netflix

CDN Limelight Networks optimistic on 2009 operations

Pete Wylie — Tue, 02 Dec 2008 17:53:49 -0500

Limelight Networks has had somewhat of a rough time this past year, beginning with a patent infringement case it lost to Akamai to the tune of $46 million on March 3, 2008. Its stock price dropped 25 percent that day and has yet to recover, but Chief Strategy Officer Mike Gordon said the CDN is much better positioned than people tend to admit.

"First, everyone always mentions the Akamai case as a reason to think Limelight isn't performing well or can't get profitable," Gordon said. "But we've put aside the money to fund the damages except for interest, and we won't need to save any more for the damages after Nov.1. You can expect to see total money spent on litigation and other legal costs decrease significantly and we also have reduced our reliance on the patent in question to 11 percent of total revenue."

Gordon said the company is optimistic about its status entering 2009, as it continues to see its revenue per customer grow and its many partnerships flourish. As an example, he mentioned Netflix's recent announcements that it would stream videos directly to a variety of devices in the living room, such as Xbox 360s and BluRay players, as a major positive for Limelight. Limelight has an existing relationship with Microsoft, and will handle the incoming streaming to its gaming console, adding to a trend of Limelight increasing revenue per customer into 2009.

Limelight has operated at a loss for many quarters in a row, but if the litigation expenses from the Akamai case and the damages award prove to be the biggest factors behind that, as Gordon posits, Limelight could be in better shape than first meets the eye. Gordon points to the increased of revenue per customer from $94,000 to $102,000, and a 9 percent sequential increase in profit in the third quarter as indictors of growth to come.

"We'll also increase our margins through managing costs and updating infrastructure to become more efficient," Gordon said. "Customers will continue to choose Limelight because of our scale, performance and partner ecosystem."

Blockbuster streams video to the TV

Pete Wylie — Tue, 25 Nov 2008 09:33:47 -0500

Blockbuster announced its into the internet delivery of movies to living room set-top boxes Tuesday. The offering, "Blockbuster on Demand," will require users to purchase a set-top box made by 2Wire Inc., but customers can get it for free if they purchase 25 downloadable movies in advance for $99.

Movies will be available for $1.99 after the initial movie credits are used up. No other plans are available for the service, which means that not only did Netflix beat Blockbuster to market by three months, but it offers customers lower, more flexible pricing and distribution to BluRay players, TiVos, and Xbox 360s that save consumers from the purchase of a set-top box. Plus, Blockbuster's plan only offers more than 2,000 titles, while Netflix offers more than 12,000 with its IP-delivery system.

But, Blockbuster CEO Jim Keyes was quick to point out the advantages of its service. He said Blockbuster on Demand will feature mostly new releases, but by "new" he really mean "30 to 60 days after the film's DVD release." Does that still count as new?

Also, Keyes asserts that Blockbuster's pay-as-you go pricing gives customers more flexibility, but Netflix offers the streaming service as a bundle with DVD home delivery, with packages starting at $8.99, so if you want to watch more than four movies a month, Blockbuster is not the best bargain. Keyes also touts the ability to deliver HD content - a most interesting concept given the taste for bandwidth caps AT&T and others have.

In addition to a staunch challenge from Netflix, Blockbuster has to compete with Amazon and Apple for the direct-to-TV movie streaming market.

Sounds like too little, too late.

For more:
- the Chicago Tribune has an article

Will online video and TV eventually merge?

Pete Wylie — Wed, 12 Nov 2008 10:25:52 -0500

Since TelcoTV is this week, set-top/online video convergence is worth discussing. By the way, Dan O'Shea is providing some interesting coverage on the keynotes and major announcements at our sister site, FierceIPTV, that you should all check out.

Several big name companies have announced plans to stream movies directly to set-top boxes in the past few weeks, with Netflix leading the charge and racking up partnerships and distribution deals. Sling Media probably has the model closest to true convergence, as it is actively working on making online video content available on HDTV's, TV content available online, and both online video and TV content available on mobile devices. Even old-line Blockbuster has taken the set-top plunge.

