Hacking NetFlix

Netflix To Add 1,500 Blu-ray Titles in 2008

Video Business reports that Netflix will be significantly increasing the selection of Blu-ray titles in 2008.

McCarthy also said today that Netflix will add as many as 1,500 Blu-ray titles to its existing 400 titles this year as customers ditch Toshiba’s discontinued HD DVD format and converge onto a Sony’s Blu-ray format. He said he didn’t know what effect more Blu-ray titles would have on earnings.

“It seems apparent that content will cost us more,” McCarthy said. “Whether we raise prices will be entirely a function of churn, subscriber acquisition costs and gross margins.”

Netflix's 2007 Annual Report

Netflix released the 2007 Annual Report, and you can download it from the Netflix website.

Here are a few tidbits from the report:

From the front page of the report: "SIC Code 7841 - Video Tape Rental." Netflix has never rented VHS tapes, and the DVD format has been around since 1995. Time for a new SIC code? (p. 1).

Ever wonder why titles disappear from Watch Instantly? "For titles delivered through our instant-watching feature, we generally license the content directly for a period of time. Following expiration of the license term, we are no longer able to distribute the content through our instant- watching feature unless we extend or renew the associated license agreement." (p. 8).

Netflix has approximately 90,000 titles on more than 69 million DVDs. (p. 9).

Netflix has more than 1,542 full-time and 1,128 part-time employees. (p. 10).

I guess high-def discs Blu-ray are not as durable as traditional DVDs: "These new high definition format DVDs appear to have higher damage rates than regular DVDs." (p. 18).

Is someone attacking Netflix's website? "Our Web site periodically experiences directed attacks intended to cause a disruption in service." (p. 19).

Netflix is involved in a number of legal proceedings, including the Frank Chavez class action lawsuit, Lycos patent infringement claim, Dennis Dilbeck anti-trust class lawsuit, and several other patent-infringement claims. (p. 65-66).

DVD DRM Prevents Playback on Xbox 360 & Media Center PC's

Dylan writes, "I recently had a problem that I wanted to share and see if others are experiencing a similar problem. I received the "Gone Baby Gone" DVD from Netflix and it is not playable in either my Xbox 360 or my Vista Media Center. There appears to be some new type of DRM that prevents it from being played on computers. The disk is in pristine condition. I don't have a standalone DVD player any longer so the disk is essentially useless to me."

Dylan isn't alone, there are a number of people that are reporting problems with Gone Baby Gone on the Xbox and Media Center PC's.

Yet another case of DRM preventing a customer with a legal version of a movie being unable to watch it. If they're going to implement a new DRM scheme, why don't they bother testing it on the Xbox 360 and Media Center PC's? There are more than 18 million Xbox 360's, and more than 60 million Windows Media Center PC's.

Netflix Looking for Personalization Researcher

Adrian Cockroft is hiring a personalization researcher for his team at Netflix.

We are looking for a very experienced engineer who can take the lead, researching, modeling, presenting, designing and building algorithms that run in a service oriented architecture to support millions of customers. The successful candidate will be a self-motivated, intellectually curious individual. A Doctorate or experience working in a research environment, work with personalization algorithms, machine learning, adaptive systems, and statistical analysis would be a bonus.

I manage a sister group to the one that does the Cinematch star ratings predictions and hosts the Netflix Prize, we use that data as an input along with everything else we know about movies and customers to come up with the actual lists of movies that are shown all over the site. The research position in my group works on algorithms and mining for new data sources.

If you're interested, you can view the job posting.

Tracking Netflix User's Interest in HD DVD & Blu-ray

The Compete blog tracked Netflix customer searches for HD DVD and Blu-ray titles during the final months of the battle:

Interesting tidbit: "...interest in both platforms remains very low (less than 1% of all account managers online)."

