Is Netflix going to die in the next year?

[The Motor Court Company]

my point is that it is much easier to build up streaming content over time, but to have a physical network like Redbox, it is much more difficult. In other words, in the future if the online content is comparable, I don't see how people not choosing Redbox: for the same price you get 4 DVD credits per month. Plus it is easier to get new/hit releases via Redbox than waiting it to arrive in the mail.

It's going to be a while before Redbox surpasses Netflix... their streaming library is small in comparison.

 

[irvinehomeowner]

i got no idea how much that costs. my point is you dont need a middle man, understanding that the studios now bare the costs of the infrastructure, but without the middleman the services to the end consumer should (or could) be cheaper. the development/maintenance costs of the central website could be allocated amongst the studios on some sort of reasonable basis.

But there has to be a middle man even if it's just a central website with cost allocation. Someone has to manage those costs and if you want to support single sign-on rather than requiring different credentials for each studio server/website, that's where the revenue stream begins and then you also have to manage who gets a cut of what.

similar things have been done before in other industries, Orbitz was a joint venture by various airlines so you can shop for airline tickets at one place, hulu was a joint venture at one point by the studios that centralized the tv show content in one place.  i dont see why the studios couldnt do the same thing for films that they did with tv shows (hulu).

Cinematic content is a bit different because of the costs and competing services (DVD, cable, TV, Netflix). Orbitz doesn't have the same infrastructure costs as streaming movies. As for Hulu, that's a middle man concept similar to Netflix except some of the studios are partners. All content is housed on the Hulu servers and share the same UI and infrastructure. And that still is only a few of the studios and a large part of the content is licensed from studios that are not partners in Hulu.

Since you have no idea how much it costs, I can tell you that it is enormous... in the millions. It's much easier for studios to arrange licensing contracts than to bear infrastructure costs to do their own streaming. This way they make money for just providing content and don't have to worry about managing hardware, software or personnel.

This still goes back to my theater analogy, it's much easier/cheaper to sell movie reels to Regal and AMC than having to worry about building their own theater chain. Studios want to worry about making movies, not selling them directly to the consumer.

 

[irvinehomeowner]

my point is that it is much easier to build up streaming content over time, but to have a physical network like Redbox, it is much more difficult. In other words, in the future if the online content is comparable, I don't see how people not choosing Redbox: for the same price you get 4 DVD credits per month. Plus it is easier to get new/hit releases via Redbox than waiting it to arrive in the mail.

I understand what you are saying, but Netflix has such a large lead in streaming it will still be a while for Redbox to catch up, not just in size of content library but technology.

Currently, Redbox's streaming is not very good, you can go their site and read the reviews about their service. They don't have Redbox Instant apps on as many platforms (no PS3 or Wii app yet... just XBox).

I do agree that the in-person physical DVD service is an advantage, but disc based media will soon go away and so will that advantage and revenue stream.

I am a Redbox user but I don't see their Instant service as a thread to Netflix in the near future (in my opinion).

 

[qwerty]

i got no idea how much that costs. my point is you dont need a middle man, understanding that the studios now bare the costs of the infrastructure, but without the middleman the services to the end consumer should (or could) be cheaper. the development/maintenance costs of the central website could be allocated amongst the studios on some sort of reasonable basis.

But there has to be a middle man even if it's just a central website with cost allocation. Someone has to manage those costs and if you want to support single sign-on rather than requiring different credentials for each studio server/website, that's where the revenue stream begins and then you also have to manage who gets a cut of what.

similar things have been done before in other industries, Orbitz was a joint venture by various airlines so you can shop for airline tickets at one place, hulu was a joint venture at one point by the studios that centralized the tv show content in one place.  i dont see why the studios couldnt do the same thing for films that they did with tv shows (hulu).

Cinematic content is a bit different because of the costs and competing services (DVD, cable, TV, Netflix). Orbitz doesn't have the same infrastructure costs as streaming movies. As for Hulu, that's a middle man concept similar to Netflix except some of the studios are partners. All content is housed on the Hulu servers and share the same UI and infrastructure. And that still is only a few of the studios and a large part of the content is licensed from studios that are not partners in Hulu.

Since you have no idea how much it costs, I can tell you that it is enormous... in the millions. It's much easier for studios to arrange licensing contracts than to bear infrastructure costs to do their own streaming. This way they make money for just providing content and don't have to worry about managing hardware, software or personnel.

This still goes back to my theater analogy, it's much easier/cheaper to sell movie reels to Regal and AMC than having to worry about building their own theater chain. Studios want to worry about making movies, not selling them directly to the consumer.

but the middleman (website) is owned by the studios - the cost of this portal is not that much, once the user picks the movie, the user gets redirected to the studios hosted site.  the revenue can be allocated based on the number of movies watched. if i pay $10/month, i watch 3 sony flicks in a month, sony gets all $10, if in a month i watch 2 sony movies and 2 paramount each gets $5.  Hulu whiles structured difrrently than the simple scenario im using as an example is the middleman owned by the studios which equals more money for the studios. again, my point is the studios can eliminate Netlix as the current middle man if they wanted to and create a middle man they own to keep more profits. eventually profit growth becomes harder and harder and the studios will do away with netflix.

