Netflix shoots itself in the foot... aka no more free streaming

[Robert Maxwell]

gh4chiefs wrote:

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Why do you think that is? Is it really that unprofitable? Or is streaming just that much more lucrative?

The DVD service has overhead costs that the streaming service doesn't: the envelopes, postage, the DVDs themselves, replacement expenses when the DVD is too scratched to keep sending, etc. Those things all require manpower, too, since it involves handling physical media.

Contrast that with streaming, where your major expenses are:

1. Datacenters
2. Bandwidth
3. Licensing costs

Those items--particularly 1 and 2--are easier to estimate and you can scale them based on your number of subscribers, so capital investment keeps pace with revenue increases.

The licensing costs are where Netflix is liable to get fucked in the foreseeable future, which may be why they're going to focus on streaming, so they can dominate that market and have a better bargaining position with the studios.

Problem is, Netflix is just a middleman, so what's to stop the studios from colluding to create their own streaming service, or multiple competing services, and leaving Netflix out in the cold? The loss of Starz is not that big a deal by itself, but if it spurs other companies to abandon Netflix then Netflix is going to be in for a world of hurt.

[gh4chiefs]

Robert Maxwell wrote:

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The licensing costs are where Netflix is liable to get fucked in the foreseeable future, . . .

Yeah from what I read on news sources, apparently the studios are demanding really large licensing fee increases beause they're figuring out that if everybody is streaming their content, no one is buying dvds/blu-rays.

I understand the physical costs of the DVD service are high compared to streaming, but one has to wonder if in the end, the ROI is really going to be that much better for the streaming business.

[Flying Spaghetti Monster]

I only have streaming right now. Honestly, having all the Trek shows was a big incentive, and the episodes look great.
Can't wait for Deep Space Nine.

My problem with streaming is that I never know what aspect ratio it will be. Even on widescreen streams, I'm not sure that it is "correct" as much of it looks too cramped, to stretched or too severe. Sometimes the video quality is awful... as in Hunt for Red October.

[Robert Maxwell]

gh4chiefs wrote:

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Yeah from what I read on news sources, apparently the studios are demanding really large licensing fee increases beause they're figuring out that if everybody is streaming their content, no one is buying dvds/blu-rays.

I understand the physical costs of the DVD service are high compared to streaming, but one has to wonder if in the end, the ROI is really going to be that much better for the streaming business.

I think Netflix knows that streaming is the future, and they want to be the first to corner that market. The fact is, DVD sales are down, and while Blu-ray sales continue to rise, they aren't making up for the decline in DVD sales. Demand for physical media continues to fall and Netflix is not ignorant of that trend.

[Captain Craig]

Professor Zoom wrote:

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I was actually fine with the raise in price. I was going to keep both the streaming (which I really like... lots of shows, documentaries and movies) and the 1 disc at a time. 15 bucks. good deal.

However, it's this splitting up into 2 websites that I think it is obnoxious. "Let's turn something that was convenient and actually a deal into something LESS convenient. They'll LOVE US!" that's what I don't get.

Same here. I was fine with it, as it was still a reasonable value imo. This splitting it up though is what irks me.
It's like someone said, "Hey, you know what we didn't piss off nearly enough people with just the price hike so....are you ready boss? Lets split the company into two parts!!!"

I don't know if all this juggling is the reason or if the connections reset but went to view a streaming movie last night and my connection had been severed. Don't know if Netflix themselves hit a massive reset button or if my BluRays connection glitched. Anyone else encounter this? If not it was likely just my system and only a coincidence with everthything else going on.

[gh4chiefs]

Robert Maxwell wrote:

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I think Netflix knows that streaming is the future, and they want to be the first to corner that market. The fact is, DVD sales are down, and while Blu-ray sales continue to rise, they aren't making up for the decline in DVD sales. Demand for physical media continues to fall and Netflix is not ignorant of that trend.

I would venture to say that Netflix is in a large part responsible for that decline, coupled of course with the godawful economy. I'm sure I'm not the only one that scaled backed their DVD purchasing because of Netflix.

I still say streaming is going to run afoul of the move by ISPs to cap bandwidth at some point and then where will the "streamers" be?

[TemporalFlux]

I really don't understand the appeal of streaming on Netflix? I've tried watching some of their content; it looks like low res crap, and it's constantly jerking and stopping as it needs time to load. I've got AT&T DSL (highest speed offered), so I don't think that's the problem. I've also tried watching on my iPad using Wi-Fi outside of my home and 3G; same low res junk that jerks and stops. I even tried my iPhone thinking about the old convention that smaller screens improve resolution; it still looks like low res crap and doesn't load.

I've watched streaming on other sites like Hulu; it looks good there and works very well on loading (I don't remember Hulu ever jerking or stopping).

gh4chiefs wrote:

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I still say streaming is going to run afoul of the move by ISPs to cap bandwidth at some point and then where will the "streamers" be?

This is the other big problem out there. For instance, AT&T caps at 2 GB on iPad 3G for $25.00; and that seems to only give me four to five hours of streaming capability a month. Given that I'm not around WiFi for significant amounts of time, this a BIG problem for me with streaming. If it were decent quality, I could end up watching as much as 30 hours of streaming over 3G each month, and there's no way I want to pay AT&T $175 a month for that.

Anyway, I had stayed with Netflix for just the DVD / Bluray service mostly because I've rated close to 5,000 movies, and the suggestions system is pretty good for me as a result. I guess now that I'll start looking at something else because "Qwikster" is obviously set up to fail, but the options are probably going to be relegated to RedBox given that Blockbuster is on its last legs.