Redbox To Place Kiosks at Thousands of Walgreens & Wal-Mart Stores

Inside Redbox reports that Redbox will add 1,800 additional Walgreens locations, in addition to more than 2,700 new Wal-Mart stores announced earlier this month. Redbox has more locations than Blockbuster (6,700) and is owned by McDonald's and Coinstar.

Thinking About Buying a Blu-Ray Player?

Now that HD DVD has conceded defeat, are you thinking about buying a Blu-ray player? Gizmodo has some excellent advice: Stop! Why It Still Isn't Safe to Buy Blu-ray.

By now you know waaaaay too much about Toshiba's format-war surrender, the death of HD DVD at the hands of the larger Blu-ray armada. You may even be eying the Blu-ray players mounted proudly in point-of-sale displays at Best Buy or Wal-Mart. Pricing hasn't come down to HD DVD player levels—and with those sinking even further, it's unlikely they ever will—but the need to get in on the action might provoke you to spend some extra dimes. All we're saying is DON'T! Not yet. If you don't know why, let us explain.

In the story, Wilson Rothman gives 3 good reasons why you should wait to boy a Blu-ray player.

Are you going to wait, or is the lure of 1080p high resolution too much to resist?

Apple TV Requires HDCP-Compatible Television

BoingBoing reports that the Apple TV requires that your TV support HDCP copy protection:

When I attempted to watch the movie, however, the Apple TV displayed an error message: "This content requires HDCP for playback." HDCP (High Bandwidth Digital Content Protection) is a form of digital rights management (DRM) that prevents you from playing video over DVI and HDMI connections (in my case) if you don't own compatible hardware that can decode the signal properly.

Netflix uses COPP, as discovered by Davis Freeberg, to make sure that Watch Instantly movies can't be pirated.

Both of these methods inconvenience people that have paid a lot of money for their TVs. When are the studios going to stop treating their customers like thieves and make life easy for everyone?

via Spout.

Some Independent Video Stores Are Thriving

The Salt Lake Tribune has the story of 4 independent video stores that are thriving, despite competition from Blockbuster and Netflix. I knew a few video store owners in the 80's that faced Blockbuster and lost, but the article explains how one store owner fought back:

Pam Major of Cosmo Video wasn't so lucky. She was forced to go head-to-head with Blockbuster in a battle for territory.

Major said that in the late 1990s Blockbuster representatives tried to trick her into selling off her inventory by promising to buy her out at a later date. When she refused, they called her for months promising to open a store across the street and threatening to put her out of business. She made a deal with her landlord to forego paying rent if necessary and told Blockbuster that she was ready to enter a price war with them.

"I threatened to rent movies for 50 cents a piece, so they backed off. Next they tried to purchase the building from the owner, but he's independent, too, and supports other independents," she said.

Next, Major went on the offensive. She placed a giant jug on her counter and offered a free rental to anyone who would cut up their Blockbuster membership card into the jug.

"We filled two jars," she said. "It didn't really destroy their membership with Blockbuster, it was just an 'in-your-face' sort of thing."

Artists Want Their Share of the Music Industry Settlements

The NY Post reports that artists have yet to receive their share of the hundreds of millions of dollars in settlements, INFRINGEMENT! Artists Say They Want Their Music Site Dough.

A contingent of prominent artist managers claims that little to none of that money has trickled down to their clients. They are now considering legal action.

"Artist managers and lawyers have been wondering for months when their artists will see money from the copyright settlements and how it will be accounted for," said lawyer John Branca, who has represented Korn, Don Henley, and The Rolling Stones, among others.

"Some of them are even talking about filing lawsuits if they don't get paid soon."

Record label sources said corporate bosses are still deciding on how best to split the money. In determining the payout, they said not every artist is owed money and it must be calculated with regard to the level of copyright infringement for each artist.

What's more, these sources said that after the labels recouped their legal expenses, there wasn't much left to pass along to the artists.

It's no wonder that we face another strike this summer since the studios constantly try to rip off the artists, writers, actors and directors.