Eric Shonfeld from TechCrunch interviewed Netflix CEO Reed Hastings at the All Things D conference, and Hasting talked about the economics of streaming.
As you can imagine, it costs much less to stream a movie over the Internet than it does to mail it as a DVD. But Netflix ends up paying twice anyway because it already owns the movies on DVD. It has to pay the studios an additional streaming fee. The studios like that. “If the studios have their way, we’ll pay them two or three times,” quips Hastings. But he is resigned to paying wtice for movies he’s already bought. The way he looks at it, Netflix is paying the studios instead of the Post Office.
It’s 7:50 p.m. on 1 October 2007 at AT&T Labs, in Florham Park, N.J., and three of us are frantically hitting the “refresh” buttons on our browsers. We have just submitted our latest entry in the year-old Netflix Prize competition, which offers a grand prize of US $1 million for an algorithm that’s 10 percent more accurate than the one Netflix uses to predict customers’ movie preferences. Although we have not reached that milestone, we are hoping at least to do better than anyone else has done so far; if we can make it to 8 p.m. with the best score, we’ll win a $50 000 Progress Prize. For most of the summer we’d been ahead of our nearest rivals by a comfortable margin, and as recently as 36 hours before this moment, our victory still seemed to be a slam dunk.
The previous day, though, the lead had started to slip away from us. First, the teams then in fifth and sixth places merged, combining their talents to vault into second place, making us nervous enough to submit our best effort, which we had been saving for a rainy day. But before our improved score appeared, we were hit by another combination when our two remaining serious rivals joined forces to tie us. Worse, their entry had come 72 seconds before ours, meaning that in the case of a tie, they’d win.
The Onion has an exclusive on the launch of the new Netpix service for photos.
Launched in April, the new service offers a wide array of photos and genres, including pictures of sunsets, images of friends sitting around picnic tables, grisly crime scene photos, the complete works of Ansel Adams, snapshots of Carol and her dog, and recent portraits from Tanya Kohler's baby shower at the Treehouse restaurant in Manchester, NH.
"It's so convenient. You get a photo in your mailbox, look at it for a while, and then drop it in the prepaid envelope and send it back," Houston resident Jonathan Collins said. "I'll never look at pictures the same way again."
The company was founded by computer programmers and photography buffs Wallace Lockhart and Kurt Griggs, and has already amassed nearly 50 million users.
The WSJ reports that more people are cutting back and canceling cable TV, More Households Cut The Cord on Cable.
Amid tighter budgets, more people are trying to save money by cutting their cable cords. In response, cable companies are beginning to experiment with new Internet services.
In what's shaping up as the home-entertainment equivalent of severing a landline phone service, more people are joining the ranks of "cord cutters" by forgoing cable subscriptions that can run $60 or more a month.
Instead, they're turning to free over-the-air high-definition television channels and video-game consoles, such as Playstation 3 and XBox 360. They're also watching Internet-connected TV sets, paying a basic high-speed Internet fee of about $45, as well as set-top boxes from companies like Netflix Inc. Some are also using media browsers that they can download free and run on PCs, providing access to TV shows, movies and other content directly from the Web.
The recent USPS response to GameFly's complaint says that the envelope design is at fault, but some respondents to a survey on Postalnews claim that Netflix & Blockbuster are getting special treatment.
"We have to pull out netflix DVDs and put in a separate tray also in our office."
"In my office all the BLOCKBUSTER and NETFLICKS in outgoing mail are placed in a special tray upon return to the office. OTHER dvds are thrown in with the rest of the outging letter mail."
"As always the management of the Postal Service is lying we manually separate all Blockbuster and Netflix. Blockbuster is put in an Express bag and sent to a larger facility for manual processing. We try about every six months to run them in automation to no avail. We run them for a couple of weeks until netflix complains that to many dvd's are getting broke and then we return to manual processing."
"Netflix is being seperated because they are now mailing Blue-Ray disks and standard disks, while standard was doing well in automation with exceptions, Blue-Ray was not, Blue-Ray has a protective layer of only 0.1 mm while a standard dvd or hd-dvd has a protective layer of 0.6mm therefore the recording layer is verclose to the surface of the disk or in simpler terms this proximity of the information layer also means that the BD disc is more vulnerable to accidental scratches. Netflix was bitching about a boatload of scratched and broken disks as soon as they started shipping Blue-Ray. They could use a different package and help us out but nope, they see no reason to use different packaging of the 2 types."
Fast Company included Netflix CEO Reed Hastings as #4 on the list of Most Creative People of 2009.
Reed Hastings, 49, could have stuck with his first breakthrough idea -- Netflix recently mailed its 2-billionth DVD. Instead, he's swiftly embraced streaming online and direct to TV via half a dozen Netflix-ready devices made by LG, Samsung, Microsoft, and others. Hastings says his approach is to "get a mix of inspirations," test innovations, and let the customer decide. So far, it seems to be working: Netflix's stock price has doubled since last November, reaching record highs.
The Postal Service also claims that GameFly's unique packaging and use of different mailing rates are the root of its differential treatment.
"In fact, other DVD mailers use single-ounce letter rates, with essentially all outbound pieces handled on letter automation, and most inbound pieces handled the same," wrote the USPS in its response. "Gamefly instead uses flats rates, and two-ounce mail pieces. The differences in mail processing operations are substantial."
In its complaint, GameFly says that it tested a variety of different mailers to prevent disc breakage in the automated mailing machines. The USPS claims that it has repeatedly told GameFly its envelopes have a tendency to fold, making them too small to be automatically sorted into the machines GameFly believes are gentler on DVDs.
"Despite years of Gamefly having gotten this message from postal employees, inbound Gamefly mail is not extracted as a flat automatically from the DPRC (the first piece of equipment most inbound collection mail encounters) because it is not tall enough."
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