The Future Has Numbers Attached or How Netflix is Kicking Ass

From our friends at NewTeeVee who site WSJ sources:

Netflix continues to see its subscriber numbers and earnings increase due to strong interest and customer adoption of its Watch Instantly streaming service. With more than 60 percent of users logging in to stream videos, Netflix blew away Wall Street earnings estimates and looks to continue its strong growth throughout the rest of the year.

Nearly 2/3rds of Netflix subscribers stream video... 

Soon, movies will be D2Netflix  and D2iPad. 

The numbers don't lie. 

Reed Hastings of Netflix: It's Not The Number of Titles, It's The Stream

New TeeVee has a nice piece this morning regarding Netflix as it adds more and more indie titles to its catalog of offerings to its subscribers.Reed Hastings, CEO of Netflix says that the 100,000 titles catalog is not a good barometer for the company's success. To him, success equals the number of streams going out:

Instead of looking at the streaming service’s title count, Hastings urged analysts to think about how many of Netflix’s users are streaming video to determine how successful the service is. Netflix said on the call that about 48 percent of its subscribers used the Watch Instantly service in the fourth quarter, compared to 41 percent in the third quarter and 28 percent a year ago.

“What you really want to ask is, ‘When are we going to have two-thirds of our subscribers streaming? When is the content so good that two-thirds of our subscribers choose to stream?’” Hastings said. “The answer to that question for you, I would guess about one and a half years, just based on current trends of what we have seen growing.”

Roger Corman Presents: SPLATTER

Is it a Cable TV premiere or a D2DVD?

No - it's Netflix's first ever web series! (via Tubefilter)

Netflix, which started as a simple “DVD delivery to your home” service and has grown to delivering movies straight to computer and XBox is now about to tackle the world of web content. And they are doing it with a bang. Literally. To Corey Feldman’s head.

Feldman announced yesterday on his blog that not only will he be reprising his role as Edgar Frog in Lost Boys 3: The Thirst…he’s also going to be starring in Netflix’s first ever web series, Splatter. Not only that, he’s teaming up with legendary directors Joe Dante and Roger Corman to do it.

The project itself is still mostly under wraps but Feldman could say a few things about it. “The project is titled Splatter and is being created for Netflix. This will be their first ever live streaming web series. Splatter will be a multi episode web series that will go live on the web on Halloween weekend. My character’s name is Jonny Splatter. That is pretty much all I am allowed to say for now.”

But there is one more small thing more he can show you… “in light of Friday’s Chiller Eyegore awards ceremony, the folks at Netflix were kind enough to launch a teaser site of the new web series as the show began. I will give you the website address so you can catch the first glimpse for yourself…but before I do that I must give you a warning…this is not for little kids. The material is graphic in nature, and parental discretion is strongly advised…this is a pretty shocking 30 second clip you will see. Please make sure you remove small children before reviewing this teaser. OK now that, that has been said, the address is www.netflix.com/splatter … and remember it’s just a little Halloween fun!”

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Okay gang, the takeaway on this is:

1) Netflix thinks there's money in webseries.
2) Netflix has a business model that is very very strong.
3) Roger Corman (a man who doesn't do anything unless he sees the "upside") is doing a web series.

This is good for all of us. Now we have to find out how much they're spending, the structure, etc... the business details.

RedBox and Netflix = Majority

Scott Kirsner over at Cinematech made a discovery today after reading this article from the NY Times.

RedBox and Netflix together represent 54% of the
DVD rental business in America.

These two companies - whose mottos advocate bargain DVD rentals and convenience (so much so that Netflix added a download to rent program) represent the consumer wishes when it comes to their rental entertainment.

I can only imagine that the current lawsuit outlined in the article will only spur consumers to find more RedBox locations near them or open a Netflix account. The Studios are in the unenviable position of having to argue that they aren't making enough money on their movies...

And when the figures are trotted out as to how cheap it is to actually manufacture and replicate a disc - the average consumer will wonder why they couldn't just make a rental version of the movie and a retail version (as some studios are doing).

