There was a time when it seemed that Netflix could do no wrong in its home market of the United States.
Widely considered one of the top internet companies, its stock was an analyst favorite and it had the price to prove it.
Then Netflix CEO Reed Hastings messed it all up by trying to push the company to where he thought it needed to go faster than the market was ready to move.
Netflix has announced that its members have streamed 2bn hours of
TV shows and movies in Q4 2011.
With more than 20m global users, this equates to roughly
10 hours of content per person.
Netflix hit the headlines in October last year after losing
800,000 subscribers in the US following the decision to split its postal and
online streaming services, so the announcement is good news as it gears up for
expansion into the UK and Ireland in Q1 this year.
Much-loved TV show Arrested Development is to release new episodes of the sitcom exclusively via Netflix in early 2013.
The online TV and film streaming service has signed a deal with Fox and Imagine Television that will see episodes developed especially for subscribers in the US.
Yesterday, Netflix announced that its aggressive international expansion plans will bring its internet movie and television streaming service to the U.K. and Ireland in early 2012.
The announcement should have been a bright spot for a company which has been flying high for the past several years. But it was overshadowed by a bout of bad news: last quarter, Netflix lost 800,000 subscribers in the U.S.
As we've seen time and time again, even the highest-flying companies can be thrust into crisis and controversy in an instant for a variety of reasons.
For BP, it was a massive oil spill. For AirBnB, it was an ugly incident involving theft and vandalism.
And for Netflix, which is in the midst of a crisis today, the cause of its problems was a decision to change its business model.
It can't be a fun week to be a marketer at Netflix. A year ago Netflix seemed unassailable.
Now its fate may be in the hands of the very Hollywood studios it bested and a 'pot-smoking guy' who owns its new brand on Twitter.
With a market cap of over $15bn and a share price of $290, Netflix is one of the internet's highest flying stars. But changes the company is making to its pricing could have it crashing back down to earth.
Yesterday, the company announced that it is offering two separate plans going forward: one for unlimited DVDs by mail, which costs $7.99/month, and one for streaming, which also costs $7.99/month. Currently, Netflix customers can receive both unlimited DVDs and streaming for only $9.99/month.
Not surprisingly, a 60% price increase has sparked an online fury, with angry Netflix customers threatening to drop their Netflix subscriptions.
Netflix is fast becoming the king of digital movies, and is one of Hollywood's biggest
frenemies. But even though Netflix would appear to be sitting pretty, it
may have some stiff competition soon.
The source: Facebook.
Online video may have a long way to go before it dethrones the
television in the United States, but its rapid rise shows no signs of
According to Nielsen, home and work online video usage rose a whopping
45% in January 2011 as compared to January 2010. Perhaps the most
impressive fact: this growth isn't being driven by new users. The number
of unique viewers only increased by slightly more than 3%, meaning that
those who are already consuming video online are consuming more of it.
The more ads, the better. That seems to be the strategy for boosting online
ad revenue for publishers of all kinds. First, the Online Publishers
Association (OPA) decided that making ads bigger and bolder was one way
to help boost publishers’ dwindling CPMs. Now, the TV networks are
concluding that loading their online video shows with more ads is the
best way to increase digital revenue.
It seems to fly in the face of common sense – after all, consumers have
flocked to DVR because they can skip all of the ads hurled at them on
broadcast TV or cable. Meanwhile, with shorter attention spans on the
web, won’t more ads just make online viewers tune out? Research from the
networks says no.