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Saturday, October 22, 2005

`Netflix to delay launch of online download service'

Headine pretty much tells the whole story.

Not a huge surprise, given these two things:

  • CEO Reed Hastings hinted earlier this month at the Web 2.0 conference that deals with Hollywood weren't exactly going swimmingly
  • When Steve Jobs, himself a minor Hollywood mogul (as CEO of Pixar), launched the video iPod earlier this week, he had all of one movie studio lined up to supply content (Disney, which is supplying only TV shows - not movies)

Netflix's stock started sinking after Hastings made the announcement.'s Sandy Brown writes:

    ...CEO Reed Hastings said the company would delay online downloads indefinitely thanks to pushback from Hollywood content providers.

    The studios are looking for ways to best monetize movie product in an environment in which piracy remains an ongoing concern, box-office results have been soft, and DVD sales have been inconsistent. Netflix will continue to pursue download technology, but Netflix plans will wait until Hollywood comes around and coughs up the content.


  • This comment has been removed by a blog administrator.

    By Blogger Mike Curtis, at 6:31 PM  

  • Scott - excerpt from HD For

    Talked to Christopher Cargill of Aint It Cool News and he had an interesting theory that made total sense about the iPod video and the downloadable TV shows Lost & Desperate Housewives. I had been talking about how those were just starter kits to test out the tech and get Hollywood one step closer to downloadable movies, he said it's that but even moreso - by choosing to make the TV shows that are storyline based, they're getting additional viewers. Think about it this way - Lost & Desperate Housewives are storyline based - if you miss an episode or two, you're less likely to watch the show. If you miss an episode, you are stuck either waiting for reruns or, after the season is over, watching the DVDs. They can't really release the DVDs right after the initial release, it's too complicated for various reasons. But now, the day after they run the initial episode, you can download the episode and catch up. If you've missed all of it so far, you can catch up, and watch it either on your computer, your iPod, or your TV (connected to the iPod). So if they can get people to catch up, they are more engaged, and more likely to watch week by week. The get hooked - 22 million viewers a week. So the $1.99 is CHEAP if it gets them an audience. They aren't worried about that $1.99, they are worried about their broadcast advertisers. So it gets them an audience week by week. The cop shows, which are pretty much interchangeable week over week, don't matter in this fashion - you can watch any given episode and it is freestanding. I'm out of touch with Lost, but I might be catching up now.

    -mike curtis

    By Blogger Mike Curtis, at 6:34 PM  

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