With myriad transcoding standards and streaming platforms available, compatibility issues always arise when discussion of migrating online video content to big television screens occurs.

You also have to think that YouTube, Hulu and especially Veoh, as it seeks to increase market share, will be researching and perhaps developing solutions that bring the huge inventory of online video to the TV with clarity and integrity.

All the big CDN's would have a stake in the move to integrate the two, currently separate, media. Akamai, Brightcove, Level 3 and others could see big upticks in hours of videos streamed if consumers begin to watch large amounts of online video on their home televisions. Those that also have video platforms or players could tweak them for use on TVs as well.

Of course, traditional TV networks, both cable and broadcast, would stand to lose considerably from the advent of a solution that makes other content widely available on TVs. The competition for the TV time from free content would likely drive down the ad rates TV networks can charge. If online video companies start stealing eyeballs from the Big Four, expect some not-so-friendly words or even lawsuits, as the TV companies defend their turf.

In addition to the traditional companies in the online video space, you can't count the Telco IPTV bundled providers out, because they already have a connection with large customer bases, and could add online video-to-TV services as just another part of the bundle.

I'd be very interested, as always, to hear from you about your thoughts on this issue, how soon it might happen, will it ever catch on and the direction the adoption of online video content will take in regards to viewing the content on home TVs.

- Pete

Netflix streaming video for TiVo

Pete Wylie — Thu, 30 Oct 2008 12:36:44 -0400

Netflix and TiVo announced today that Netflix will begin streaming movies and TV episodes directly to TiVo boxes by the end of 2008. A beta test of the service will go in to effect for select customers immediately. A full launch of the service is slated for December.

DirecTV and Series 2 TiVo users will be left out unfortunately, but all other TiVo box owners will have access to the service, according to the release. Also, customers who already subscribe to both Netflix and TiVo will not have to pay any extra fee for the direct streaming.

"For Netflix and TiVo subscribers, this collaboration offers a fabulously easy way to enhance the enjoyment of watching movies in the comfort of their living rooms," said Reed Hastings, co-founder and CEO of Netflix, in a release. "Subscribers to Netflix and TiVo are avid movie watchers and this combination gives them immediate access to all of the great content available through TiVo and the thousands of additional choices available to be streamed instantly from Netflix."

The TiVo deal is another in a series of partnerships Netflix has announced in recent weeks, as the company diversifies from its original (U.S. Postal) mail-based movie delivery service. It announced a content partnership with Starz that upped its library of streaming movies earlier this month, and launched instant streaming capabilities for Apple computers this week.

For more:
- see the joint release here

Netflix instant streaming comes to Mac

Pete Wylie — Mon, 27 Oct 2008 11:38:38 -0400

Netflix announced Monday it is using Microsoft's Silverlight online video platform to bring its instant streaming movie service to subscribers using Apple Macintosh computers. The service has been available on Windows PCs for some time, and Netflix plans to have the platform released for all subscribers by year's end.

Silverlight enables advanced DRM functions on content streamed through the service, helping Netflix as it expands its library of stream-ready content. Netflix currently has 12,000 titles in its library, but it has announced a string of partnerships with Disney, CBS and Starz Networks recently to grow its portfolio.

"Silverlight with Play Ready offers a powerful and secure toolkit for delivery of dynamic streaming, which offers faster start-up, and higher quality video, adapted in real time to users' connection speeds," said Netflix Chief Product Officer Neil Hunt in a prepared statement. "Members who enjoy watching movies and TV episodes from the growing library of choices that can be instantly streamed at Netflix will be thrilled with this next generation improvement of access and quality, on a broader range of platforms, including Intel Macs and Firefox."

For more:
- see the crunchgear.com write up of the joint release here

Netflix and Starz make a deal

Pete Wylie — Wed, 01 Oct 2008 08:56:06 -0400

Netflix and Liberty Media's Starz announced Wednesday that more than 1,000 Starz movies will be available for real-time streaming on Netflix's site. It's a big step for Starz, which, up to this point, had no new releases available for streaming due to licensing issues with the major studios.

