On the rising problem of “disappearing content” from online video sites

December 11, 2008

Gotta give some props to Greg Sandoval (pictured at left) at CNET News who did a great piece this week on the seemingly random removal of content from Netflix and iTunes. (see TV has license to kill movies at iTunes, Netflix | Digital Media – CNET News).

If you’ve been reading my posts lately, you know that “disappearing content” is par for the course. One of my most read posts in the history of this blog is my piece on Why CBS Pulled The Mentalist From CBS.com. I also briefly covered how Sony Pictures apparently pulled certain of its films from Netflix only when viewed through the Xbox 360 (you can still watch them elsewhere). 

I know it’s easy to start throwing snowballs at these guys for not understanding the power of the online channel. I have a few of those snowballs in my arsenal as well. But I have to confess, I consider these stops and starts a good sign.

What? That’s right, this is a good sign. Because if the corporate heavies had their way, none of these movies or TV shows would be available on Netflix, iTunes, CBS.com, the Xbox 360 (you get the picture) in the first place. The fact that they threw too much up there, then realized they didn’t quite have full permission to do so and have had to retrench is a sign that they’re experimenting. Importantly, the fact that they only pulled a few and didn’t just rip the whole thing down is also a good sign. Remember, danger lurks in darkness of media executives’ souls. They’d rather not do the right thing. But the dynamics of the market are forcing them to. Huzzah for us. 

Let them have their fits and starts, let them figure it out as they go along, as long as they keep moving forward.

Agree? Disagree? Feel free to weigh in.


Did Sony block its movies from Netflix’s Xbox 360 player?

November 19, 2008

Interesting little fight brewing in the obscure world of online movie streaming. It seems that when Netflix agreed to send its streaming movies to the Xbox 360, at least one of Sony’s movie studios (Columbia Pictures, according to this Engadget report) took issue with that. 

Whether this was malicious on the part of Columbia Pictures is open for debate. If this were a Sony strategy, it would be likely that all Sony Pictures Home Entertainment content would drop out as well, but it hasn’t. Official word from Netflix suggests that this is normal in the course of licensing content — the original licenses probably didn’t include specification of all the possible outputs for Netflix. It’s reasonable to assume that there’s some renegotiation likely to occur.

Whether this was something Sony did on purpose or whether it was a coincidence (the timing is suspect because today was the launch of the new user interface for the Xbox 360, including prominent display of the Netflix streaming option), I don’t think this will stick. For two reasons.

  1. The public sentiment is already turning sour against Sony. Without evidence that Sony was acting out of malice, the gamer/movie viewer community is already moaning and complaining loudly. Just read any blog comments on this topic to find plenty of Sony vitriol to go around. It’s almost as bad as the political season we just went through.
  2. Sony doesn’t really work like that. It would be very unusual for Sony’s video game unit to be able to exert such specific pressure of a subsidiary of the Sony Picutres side of the house. I won’t offer specifics here, but suffice it to say that Sony is not ruled by one point of view. It’s a house of many different views and I find it unlikely that this would be part of a master conspiracy to punish people for having an Xbox 360. Think of it this way: Sony doesn’t prevent you from watching Sony DVDs on Samsung DVD players, right?

Maybe I’m just a nice guy. Do you think I’m wrong? Is this a nefarious plot? Or just awful timing for a rights negotiation to come up?


As Netflix rises, Roku drafts nicely behind

November 3, 2008

Every time I turn around, it seems Netflix is announcing something new. These past few weeks my little fingers have typed furiously to keep up with Netflix, which I will now refer as the company formerly known as the DVD-by-mail company. Two weeks ago, I wrote about Samsung adding Netflix to some of its Blu-ray players. Then there was the announcement that Netflix had finally enabled streaming on the Mac (okay, okay, Intel-based Macs, but still). Then there was the revelation that said company would provide HD streaming on the Xbox 360 and other devices. Finally, I posted just last Thursday that Netflix was partnering with TiVo to expand its streaming to yet another device. (Convenience note: you can mouseover these links to see the text of the page without actually clicking on them)

Just remembering typing it all inflames my carpal tunnel. Now that I’ve had some time to think this through, I’m still impressed with Netflix. But wait a minute. In all this, there’s one definite winner behind all the announcements: Roku.

btw, this is not an ad, this is just the most attractive picture I found on the website: I don't get paid anything if you click on this and order

Yes, I’m talking about the maker of the $99 streaming video box that in my back-of-the-envelope estimations has probably sold more than 50,000 units in the six months since its launch. This is the box that I proclaimed the winner in the over-the-top set-top-box shootout I wrote in July. But secretly, after writing that report, I started to fear for the box’s survival in a world where Netflix is off enabling every other device you’re thinking of buying this holiday season.

