our agreement lapse next February, we are grateful for the early notice of their decision, which will give us time to license other content before Starz expires."

The current Starz deal, estimated to be worth about $30 million per year, gave Netflix streaming hit movies from Sony & Disney, and contract renewal discussions were rumored to be in the $300 million range.

It'll be interesting to see if Netflix and Starz are able to get back to the negotiating table in time to rewew the agreement in one form or another, or if Netflix will cut new deals with the studios directly.

The timing of this deal couldn't be worse -- the price increase is just starting to impact customers who are already thinking about the value of their Netflix subscription.

[Reginald McGraw]

As a new Netflix customer, this is all very interesting!

[nacho]

It's a nasty hit...we could be seeing the end days of Netflix.

Then again, they do have lots of time to cook up something to soften the blow. Like, maybe, finally cracking the HBO nut.

[RottingCorpse]

You were saying?

Dish Network spending spree part of plan to revamp its business

By buying Blockbuster and paying almost $3 billion for broadband spectrum, the nation's third-largest pay-TV service provider plans to become a Netflix rival and a player in wireless communications.

Reporting from Englewood, Colo. — It seems like an odd strategy for a company in a mature business with limited growth to buy another with even dimmer prospects.

But that's what satellite broadcaster Dish Network Corp. did in April when it acquired bankrupt video store chain Blockbuster in a deal valued at $320 million.

Purchasing Blockbuster, and embarking on an almost $3-billion spending spree for broadband spectrum, are part of Dish's ambitious plans to turn the company from a pay-television service with about 14 million subscribers into a competitor of Netflix Inc. and a player in wireless communications.

"We are putting together the building blocks to be able to provide a whole suite of services to the customer," Dish President and Chief Executive Joe Clayton said. "Wireless voice, broadband, video, mobile … we're going to have the capability to do all of the above."

The former chairman of Sirius Satellite Radio who earlier was instrumental in the development of satellite broadcaster DirecTV Inc., Clayton was recruited two months ago to take over day-to-day operations of Dish from co-founder Charlie Ergen, who remains chairman.

Ergen is now free to focus on big-picture strategy at a time when the pay-television business faces mounting challenges, as consumers increasingly turn to the Internet or services such as Netflix to watch their favorite shows rather than paying for cable or satellite service.

"What Dish has basically done is bought itself a lot of options to keep itself more relevant," Wells Fargo securities analyst Marci Ryvicker said.

In an interview at Dish's Colorado headquarters, Clayton made clear that he has big ambitions for Blockbuster, including the launch of a subscription streaming service to rival Netflix, which has a 20-million-subscriber head start.

"Everybody's enamored with Netflix. Who's to say we can't do the same thing?" Clayton said. "We have access to the studios, we have access to huge movie libraries."

Hollywood, he added, would welcome another bidder for content. "Don't you think they would encourage us to get into this business?"

Clayton wouldn't put a timeline on when a Blockbuster streaming service would launch except to say, "Sooner is always better."

As for the rental chain's stores, the plan is to keep 1,500 of the 1,700 outlets open. But Clayton is not deluding himself that the traditional DVD rental market is going to make a comeback. He sees the stores as not only DVD rental and sales outlets but also as a promotional platform for Dish and the Blockbuster streaming service, as well as whatever wireless business the company pursues. He doesn't rule out selling consumer electronics at the chain either, an approach known as a store within a store that has proved successful for RadioShack Corp.

"I will predict that we will have a lot of hardware manufacturers coming to us and saying, 'Hey, is there room for us?' " Clayton said.

Clayton bristled at the notion that the purchase of Blockbuster was illogical.

"I have heard a lot of people say, 'That was a stupid acquisition.' That's crazy," he said, adding that the Blockbuster brand alone "was worth over $320 million dollars."

Branding experts say the Blockbuster name still has some value.

"They're not starting in their own end zone," noted Allen Adamson, a managing director at brand consultants Landor Associates. "It has the potential to be a strong brand again, but they have to build out an online experience that delivers."

Still, some Wall Street analysts worry that the company may be biting off more than it can chew with its recent spending spree.

"It sounds ambitious, innovative and expensive," said Sanford Bernstein analyst Craig Moffett, who last month issued a report on Dish calling the stock a "leap of faith."

Dish stock has been on a tear, jumping more than 60% from a year ago and 45% since the Blockbuster purchase. It has outperformed the Standard & Poor's 500 index by about 40% over the last six months.

Although some of those gains can be attributed to Dish's settling of a long legal battle with digital video recording company TiVo Inc., the strong performance is also seen as a vote of confidence in Ergen, a savvy but secretive entrepreneur who built Dish into the nation's third-biggest pay-television provider after cable giant Comcast Corp. and rival satellite broadcaster DirecTV.

Ergen, 58, who rarely talks to the press and usually addresses analysts only on earnings calls, has not been subtle about his doubts about the long-term growth of his core business.

"My kids think I'm crazy for being in the pay-TV business because they don't pay for TV," Ergen told analysts in November. Noting the competition from not only cable and DirecTV but also Netflix and the Internet, Ergen said, "The world is changing" and Dish has to "figure out how we can do things differently and how we can compete."

Clayton's folksy, outgoing manner stands in sharp contrast to his seldom seen and rarely heard boss.

[nacho]

My Spidey Sense says that Netflix is doomed. It'll take two or three years, though.

[Reginald McGraw]

Something will fill it's place. I'm all for competition if DirectTV gets its act together.

[nacho]

I hate change. I've been with Netflix since 2002 and everything was fine! Everything was just fine! It automatically charged my credit card, movies magically appeared in the mail. I didn't have to think about anything.

But noooo... Now everything's better, faster, and more awesome. How sad.

[RottingCorpse]

Something will fill it's place. I'm all for competition if DirectTV gets its act together.

What he said!