Hacking NetFlix

Netflix Pays Big $$ To Studios For Streaming; DVD Costs Drop

Greg Sandoval at CNet dug through the financials and discovered that Netflix spent $66 million in Q2 and a total of $116 million this year on streaming titles, a huge increase from $9 million in Q2 2009. How did Netflix increase the payout to the studios?

First, delivering digital versions of films over the Web is far cheaper than shipping physical discs. As Netflix users have opted to watch more streaming movies and receive fewer DVDs delivered by mail, the company has been able to trim postage and DVD-acquisition costs. For example, Netflix spent $24 million in the June quarter this year on DVDs, compared with $43 million during the same period last year, according to the company's June earnings report. For the first six months of this year, Netflix spent $61 million on discs, down from $89 million for the same period last year.

Netflix's growth since they were founded in 1997 has been amazing -- they are expected to hit 20 million subscribers sometime next year, a milestone that took Comcast 20 years to reach. Comcast has the advantage in profit, having earned $3.6 billion last year.

Thanks to FearNo1 for sending this in.

TurningArt: Netflix for Art with Subscriptions Starting at $9.99/month

TurningArt is one of the more interesting variations on the Netflix business model I've seen, and with subscriptions starting at $9.99 per month it could change the way people acquire artwork. 

 

For $9.99 per month TurningArt customers get a new piece of artwork every 3 months (free shipping both ways). In an interesting twist the subscription fee counts towards a purchase, but I'm wondering what percentage of people will ultimately purchase a work, and what percentage of the rental fee goes to the artist.

via Tristan and Business Insider.

Netflix Announces PS3 Search; Supports Disc-Only Titles

Greg Peters, Netflix's vp of product development, formally announced the new PS3 search feature (covered here on Tuesday) along with a new architecture for updating Netflix-ready devices:

Search comes as part of a software upgrade from Netflix – delivered by our continuous improvement architecture. This architecture allows us to improve your Netflix experience by adding more and more features over time. Sony is the first of the game consoles to adopt this new software from Netflix, so if you’re a PS3 user, you can now search for a movie or TV episode on your TV via your PS3. No need to go back to your computer to add it to your Queue. We have more cool features in store with this continuous improvement architecture so stay tuned.

Some readers report that they have had the PS3 search for a while, but it's now available to all Netflix PS3 customers.

I had a chance to play with the search, and it does something the Roku doesn't: the PS3 search includes disc-only titles in the results. If you search for a movie that is not available on streaming, you can add it to your DVD queue, and it recommends streaming titles that are similar to the disc-only title. For The Hurt Locker Netflix recommends Full Metal Jacket, Letters from Iwo Jima, and The Constant Gardener.

 

What do you think of the new PS3 search?

Maximum Simultaneous Netflix Streams & Netflix-Ready Players

Miguel asked if there was a limit to the number of simultaneous Netflix streaming titles you could watch, and according to the Netflix website the maximum number of streams depends on your unlimited plan:

Some membership plans allow you to watch simultaneously on more than one personal computer or Netflix ready device at the same time. If you are on the 1 disc out at-a-time plan, you may watch only one device at a time. If you are on the 2 discs out at-a-time plan, you may watch on up to two devices at the same time. Members on the 3 disc plan can watch on up to three devices. The maximum is four devices simultaneously, and that is available for members on the 4 or greater discs out at-a-time plans.

I was able to get 3 Netflix-ready devices (Mac, iPad & Roku Player) playing the same episode of Mythbusters at the same time on a 6mb DSL connection:

 

There is also a limit on the number of Netflix-ready devices you can activate per Netflix account: 6. If you have more than 6 devices like me (I test a lot of different Netflix-ready devices), you can deactivate a device and enable a new one.

Have you hit the streaming or Netflix-ready device limitation?

Netflix's Biggest Competitor is the Public Library?

The Hartford Courant cites a study that claims public libraries rent more movies than Netflix, Redbox or Blockbuster:

The survey, released this year by OCLC, a nonprofit library co-operative and research organization, found that public libraries in the United States lend an average 2.1 million videos every day, slightly more than the 2 million that Netflix ships. The other top two competitors, Redbox and Blockbuster, come in at 1.4 million and 1.2 million respectively, according to daily averages provided by company representatives.