 

[irvinehomeowner]

my point is the studios can eliminate Netlix as the current middle man if they wanted to and create a middle man they own to keep more profits. eventually profit growth becomes harder and harder and the studios will do away with netflix.

You keep missing my answer... studios are in the business of making movies, not worrying about content distribution. The profits from such an endeavor isn't worth the cost of development and maintenance for such a system.

It's easier and more cost effective to license content to a middleman... or purchase one. Why do you think Google ended up buying YouTube instead of trying to continue to develop their Google Video service? It just wasn't worth trying to reinvent the wheel.

A studio can spend millions hoping to recoup those costs sometime down the line or it can make millions just licensing content to Vudu, Redbox Instant and Netflix and have to worry about the headache of maintaining its own service.

You may not believe it, but in this particular space at this particular time, the middleman model is more profitable to studios.

 

[irvinehomeowner]

Netflix finally announced Profiles:
http://www.engadget.com/2013/08/01/...reaming-profiles-start-rolling-out-worldwide/

It allows 5 per account.

This is why I didn't think they would go away, they keep improving their technology constantly. They added a Kids version of their interface earlier, have increased the number of titles that support captioning, added 1080p and 3D content and continue to add features to their interface (auto start of next title was a good one my kids liked).

It's at about $250 right now... I don't think that USC call of $40 is going to happen anytime soon.

 

[nosuchreality]

I used to love Netflix.  I killed my account after we moved because the streaming was too broken up at the new place and with the new baby I wasn't getting any time to run on my elliptical.  It was perfect for picking a TV series and start an hourlong episode (45 minutes), and start your workout.  Workout and finish episode all in one spinning.

I really want to get rid of our DirecTV.  The service is wonderful.  The $150+/month price tag for the three TV, HD and DVR is not.

I just need a reliable HD antenna that doesn't have massive drop out and a way to do the DVR.  Not to mention way to get AMC and a couple other channels. 

 

[OCgasman]

I really want to get rid of our DirecTV.  The service is wonderful.  The $150+/month price tag for the three TV, HD and DVR is not.

Do it!  We gave up cable and the $100+/month bill a couple years ago and never looked back.  You have to be willing to give up live sports, football season was the toughest for me.  But love the money savings and really love my daughter not watching so much TV. 

We have an AppleTV so we stream some Netflix and still get Blu-rays thru the mail for our movie fix.  Netflix has great content for kids and I love having no commercials.  The commercials is what's stopping me from getting Hulu.  I would pay extra to be commercial free and emailed Hulu that, but all they said was "we offer great value, blah, blah, blah..." Whatever.

Anyway, I know it seems weird not having cable or satellite, but it's quite liberating.  Give it a try.

 

[usctrojancpa]

Netflix finally announced Profiles:
http://www.engadget.com/2013/08/01/...reaming-profiles-start-rolling-out-worldwide/

It allows 5 per account.

This is why I didn't think they would go away, they keep improving their technology constantly. They added a Kids version of their interface earlier, have increased the number of titles that support captioning, added 1080p and 3D content and continue to add features to their interface (auto start of next title was a good one my kids liked).

It's at about $250 right now... I don't think that USC call of $40 is going to happen anytime soon.

It's just a matter of time that a management misstep and/or earnings miss happens and it's LOOK OUT BELOW.  Anyhow, I don't track stocks are they can be manipulated and/or ride momentum for a long time.  I still to trading options on indexes should as SPY, QQQ, VXX, and VIX, as you they say....trade what you know best. 

 

[irvinehomeowner]

$313. Dang... USC... that's pretty far from $40.

 

[usctrojancpa]

$313. Dang... USC... that's pretty far from $40.

It's a momo stock...just like Telsa.  You don't get in the way.  I don't trade individual stocks...only index and company options for me.  My results speak for themselves (see attachment).  ;D

 

[irvinehomeowner]

Ah c'mon.... just admit it. You were wrong... it went completely opposite of your $40 call.

Forget the price of the stock, you claimed that Netflix would be out of business. I think it's because you don't consume that type of service, you don't understand the value of it... also known as the "You don't have kids who LOVE to watch Netflix" index.

When we discuss things like this, we're not analyzing your option trading success, so you can't make predictions on an individual stock value if you're going to claim you don't "trade individual stocks".

It's alright, AAPL has been a thorn in my side (now in the high 400s when it was close to 700) and GOOG is bonkers. Just like housing... no one knows jack.

 

[usctrojancpa]

Ah c'mon.... just admit it. You were wrong... it went completely opposite of your $40 call.