Netflix will pay Starz a fee for the right to stream the movies, so it appears there is significant upside for both parties in this arrangement. Netflix users will not have to pay any additional fee for the new content, which includes box office smashes like "Pirates of the Caribbean: At World's End," "Ratouille," and "Superbad." Starz owns streaming rights to the films it licenses from Disney and Columbia, so they were able to offer Netflix an in with the majors. Disney Channel content will also be available for streaming, according to the joint release.

Netflix users will not be able to download or rip the movies they stream through the Starz deal (at least not legally).

For more:
- see the Variety article here

Net Neutrality, Big Glass Rooms and DVRing

Doug Mohney — Thu, 24 Jul 2008 15:47:17 -0400

A lot of companies are betting on 1) a significant number of consumers with a lot of bandwidth and 2) the ability to either have or negotiate some sort of quality of service for said service. Crazy? Or not?

Netflix believes it will have around 20 million worldwide streaming customers down the road. It is cutting deals left and right with Sony and Microsoft and Roku to put affordable devices in the home to tap into online content. If the latest skirmish between the FCC and Comcast doesn't get thrown out by the courts, broadband providers will either have to let all traffic go through unhindered or result in inflicting "consumption based billing"--bandwidth caps.

Bandwidth caps wouldn't seem to go too well with a video on demand service, be it from Amazon.com or Netflix or anyone else. Reading between the lines, Time Warner has proposed charging $1 per GB for traffic exceeding the cap, so that would price a typical DVD-quality movie download at around $4, in addition to whatever monthly subscription fee is charged by Netflix (or per movie fee by Amazon/iTunes).

Now, $4 for a DVD download sounds suspiciously like the $5 you pay for a typical movie rental, less the gas and time it takes to go get it. Make it an HD download and life gets ugly at $20-40 per movie, so maybe Time Warner wants to breath life back into snail mail and Blockbuster?

Mark Cuban says the way to cable company happiness is for everyone to adopt the ‘60s era data center model where video content is centrally stored and archived by the service provider and we shell out another $5 per month on top of the other monies we send to them. I'm seeing Comcast work a variant of this scheme locally with mixed results.

On the other hand, centralized storage and management flies in the face of the decentralized nature of more power at the edge going on since the PC revolution of the ‘80s. By and large, people like to have things when they want them and not be dependent upon the network/servers to provide them upon demand. And there's always the "We don't trust the big company" streak that runs in a lot of folks.

- Doug

Sparse Pickings for Networked TV Audience

Doug Mohney — Thu, 24 Jul 2008 11:03:06 -0400

After a flurry of announcements from Microsoft, Netflix, TiVo, and others touting how their various devices can deliver content to the living room TV, Streamingmedia.com EVP Dan Rayburn crunches the numbers for a little reality check.

Blogging over at GigaOm, Dan figures there are about 19.3 million hardware boxes of various flavors sold which can deliver online video content. It's not a bad number, until you start applying filters on how many people actually have both an Xbox Live and a Netflix account, or take into account the number of households that have later-model Series 3 TiVos capable of accepting broadband feeds.

Adding a SWAG factor, there're about 7.2 million consumer boxes able to access broadband content. Fudge some more to allow for tech-junkie consumers that likely own multiple devices--such as an Xbox 360 and a TiVo and a PS3--to slice the pie down further to around 5.7 million or so unique users.

Depressed yet? Estimate take rates for adoption and long term use to come up with a number of less than 3 million consumers using boxes to bring Internet-hosted video to their TV.

Dan thinks cable companies have a better shot of delivering Internet video to your TV set, even if the video is coming from the Internet. However, Netflix and others are likely not counting on today's numbers, but those five years down the road.

For more:
- Rayburn blogs about video content reaching few users

Related articles:
Netflix: 20 Million Future Streaming Customers, DVD Peaking
Amazon Joins the Instant-on VOD Club

SPOTLIGHT: Battle for the TV

Doug Mohney — Mon, 21 Jul 2008 14:34:07 -0400

There's a war over who will supply online video to the home TV starting to build, with three major players and lots of others wanting to buy in says GigaOm.

