Years Of Pretending Netflix Cord Cutting Wasn't Real Is Biting The Cable Industry In The Ass

from the monsters-don't-go-away-when-you-ignore-them dept

If you didn't know, Netflix is kind of huge. So huge, in fact, that some new analysis suggests that if Netflix was a Nielsen-rated TV network, the service would, sometime within a year, attain a larger 24-hour audience than ABC, CBS, NBC or Fox. That's something Nielsen itself should probably be tracking, but as we've noted previously, Nielsen has painfully lagged on actually tracking the cord cutting revolution, for fear of upsetting cable and broadcast executives with their heads planted squarely in the sand.

The analysts at FBR Capital Markets note that Netflix served 10 billion hours of internet video content in the first quarter of the year, roughly two hours per subscriber per day. By dividing this two-hour figure by 24 hours, then multiplying it by the number of U.S. Netflix subscribers as a percentage of households, the analysts estimate Netflix would see a Q1 ratings score of 2.6, on par with both ABC and NBC. The difference, of course, is that Netflix is growing quickly while traditional cable broadcasters are losing market share, especially on the kids programming front.

Of course, the fact that Nielsen can't join the modern era and track TV viewing over the internet suggests this isn't quite yet an apples-to-apples comparison:

"One major caveat: Nielsen TV ratings cover, at most, up to seven days of VOD and DVR viewing — and exclude online-video views, which networks say are an increasing part of the pie. Moreover, TV networks provide a different blend of content, such as live sports, that Netflix doesn’t. And anyway, Netflix doesn’t care about “ratings” of individual shows, given that it doesn’t sell ads and has steadfastly refused to disclose anything but general data about viewing."

Except Variety may overstate this, since the cable industry's "TV Everywhere" initiative (which lets users watch cable content on their iPads and other devices in the hopes of keeping them from cutting the cord) is a bit of a dud. Cable video on demand viewing has been in the toilet for some time as well. And while sports is where cable still outshines internet video (for now), the cable and broadcast apparatus isn't helping its case by failing to improve customer service, yet relentlessly driving up rates in the face of this increased competition. As such, people generally like Netflix's value proposition more:

"Another data point called out by FBR’s analysts: When consumers were asked if they had to choose between Netflix and a cable or satellite TV subscription, 57% picked Netflix, with 43% opting for pay TV, according to a survey FBR conducted with ClearVoice Research in April. "Netflix subscribers clearly like it more than pay TV, which we see as arguing for pricing leverage, since pay TV, on average, costs over $80 per month,” the analysts wrote, citing Netflix’s average $8 price point."

And things are going to get worse. Netflix is already leading the charge toward 4K and HDR content, something the cable industry (and especially the telcos using fiber to the node or DSL) won't have the bandwidth to deliver for years. And while the cable industry loses subscribers slowly to cord cutting, Netflix is busy growing internationally, with plans to offer service in 200 different countries by the end of this year. Apparently, burying your head in the sand and pretending cord cutting wasn't real didn't magically stop the future from arriving anyway. Who knew?

Filed Under: cord cutting, internet, internet video, measurement, video on demand
Companies: netflix, nielsen

Universal Backs Away From Planned $60 VOD Release Of Tower Heist

from the joke-wasn't-funny dept

It was barely a week ago when we reported that Universal was planning to test a $60 Video On Demand release of Tower Heist only 3 weeks after the theatrical release of the film. In that report, we noted that theater owners were threatening to boycott the film if Universal went ahead with its plans. We now learn that Universal has given into the demands of theater owners and will be putting off its early VOD release of this film. This is not all too surprising as Universal would not want to damage its relationships with theater owners. However, Universal still plans to go forward in the future with this plan as soon as it finds a mutually beneficial deal with theater owners. Nowhere, however, is there any indication that Universal is seeking a plan that is mutually beneficial to consumers.

Filed Under: $60, movie windows, theaters, tower heist, video on demand, vod
Companies: comcast, nbc universal

No One Wanted To Pay $30 For In-Home Movie Rentals... So Now Universal Will Try $60?

from the is-this-a-joke? dept

There are times when I wonder just what various entertainment industry execs are thinking (or drinking or smoking, as the case may be). Back in April we laughed at the idea that people would be interested in paying $30 for video on demand for a movie, just because they could get it a little bit before it came out on DVD. The $30 price point was just too high. And, of course, it didn't take long for the news to come out that... $30 was just too high and almost no one bought.

So what do you do if that plan fails? Well, if you're smart, you look at more reasonable price points. If you're not... you raise the price. Yes, that's right. Universal, with the assistance of parent company Comcast, is now going to test the preposterous $60 video on demand offering. The reason for the jacked up price? Because it'll come out on VOD three weeks after being released in the theaters -- at which point the film will still be in the theaters. The test is also going to be done on what the studio hopes is going to be a blockbuster: Tower Heist, starring Eddie Murphy, Ben Stiller and Matthew Broderick.

Here's what's wrong with this: the studio is thinking about this from the studio's perspective and not the consumer's perspective (at all). Of course, this is NBC Universal we're talking about, so that's not particularly shocking. In the studio world, release "windows" are everything. And each later release window is less and less of a big deal. So it's totally natural to them to think "gee, if we move up the release window, that's more valuable, so let's jack up the price." But a consumer isn't thinking about release windows. A consumer is thinking "I want to watch a movie. I could go out to the theater, or I could watch it at home." And then they look at the option at home... and if they can, say, watch a film at no additional cost from Netflix... or if they can grab a movie at Redbox for $1... and they compare that to $60 for video on demand, who's actually going to do that? The pricing is insanity.