Forget the price of the stock, you claimed that Netflix would be out of business. I think it's because you don't consume that type of service, you don't understand the value of it... also known as the "You don't have kids who LOVE to watch Netflix" index.

When we discuss things like this, we're not analyzing your option trading success, so you can't make predictions on an individual stock value if you're going to claim you don't "trade individual stocks".

It's alright, AAPL has been a thorn in my side (now in the high 400s when it was close to 700) and GOOG is bonkers. Just like housing... no one knows jack.

I still don't think Netflix has a solid long term model, just like I don't think Tesla have one either (it's the flavor of the month for now).  Content costs and competition will catch up to it, give it some time.  Was I wrong about the timing, of course I was.  I've learned long ago that the market can stay irrational longer than anyone can stay liquid so I just go with the flow. 

 

[irvinehomeowner]

I still don't think Netflix has a solid long term model, just like I don't think Tesla have one either (it's the flavor of the month for now).  Content costs and competition will catch up to it, give it some time.

I don't think that's an accurate comparison or enough to prove that Netflix does not have a "solid long term model".

I don't feel you've done enough research into what Netflix has been doing or even used the service enough to make that type of determination.

From what I understand Netflix is profitable on its own merits, not from gov subsidies like Tesla so that's not really a match.

As for catch-up, yes, that's possible, but Netflix is so far ahead with content, delivery and service features that if it does things right, it will stay around (but then again, so was Palm and Blackberry). The things they have been doing in the last year or so since the Qwikster DVD debacle shows that they are willing to learn and course-correct.

Do you think GOOG is flavor of the month?

 

[usctrojancpa]

I still don't think Netflix has a solid long term model, just like I don't think Tesla have one either (it's the flavor of the month for now).  Content costs and competition will catch up to it, give it some time.

I don't think that's an accurate comparison or enough to prove that Netflix does not have a "solid long term model".

I don't feel you've done enough research into what Netflix has been doing or even used the service enough to make that type of determination.

From what I understand Netflix is profitable on its own merits, not from gov subsidies like Tesla so that's not really a match.

As for catch-up, yes, that's possible, but Netflix is so far ahead with content, delivery and service features that if it does things right, it will stay around (but then again, so was Palm and Blackberry). The things they have been doing in the last year or so since the Qwikster DVD debacle shows that they are willing to learn and course-correct.

Do you think GOOG is flavor of the month?

Current flavors of the month are Netflix, Yelp, Tesla, and Linkedin (aka the momo four horsemen).  Facebook and Amazon would be the 5th/6th in the group.  I would consider GOOG a fairly valued stock.  I stick with a simple motto....trade what you know. 

 

[irvinehomeowner]

@usc:

You're mixing again. You can't really speak to "long term model" and then claim it's just a "momo" because aren't those almost exclusive?

GOOG may be a "momo" but it's hardly "flavor of the month". It has been rising steadily since the 08 dump.

 

[usctrojancpa]

@usc:

You're mixing again. You can't really speak to "long term model" and then claim it's just a "momo" because aren't those almost exclusive?

GOOG may be a "momo" but it's hardly "flavor of the month". It has been rising steadily since the 08 dump.

I never said that GOOG is a momo stock anymore and it is definitely not the flavor of the month.  Very solid company that dominates their market where they print money.  If I were to buy and hold a stocks, GOOG would be at the top of the list.  I much rather own GOOG versus Facebook or Amazon.

 

[irvinehomeowner]

@usc:

My bad... I misread your post, thought you said GOOG was a momo too, I apologize.

I agree, would take GOOG over FB any day. Amazon might be okay... although I'm not convinced that the Kindle Fire is going to remain competitive, B&N has already given up on the Nook and they had physical presence not just in their stores but also BB and Target (the latter even removing Kindle from their shelves).

Do you play on the foreign markets? Like Samsung or HTC (almost opposites)?

 

[usctrojancpa]

@usc:

My bad... I misread your post, thought you said GOOG was a momo too, I apologize.

I agree, would take GOOG over FB any day. Amazon might be okay... although I'm not convinced that the Kindle Fire is going to remain competitive, B&N has already given up on the Nook and they had physical presence not just in their stores but also BB and Target (the latter even removing Kindle from their shelves).

Do you play on the foreign markets? Like Samsung or HTC (almost opposites)?

Nah, I keep it simple and trade index options in the US which is what I know best.  With each trade I continue to learn and refine my trading strategy so the market always keeps me on my toes.  I like to sleep so no way would trade foreign markets or things like Fx, metals, or futures. 

 

[irvinehomeowner]

http://business.time.com/2013/10/01/netflix-is-coming-after-your-cable-box/?hpt=hp_t2

They will never get Time Warner Cable to agree - since they own HBO and Cinemax.

Read another article that this may be close due to the fact that Netflix is partly responsible for the popularity of cable TV series.

Prior to Netflix streaming, Breaking Bad didn't have good ratings, but once it was available, numbers slowly went up to create the Walter White phenomena we are all familiar with.