Then the recession hit. Follow my logic here: you hear that Microsoft Xbox 360 Live members can stream Netflix to their TV sets. That sounds cool enough to try, you are one of nearly 9 million Netflix subscribers aftera ll, but then you add up the additional costs — $199 for the low-end Xbox 360 Arcade plus a $7.99 a month subscription. Add that up for a year and you have $295. (Of course, the plan from Microsoft is that you already own an Xbox and this motivates you to sign up for the Xbox 360 Live Gold Membership, but just humor me.)

So you then hear that select Blu-ray players from Samsung and LG now allow for Netflix streaming. You were considering a Blu-ray player anyway, so you look into these and find they retail for $349 to $399. Then you hear that TiVo will offer Netflix, but you have to get the $299 TiVo HD at a minimum, not to mention the monthly service charges. You’re starting to feel daunted, so you go to Netflix.com and see all these options on one page so you can figure out which one is best for you.

You find the Netflix Ready Devices page, which shows you all of these options, and what do you see? Roku listed at the top, at a nice $99 price. Oh, and by the way, it’s the only one that comes with built-in wireless connectivity for those who don’t have ethernet in the living room. Especially in a recession, the Roku seems like a low-risk option.

I shared this line of logic with Tim Twerdahl, VP of Consumer Products at Roku, an ex-Netflix guy on Friday. I could practically hear the smile on his face over the phone as he agreed with my logic. Then he confirmed it: “Our sales are up dramatically in October.” And that in a recession.

Of course, the point of all the other boxes is that they do other things, not just Netflix. The Xbox does games, TiVo does DVR, the other guys do Blu-ray. When I shared this concern with Tim, he responded very confidently that I should stay tuned. What I have long been calling the Netflix/Roku box will soon shrug off the Netflix moniker by adding other premium content. This will only drive up sales on this box even more. Soon it will outsell the Roku Soundbridge home audio device that never really got past 100,000 users in four years of selling. There’s a business in this box; Roku is here to stay.


It appears Netflix streaming will go HD with Xbox 360

October 29, 2008

The details are still coming together, but while I was busy at the Forrester Consumer Forum, this little tidbit came out, as trumpeted by Gigaom via the New York Times

Yes, I knew that the new UI for the Xbox 360, due out in late November, was going to feature Netflix streaming. That wasn’t news. But the interesting bit is that apparently, there will be HD movies as part of the deal. Reactions are quite positive so far, from the tweets I’m reading on Twitter. UPDATE: It appears Netflix has plans to roll this out to all its non-PC streaming platforms, not just Xbox 360 — read this post at CNET for details, including the high bandwidth requirements.

And I have to say that while this is a good move, and a relatively easy move, it’s more of a symbolic victory than anything else. For Netflix, the symbolic victory comes in being able to say it will be streaming HD quality movies to the TV not the PC (Hulu.com already streams hundreds of movies to the PC), something that cable companies charge much more for. For the Xbox 360, it will finally elevate the device’s chances of breaking through as a gaming machine to a home entertainment machine. When you add up how many people have watched video on the Xbox 360 — Microsoft says its about 30% of it’s 14 million Windows live customers, or more than 4 million people — that makes it more important than TiVo or the Apple TV in terms of the number of people it’s reaching, as I’ve said before. So going this next step makes sense.

But the move won’t push either company into new revenue or subscriber growth mode. Instead, it will confirm existing subscribers and remind them why they have already signed up in the first place. That’s always a worthwhile goal, especially in a recession, but a modest one.

It’s the long-term effect I’m interested in and I suspect that’s what Netflix is positioning for. Today, when you want to watch a movie, what are your top 5 choices? How different will that list be in two years? Maybe the better way to ask it is, where did you get the last 5 movies you watched? For me, without straining too hard to recall, it’s probably:

  1. Hulu.com streaming (watched bits of John Carpenter’s The Thing just yesterday while eating room service)
  2. Netflix by mail
  3. DVD rental from Hollywood video (it’s like, 2 mins away)
  4. Netflix streaming to Roku box
  5. Little bits of a movie my daughter was watching on ABC Family.

Here’s what’s not on my list even though I have these options: Apple TV, Xbox 360, premium movie channels, or cable VOD. What’s your five? Go on, surprise me:


Netflix finally includes Macs in its streaming plans

October 27, 2008

The word at MacWorld is that the Netflix “instant watching” feature is being upgraded to support Firefox as well as Intel-based Macs. This is something the Netflix blog brought up early on as a goal. The Intel-based part means it’s not exactly Mac-friendly, but Netflix says that three-fourths of their Mac users are based on Intel machines so they’re satisfying the biggest number.

Many Mac people will be angry about this, to be sure. Netflix doesn’t seem to be apologizing, though, and is instead likely to position this as yet another in a log line of devices Netflix intends to support: LG Blu-ray players, Samsung Blu-ray players, the Roku/Netflix box, the Xbox 360, and now, the Mac.