Even funnier, however, was watching how the theaters totally freaked out over the original $30 plan, as they do with any plan to shrink the precious "window" between the theatrical release and any other kind of release. This is because theater owners don't know what business they're in. They think that they're in the content business, when they're really in the business of selling their seats. The fact that theater owners thought they couldn't compete with an insane $30 rental suggests that they don't know how to provide a good experience.

And, of course, now that there's an even more ridiculous $60 price point, you would think that the theater folks would chuckle and say "hey, we can compete with that, no problem." But it appears theater owners may be even more unable to comprehend the mind of the consumer than the execs at NBC Universal. Thus, Cinemark is already warning that it will boycott the movie if Universal goes forward with this plan.

In the meantime, it's also worth noting that the theaters convinced a bunch of big name Hollywood directors to sign an open letter to the studios protesting these kinds of "early" VOD releases. One of the names on that letter, by the way? Brett Ratner. The director of Tower Heist. Embarrassing... He is, of course, trying to distance himself from this trial, noting that he wasn't informed of it until the day before it was announced and had nothing to do with it. Of course, that's part of what happens when you do a deal like this. The studio owns the project, and they can do whatever they want with it.

Either way, don't expect too many people to pay up for this experiment. It almost makes you wonder if the idea is to make it fail on purpose.

Filed Under: $30, $60, movies, studios, video on demand
Companies: cinemark, comcast, nbc universal

DirecTV Admits Almost No One Wants To Pay $30 To Watch A Movie At Home

from the pricing,-duh dept

Back in April, when DirecTV officially announced its plan to let people see movies for $30 at home, we were not alone in suggesting the price was ridiculously high, and were somewhat shocked to see theaters complaining that they'd never be able to compete. Looks like our thoughts on the price turned out to be exactly right. As a few people have sent in, DirecTV has admitted that there's been very little uptake of the $30 movies, and flat out admits that the price is too high:

The service is part of an attempt by studios to harness pay-TV as they seek new ways to sell movies and counter shrinking DVD sales. Few customers will purchase the premium rentals unless the quality of the movies improves and the price comes down, White said in an interview.

�They�re priced too high for consumers,� White said. �We didn�t choose that price, but that�s where the studios forced us to be.�

Of course, the studios forced that price because they're petrified of pissing off the theater owners (who were already pissed off), because the big studios still think that the "movie business" is defined solely and completely by how well a film does in the theaters on its opening weekend. The theater owners, at the same time, don't want to have to compete and actually improve the quality of their service -- so they whine and complain any time the studios do anything to make accessing content outside of the theaters any easier.

The end result, then, is just a big question of why anyone bothered at all with this plan. It made no sense for anyone involved. If you're going to offer video on demand to consumers, offer them a reasonable product at a reasonable price or don't bother.

Filed Under: $30, movies, studios, video on demand
Companies: directv

Big Hollywood Directors Seem To Think People Will Actually Pay $30 To Watch Movies At Home

from the reality-calling... dept

We still can't figure out why anyone is "worried" about Hollywood's silly plan to offer $30 video-on-demand rentals 10 weeks after films are in the theaters. Yet, theater owners who are effectively admitting that their service sucks are all complaining and now a bunch of big Hollywood directors are joining them. James Cameron, Peter Jackson, Robert Zemeckis, Michael Mann, Kathryn Bigelow and many others have apparently written a letter to the studios protesting the plan. Do they not yet realize that very few people are likely to pay $30 to watch these movies? And their basic argument doesn't make any sense: they say this is a threat to theaters (it's not) and that this will harm the movie industry as a whole (it won't).

And, as stupid as $30 movies at home are, what this really foreshadows is the ridiculous levels to which the industry will go to block the real innovation that the industry needs: day and date release on all formats on the same day. If they're so scared of massively overpriced video at home ten weeks after the theater debut, you can bet they'll go absolutely ballistic when anyone tries to release video on demand and in the theater at the same time.

It seems that, once again, we have people focusing on the "tradition" of the way things were done, rather than actually providing what consumers want. How many times does this need to happen before industry folks realize this doesn't work?

Filed Under: directors, james cameron, kathryn bigelow, michael mann, movies, peter jackson, robert zemeckis, video on demand

Cablevision Will Let You Watch Movies The Day Of Their Release, If You Buy The DVD

from the loopholes dept

We were surprised that even Apple was forced by the movie industry to delay the release of online movie downloads until a month after the DVD release. This seemed totally pointless and self-defeating by the movie industry (though, hardly the first time that's happened). However, it looks like Cablevision has discovered an interesting workaround to this "window" between releases: it's launching a video-on-demand (VOD) system that will let you watch movies the day they're released on DVD. The trick? You need to actually buy the DVD first, via Cablevision. Then, while you're waiting for the physical DVD to arrive in the mail, you're free to watch the movie via the VOD offering. Of course, this sounds something like what the original MP3.com used to do, allowing people to access MP3s of CDs they just bought, while they wait for the CD to arrive. And, as I'm sure many of you remember, the entertainment industry sued MP3.com and actually won that lawsuit. While there was some questionable reasoning in the decision, MP3.com was unable to appeal, due to some quirks of the legal system. Has it really taken 8-years for the entertainment industry to start to come around to this idea? Perhaps not. Apparently, only a very few titles are available on Cablevision's new service.

Filed Under: dvds, video on demand
Companies: cablevision