[J. Allen]

TemporalFlux wrote:

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I really don't understand the appeal of streaming on Netflix? I've tried watching some of their content; it looks like low res crap, and it's constantly jerking and stopping as it needs time to load. I've got AT&T DSL (highest speed offered), so I don't think that's the problem. I've also tried watching on my iPad using Wi-Fi outside of my home and 3G; same low res junk that jerks and stops. I even tried my iPhone thinking about the old convention that smaller screens improve resolution; it still looks like low res crap and doesn't load.

I've watched streaming on other sites like Hulu; it looks good there and works very well on loading (I don't remember Hulu ever jerking or stopping).

This is the other big problem out there. For instance, AT&T caps at 2 GB on iPad 3G for $25.00; and that seems to only give me four to five hours of streaming capability a month. Given that I'm not around WiFi for significant amounts of time, this a BIG problem for me with streaming. If it were decent quality, I could end up watching as much as 30 hours of streaming over 3G each month, and there's no way I want to pay AT&T $175 a month for that.

Anyway, I had stayed with Netflix for just the DVD / Bluray service mostly because I've rated close to 5,000 movies, and the suggestions system is pretty good for me as a result. I guess now that I'll start looking at something else because "Qwikster" is obviously set up to fail, but the options are probably going to be relegated to RedBox given that Blockbuster is on its last legs.

It may be your area's CO. It may be equipment, it could be anything, but it's probably not Netflix. I watch HD movies that look almost as good as blu-ray, without a single instance of stopping and starting. I have Roadrunner now, but when I had AT&T DSL, I could still do the same thing.

[Robert Maxwell]

Yeah, I have no problems watching Netflix stuff in HD, but then I have a new computer and Verizon FiOS.

[Skywalker]

I have Roadrunner and I usually don't have a problem streaming Netflix in HD, either. Occasionally it'll drop, but not very often.

[Snaploud]

TemporalFlux wrote:

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I really don't understand the appeal of streaming on Netflix? I've tried watching some of their content; it looks like low res crap, and it's constantly jerking and stopping as it needs time to load. I've got AT&T DSL (highest speed offered), so I don't think that's the problem. I've also tried watching on my iPad using Wi-Fi outside of my home and 3G; same low res junk that jerks and stops. I even tried my iPhone thinking about the old convention that smaller screens improve resolution; it still looks like low res crap and doesn't load.

I've watched streaming on other sites like Hulu; it looks good there and works very well on loading (I don't remember Hulu ever jerking or stopping).

My Netflix picture has always been crisp, and I've never experienced any jerking or stopping. I use Netflix on two laptops and a 32 inch tube tv (with Comcast high-speed internet).

[TemporalFlux]

J. Allen wrote:

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It may be your area's CO. It may be equipment, it could be anything, but it's probably not Netflix. I watch HD movies that look almost as good as blu-ray, without a single instance of stopping and starting. I have Roadrunner now, but when I had AT&T DSL, I could still do the same thing.

I would agree except for stuff like Hulu actually working. In any case, Netflix streaming is pretty worthless to me; and I'm sure I'm not alone. I guess the main point I'm trying to make is that the cheers for streaming do not compromise the entire world's population; hell, there are places in the U.S. that still don't even have the basic infrastructure for high speed internet (and satellite only goes as long as you don't have trees blocking the signal).

[TemporalFlux]

Robert Maxwell wrote:

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Yeah, I have no problems watching Netflix stuff in HD, but then I have a new computer and Verizon FiOS.

Enh. I've got an Acer Aspire 8930G. It's a few years old, but it's no slouch.

[J. Allen]

Robert Maxwell wrote:

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Yeah, I have no problems watching Netflix stuff in HD, but then I have a new computer and Verizon FiOS.

Is it wrong that I sometimes hug my cable modem?

TemporalFlux wrote:

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I would agree except for stuff like Hulu actually working. In any case, Netflix streaming is pretty worthless to me; and I'm sure I'm not alone. The only point I'm trying to make is that the cheers for streaming do not compromise the entire world's population; hell, there are places in the U.S. that still don't even have the basic infrastructure for high speed internet (and satellite only goes as long as you don't have trees blocking the signal).

Hulu runs at a much lower resolution than Netflix. Even Hulu's HD broadcasts are inferior to Netflix's standard resolution. It also depends upon what equipment you use. There is a small but important difference if you use devices. I use a Roku box for my Netflix streaming, which has a different API than the PC, which has a different API than the XBOX 360 and so on.

If you're having trouble on all of your devices, then it's likely your provider isn't giving you enough throughput to keep a stable, higher end connection. That would likely be with the CO. Again, my netbook gives me DVD quality resolution, my PC gives me HD resolutions, my Roku box gives me HD resolutions, without a single hiccup (well, 99% of the time), and maybe an 8 second pre-buffer.

In regard to the cheers for streaming, no one here is saying that it comprises the world's population. It is true, though, that streaming is the future, and while physical media may have it's place in the future as well, it's role will be severely diminished.

[Professor Zoom]

TemporalFlux wrote:

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I really don't understand the appeal of streaming on Netflix? I've tried watching some of their content; it looks like low res crap, and it's constantly jerking and stopping as it needs time to load. I've got AT&T DSL (highest speed offered), so I don't think that's the problem. I've also tried watching on my iPad using Wi-Fi outside of my home and 3G; same low res junk that jerks and stops. I even tried my iPhone thinking about the old convention that smaller screens improve resolution; it still looks like low res crap and doesn't load.

Weird. I stream to my TV, through my bluray. It's a wireless signal, with the router in another room, and I RARELY have a problem. Image is always good. The occasional rebuffer, like 5 times in a year, but, I love it. Tons of documentaries, BBC shows, older movies, foreign movies.

I'll give up the discs before I give up streaming.