Angry Mac fans aside, this is further evidence that the Netflix people know what they’re doing.

Device by device, Netflix is making its modest little service relatively ubiquitous. Unlike iTunes or MovieLink or anyone else, Netflix is shooting to become the base option in video devices intended for the living room. Very smart move.


Samsung adds Netflix to latest Blu-ray players

October 23, 2008

We’re witnessing the one dramatic change in the world of physical media. Now Samsung has joined LG in making Blu-ray players that also stream Netflix movies and TV shows. This Netflix strategy is the little engine that could:

  • People first said it was weak because the content was so second-string. Netflix has recently fixed that by adding Starz and some Disney movies. 
  • Some complained that a dedicated $99 box from Roku (though priced to sell), wasn’t enough to move the market. However the LG Netflix/Blu-ray player showed that there was real depth to the strategy.
  • The deal with Microsoft’s Xbox 360 to put Netflix content in the game console proved there’s a true multi-platform play there.
  • Now Samsung’s entry shows that this is going to become a big deal across multiple players in the CE and computing world.

Lessee, Netflix 4, everybody else, 1.

With Steve Jobs again this week referring to the Apple TV as a “hobby” in order to downplay previous expectations, this leaves Netflix clearly in the driver’s seat when it comes to over-the-top delivery to the TV. Maybe not in volume yet, but it will.

The biggest issue here is what this means for cable. Netflix has set its sights not on Blockbuster or even on iTunes, but on Comcast, Cox, and Time Warner. The Netflix solution pulls content automatically from your DVD rental queue, provides an easier-to-use interface than VOD, and now has as much good content as a typical VOD system, this makes cable cord-cutting that much more possible.

This Netflix move could prove to be the most important wildcard of 2008. Now if only there wasn’t a recession hanging over these Blu-ray players

Are you Netflixing your TV? Will you? Do tell.


Do you watch video on your Xbox 360 or Sony PS3?

October 21, 2008

In the recessionary spirit, I’ve been thinking through all the ways to get video to the living room and trying to decide which ones are the most economical. The Netflix/Roku box, at $99, is a solid option that performed well in my report at Forrester, but it’s only a piece of the home entertainment puzzle. 

Enter the videogame console. This is a trojan horse — in theory, these gaming systems end up in millions of homes and then one day, people wake up and find that they can also use them to watch DVDs or Blu-ray discs, and that they can download or stream video. Cool, right?

Could be, but isn’t yet. I recently spoke on a panel with the head of home video for Warner Brothers who shared research with the audience about how Blu-ray disc purchases (or attach rate if you want to be nerdy) for people with standalone Blu-ray players are twice as high as they are for PS3 owners. In other words, people with a PS3 are only half as into the Blu-ray player they have compared to other Blu-ray owners. 

The point I’m making is that videogame consoles are game machines. Period. All the other stuff has yet to catch on. Yet. What will it take to change that?

I recently sat down with Shane Kim, Corporate Vice President, Strategy for IEB at Microsoft to talk about the Xbox 360’s upcoming UI refresh, slated to hit November 19. Together with Christina DeRosa, General Manager, Xbox LIVE Marketplace, the two answered some of my questions about the future of video in the Xbox 360 world. Here’s what I learned:

  • Roughly 14 million Xbox 360 users are Xbox LIVE members, 30% of whom have downloaded or streamed video, whether for free or pay. 

That’s a good number — it means nearly 5 million people, far more than have an AppleTV or even a TiVo. My assumption, which I shared with them is that those 30% will spend no more than a third of their time and energy on video vs. gaming in Xbox live. Like good soldiers, they would neither confirm nor deny my assumption, but that means at most, 10% of content flowing over the net to the Xbox is video related.  

  • The entire online revenue for Xbox LIVE, including Xbox LIVE Marketplace, has topped $1 billion since its inception.

Apply my maximum of 10% to that $1 billion and it suggests a ceiling of $100 million in downloads and rentals sold via the Xbox 360. This is complete back-o-the-napkin modeling so don’t hold me (or them) to it. This makes Xbox the #2 digital download store next to Apple iTunes, though the Jobster has a comfortable lead if my estimate is close.

I’ve watched video on my Xbox 360, spending time with the HD version of Hunt for Red October. (A classic, btw, I always live for the moment where the Russian dialogue changes to English on the word, “Armageddon.” Powerful.) But I haven’t done so recently. (The house is in the middle of a remodel so I haven’t done the Netflix/Xbox 360 thing yet, but when I do I’ll blog about it.)

Tell me what you think: have you watched video on the Xbox 360 or on the more recently video-enabled Sony PS3? If so, what do you think? If not, why not and would you ever?