Amazon, Apple, and Netflix are named as the front-runners for their brand name recognition, deep pockets, and infrastructure. Amazon has a large user base, a new VOD service and an "online locker" model to store purchased movies, but had trouble on its first VOD go round and doesn't currently offer HD. Nextflix is moving out of its DVD mailing model to online streaming, but it only has 10,000ish titles and doesn't have HD.

Other players include Microsoft and Sony's game consoles doubling as home streaming boxes, TVs with Internet functionality built-in, and the cable and telecom companies who control the pipes to the end-user.

For more:
- GigaOm draws the battle lines for TV's future

Related articles:
Netflix: 20 Million Future Streaming Customers, DVD Peaking
Amazon Joins the Instant-on VOD Club

Amazon Joins the Instant-on VOD Club

Doug Mohney — Thu, 17 Jul 2008 12:18:57 -0400

Amazon.com has announced a new online store for TV shows and movies, joining Netflix in the battle of instant-on video gratification.

The new store will have 40,000 movies and TV programs available for immediate streaming; no waiting for downloads. It also appears Amazon has worked out some sort of bundle or tie-in deal with Sony, allowing Sony Brava HDTV owners to access the site through a $300 wireless broadband device; future TVs are expected to have the capability embedded and Amazon says it will work with other hardware manufactures for both streaming and bundling in the future.

One feature is an online "locker" allowing users to buy a TV show or movie without actually downloading a file to a PC hard drive, allowing customers to watch shows from any PC, regardless of location.

Current content seems to be just about anything except for HBO, Disney, and ABC; since Disney is pretty tight with Apple.

This is Amazon's second shot at the video-on-demand market; Amazon's Unibox wasn't successful because it only worked with Windows PCs and TiVos and also required a download of special software. The company is not expected to make a lot of money on its new service due to infrastructure and royalty costs, but Amazon Video on Demand provides a "footprint" into consumers' living rooms that leads to more Amazon.com traffic.

For more:
- New York Times Amazon video on demand scoop
- PC World gets a look at the Amazon VOD beta

Related articles:
Netflix Streams Past the Mailbox & PC
A Little Stream From Amazon

SPOTLIGHT: More content for Netflix box, more boxes for service.

Doug Mohney — Thu, 03 Jul 2008 10:51:52 -0400

Netflix is getting more content partners lined up, says News.com. While execs aren't saying, YouTube and Hulu could be potential partners for Netflix "Watch it Now" streaming service. Rumors also say Sony and/or Microsoft will support the "Watch it Now" service on the PlayStation 3 and Xbox 360, respectively.

The $99 Netflix box, currently made by Roku and potentially by other manufacturers, is able to call up a live video stream through a network connection and feed it directly to a TV.

For more:
- News.com blogs about the Netflix adding content

Related articles:
Netflix and LG go for video on demand
Netflix: 20 Million Future Streaming Customers, DVD Peaking

Past and Future

Doug Mohney — Fri, 30 May 2008 00:23:44 -0400

Blockbuster and Netflix had investor events this week, so there has been an obvious compare-and-contrast thread going through the news coverage.

One gets the impression Blockbuster is jumping the shark with plans afoot to buy an ailing Circuit City and to setup up a kiosk model of downloading content for portable video players. Why a content distribution company wants to buy a Big Box consumer electronics outlet kind of boggles the mind at first glance, but I suppose you could argue that it's a razors (videos/games) and blades (TVs/PCs/game consoles) strategy writ large. Not so much for the idea someone is going to run down to the local Blockbuster store with their portable device and load up some content; I guess they missed the memo about Netflix breaking that mold.