The studios that are fighting RedBox have a much higher hill to climb. If they actually trot out numbers as to how much it costs to make Hollywood blockbuster movies then we'll all get a peek at how much fat there is built into the Hollywood machine. No one will argue that they have to recover their production and marketing costs.

But when they open the books and people see what the costs are - what was actually charged to the movie's accounts on the studios books - well there's going to be an outcry... Especially from hedge funds that have invested in Hollywood movie making.

This is a can of worms. Squiggly, epileptic worms.

Add This to the New Media Logpile

Netflix shows profits as more budget-conscious Americans are embracing low-cost movie rentals over higher-priced theater tickets, a trend that helped Netflix to again deliver better-than-expected earnings.

The company says its download service, which it offers free to higher-tier subscribers, is gaining traction. Earlier this month, it announced deals to stream back episodes of Comedy Central's popular "South Park" animated series, and Nickelodeon shows such as "SpongeBob SquarePants."

But the company also noted the growing competition from cheap DVD rental kiosks.

"We're seeing a major shifting in the landscape between the content providers, different distribution models and the competitive environment," Janney Montgomery Scott analyst Tony Wible said.

Analysts asked about plans for a new pricing tier of streaming-only service, without the discs. Netflix said Thursday it's not a top priority at the moment.

Michael Pachter, an analyst with Wedbush Morgan Securities, said the transition away from DVDs will take years, but added that Netflix is smart to start weaning its customers off the plastic discs.

D2N (Direct-to-Netflix) on the horizon?

Netflix Announces Indie Film Contest ala 'Project Greenlight'

From Video Business:

JAN. 8 | LOS ANGELES—Netflix, actor Josh Brolin and Los Angeles-based nonprofit Film Independent (FIND) today announced a film competition that this summer will award $350,000 in cash and film services to an aspiring filmmaker.

The largest U.S. movie-rental service via mail, Netflix will contribute $150,000 to the "Netflix FIND Your Voice Competition," while companies such as Eastman Kodak, Deluxe Entertainment Service and Panavision will contribute the rest in products and services, the companies and actor announced in a press conference at the W Hotel here today. Netflix will distribute the winning film on both DVD and in video-streaming form.

Not a bad gig if you can get it, but here's my one problem with it:

They are using film (from Kodak), film processing (from Deluxe - Hi Steve!) and transfer, and a DI (Digital Intermediate courtesy EFilm). Read more details here.
So that means you have $150K for production and edit, and $250K for camera package and post-processing.

If only you could eliminate the need for the film stock processing, transfer and DI color grading so you could streamline the whole process taking dailies direct to edit. You could take the time saved as well as the moolah and put it back onscreen.

But I guess you can't do that.

Oh wait. You can.

Gee, you would think that Hollywood indie folk would be all about innovation, and cutting costs, and putting the value up on the screen where it belongs... but I guess they're not.

Then again.

Kids, always always put your dollars onscreen. Think smart, not with your pocketbook. Learn to question things after you've studied them.

I wish the person who wins this contest the best of luck. Go get 'em, and show them your story. This is a great opportunity for someone to get in there with a fresh perspective and tell a whopper of a yarn.

I just wish you didn't have to use film to do it.

Edit to add: I realize I'm being the "my beer is half-empty guy" here. I apologize for that. No one wants to be that guy. Again, I wish everyone who participates in this the best of luck. Make it the best opportunity you can.

Add Some Sex to Your Netflix List!

Friend of the blog John Oak Dalton (see sidebar) reminded me today that you can all add SEX MACHINE to your Netflix listing very easily by just going here.

SEX MACHINE is the outrageous pulp movie written by Dalton and Director Christopher Sharpe, distributed by Anthem DVD. It contains tons of pulpy goodness and extras on how they made this weird tribute to Frankenstein and Tarantino. You can read more about the movie's history here.

MTV says: "For fans of mad scientist flicks, “Terminator” style adventures and Dario Argento splatter, Sex Machine is a must."

Here's links for other critical thought-provoking reviews.