Netflix's Steve Swasey on libraries: "I think of libraries as places for books," said Steve Swasey, Netflix's vice president of corporate communications, adding that Netflix doesn't view public libraries as a competitor."

If libraries are looking for funding, why not charge $1 per night for DVD rentals? 

via Inside Redbox.

Comcast Chairman on Netflix: "They Do a Great Job."

MarketWatch reports that Comcast Chairman Brian Roberts had nice things to say about Netflix:

"I think one of the things Netflix does beautifully is to give people a convenient way to search for the titles they want, and to offer recommendations for other movies they might want to see. We don't have that capability with our electronic programming guide right now." Comcast will continue to work on its programming guide to make it more useful to its customers, Roberts said.

I dread searching the Comcast menus for shows and movies I want to find, so it's great to see that Comcast is aware of the problem. 

Netflix Taking Hulu Threat Seriously: Hiring Director Product Management - TV Shows

Netflix has posted a job opening for a director of product management - TV shows to "...make Netflix the place people go to watch TV shows." From the job description:

• Work with design, engineering, content buying and marketing partners to create industry leading way to find and watch TV shows on the Netflix website and on devices, such game platforms, set top boxes, digital TVs, etc.

• Develop a deep understanding of the characteristics of TV shows, how they differ from movies, and how best to bring TV shows to life within the Netflix service.

• Leverage this understanding to develop winning hypotheses on how to increase engagement with our content.

• Lead design and engineering teams in implementing your ideas.

I'd like to be notified when a new episode of a TV show in my queue is available, and (obviously) see more TV shows available on Netflix streaming. 

How do you think Netflix could improve the TV watching experience?

The Copyright Wars: We Win Some & We Lose Some

The EFF announced that they won a couple of exemptions from the Digital Millenium Copyright Act (DMCA), including the ability for customers to unlock their cell phones (but it could void your warranty), and for DVD ripping to be legal in some cases:

EFF also won a groundbreaking new protection for video remix artists currently thriving on Internet sites like YouTube. The new rule holds that amateur creators do not violate the DMCA when they use short excerpts from DVDs in order to create new, noncommercial works for purposes of criticism or comment if they believe that circumvention is necessary to fulfill that purpose. Hollywood has historically taken the view that "ripping" DVDs is always a violation of the DMCA, no matter the purpose.

"Noncommercial videos are a powerful art form online, and many use short clips from popular movies. Finally the creative people that make those videos won't have to worry that they are breaking the law in the process, even though their works are clearly fair uses. That benefits everyone — from the artists themselves to those of us who enjoy watching the amazing works they create," added McSherry.

The bad news is that TechDirt reports that decrypting DVDs for playback on Linux or breaking encryption for Netflix streaming on non-supported devices like Linux were rejected:

Subscription based services that offer DRMprotected streaming video where the provider has only made available players for a limited number of platforms, effectively creating an access control that requires a specific operating system version and/or set of hardware to view purchased material; and Motion pictures protected by antiaccess measures, such that access to the motion picture content requires use of a certain platform.

Thanks to LEB for sending this in.

Netflix's Neil Hunt Nominated to Logitech's Board of Directors

Logitech announced that Neil Hunt, Netflix's chief product officer, has been nominated as new board member, with the election to be held on September 8th.

Slate's Candid Queue Series Takes a Look at Staffer's Netflix Queues

Slate's Procrastinate Better has an interesting series called Candid Queue where staffers explain the movies in their Netflix queues. This week Slate Editor David Plotz and DoubleX co-editor Hanna Rosin talk about the movies in their queue:

1) No Impact Man: The Documentary

DAVID: This is the only documentary in our entire queue, which is unusual, because documentaries—being short and non-special-effects-y—are by far my favorite movies to watch at home. Based on what I've read about No Impact Man, I suspect I will have the same reaction to it as I did to Morgan Spurlock's Super Size Me, when I was filled with an overwhelming desire to punch the protagonist in the face.

HANNA: Maybe I am obtuse, since I thought, based on the New York Times article, "The Year Without Toilet Paper," that No Impact Man was a book project, not a documentary. In any case, this will be a good bonding experience for us. David, you have enough No Impact Man in you—farmer's market obsessive, biking commuter, etc.—that it will be useful for you to realize that you're only two heirloom tomatoes away from being incredibly annoying.

How would you explain some of the movies in your queue?