Netflix, on the other hand, has gone out and put some stakes in the ground on the future of their business. The DVD mail biz is expected to peak in five years, but the transition to streaming has already begun. Executives think they're going to be up to 10 million subscribers (up from 8) by next year and have up to 20 million subscribers in five years, an interesting statistic that should send shivers through the hearts of Blockbuster, the phone companies, and the cable companies for lots of different reasons. You don't hear Netflix on a net neutrality soap box, so they're likely quietly cutting behind-the-scenes deals to ensure their TV streaming boxes work as advertised. If Netflix is successful, it's likely going to put a damper in someone's happy-go-streaming/VOD plans. -- Doug

Netflix: 20 Million Future Streaming Customers, DVD Peaking

Doug Mohney — Thu, 29 May 2008 16:26:31 -0400

Netflix executives are bullish on online streaming as the future of the company, as they predict by-mail DVD rental to peak sometime in the next five to 10 years.

If successful, Netflix expects it can attract "well beyond 20 million" subscribers worldwide. Currently, the company has 8 million subscribers and expects to bring that up to 10 million subs by next year. The company's key challenge is to grow earnings per share and subscribers while increasing online video customers. It expects to have to make some upfront "fairly inefficient" investments in 2008 and 2009.

Netflix launched a direct-to-TV streaming set-top box with Roku and is expected to announce other streaming partnerships in the future; Wall Street is predicting one of the partners could be Microsoft.

Competition for Netflix ranges from improving video-on-demand services from cable and satellite companies to downloads from Apple iTunes and Amazon.com jumping into the instant-satisfaction streaming video business.

For more:
- View the Netflix Investor Day webcast
- News.com blogs about Netflix predicting the death of the DVD

Related articles:
Netflix and LG go for video on demand
Netflix Streams Past the Mailbox & PC
ALSO NOTED: Netflix drops video limits

A Little Stream From Amazon

Doug Mohney — Thu, 29 May 2008 11:53:39 -0400

Jeff Bezos let slip that Amazon.com will launch a streaming video service in the next few weeks, but gave no details.

Speaking at a Walt Mossberg-hosted conference, Bezos spent more time talking about Amazon's Kindle electronic book reader than about its new offerings. Spokespeople at Amazon.com aren't saying anything.

Amazon has been beefing up its digital media offerings, building a digital download store for music, movies, TV shows, and videos. The company also has cut a deal with TiVo to allow users to rent videos from Amazon's Unbox service.

How streaming will fit in with the Unbox download service is an interesting question, since Unbox already allows for movie rentals and purchases. Bezos says it will be an a la carte, instant-on, no waiting for viewing service, but will this be enough to attract enough customers away from a downloadable format that takes longer, but is more convenient for viewing?

Last week, Netflix unveiled its set-top box for live streaming to the home TV set, so Amazon won't have a free ride in trying to secure market share.

For more:
- ZD blogs Amazon preps pay-per-view movie service

Related articles:
Netflix Streams Past the Mailbox & PC
iTunes Wins Equality with DVD Releases

Netflix Streams Past the Mailbox & PC

Doug Mohney — Thu, 22 May 2008 10:57:50 -0400

Netflix has teamed up with Roku to offer a solution that bypasses red mailing envelopes and PC downloads, instead providing a box to stream movies directly from the Internet onto a TV.

The Netflix Player by Roku is priced at $99.99 and gives Netflix members instant access to more than 10,000 movies and TV episodes. A member can choose movies from their queue and have them automatically displayed on the TV screen. There are no extra charges or viewing restrictions, so Netflix members can watch as much as they want--subject to whatever limitations their broadband provider may have--without paying more or having to count the number of DVDs they have viewed during the month.

About the size of a paperback book, the Roku Netflix Player supports both Ethernet and WiFi (802.11 b/g) connectivity and HDMI for the HDTV crowd. It also provides the functionality to rate movies and allows for fast-forwarding and rewinding the video stream.

Analysts are interested to see how an all-you-can eat viewing experience may impact Netflix's bottom line. Infrastructure to support real-time streaming isn't free, but Netflix is bundling in the option as a value-add to a subscriber's membership. On the other hand, not having to print and manage tens of thousands of DVDs would definitely lighten operational costs.

For more:
- Netflix announces the Roku Streaming Box

Related articles:
Netflix and LG go for video on demand
ALSO NOTED: Netflix drops video limits