Netflix, master of DVD rentals, will expand streaming video business
Filed under: Company News, Technology, Economy, Earnings, Media, Netflix
What does Netflix Inc. (NFLX), the company that mastered home delivery of DVDs, have next up its corporate sleeve? Chief Executive Reed Hastings was coy during the company's third-quarter earnings conference call Thursday. But he did make it clear that Netflix would start streaming video on another device in addition to Microsoft Corp.'s (MSFT) Xbox gaming console, a service that began a year ago.Hastings said Netflix intends to partner with a consumer-electronics firm later this year that has a "material installed base," i.e., a computing system already in use. To some that may mean a link-up using Sony Corp.'s (SNE) PlayStation 3 or Nintendo Ltd.'s (NTDOY) Wii. UBS Analyst Brian Fitzgerald said as much in a note to investors, telling them to expect a fourth-quarter launch of another gaming console.
Update: Sony and Netflix announced late Sunday that PlayStation 3 users in the United States will have access to streaming movies and other video beginning next month at no additional cost.
The likely deal surfaces as more Netflix subscribers are choosing to stream content, resulting in a 145 percent increase in streamed video in the third quarter. Hastings said 42 percent of Netflix subscribers streamed at least 15 minutes of one TV episode or movie during the third quarter.
Other highlights of the investor call:
- Netflix plans to expands video streaming internationally starting next spring. Hastings said the overseas initiative would start small and wouldn't involve physical distribution of DVDs. While the latter would certainly be possible, he said, "postal systems in many nations make that tricky."
- Hastings seemingly sided with Hollywood movie studios' efforts to limit new movie releases to sales only. That's because they view upstart Redbox, an automated DVD rental system that rents movies for $1 a day, as eating into studio profits by discouraging purchases of newly released DVDs. Hastings said Netflix's business is "less dependent on new releases than our DVD-based competitors," and believes that it could benefit from a short sales-only window, allowing Netflix to spend less on discs and more on streaming content.
- Hastings also said Netflix has begun Saturday shipping at all of its 58 distribution centers and continues to work on automating the distribution process. Netflix will soon place a roughly $40 million order for automated rental return machines that can accept, clean, inspect and prepare returned DVDs for reshipment. The machines will cut costs and improve service, he said.
D-Day for Harry Reid: Can he wrangle 60 votes for Senate health reform bill?
Fed stalls on Chinese bank deal, costs taxpayers $1.7 billion
Dell in a handbasket: Should founder Michael Dell resign?
Reader Comments (Page 1 of 2)
10-24-2009 @ 10:48AM
ctank2041 said...
I am getting a lot of popup's from Netflix!! I click on a sport's link and Netflix's pop's up! Watch out for these guy's!!They are useing a lot of spam!!
Reply
11-09-2009 @ 8:23PM
Artie J said...
I find this very stimulating and more bad news for the movie
theaters, soon they'll go the way of the Drive-In. With the prices of large screen TV's and Surround Sound Systems coming down plus the coming of the Organic LED TV, need I say more.
Think I'll buy some Netflix stock before it goes the way of Google and Apple stock.
Reply
10-24-2009 @ 4:00PM
eric said...
Netflix needs to concentrate more on the picture quality of the streaming and SELECTION!!!!!!! I could care less about the movie houses, their poor picture quality and EXCESSIVE VOLUME have turned me away for ever. I am more than happy to wait for new releases and watch them on my big, flat screen with blue ray and home theater. MUCH, MUCH better picture and sound quality
Reply
10-24-2009 @ 1:44PM
jason said...
a price increase thats what is next RIGHT NETFLIX then will leave your service.
Reply
10-24-2009 @ 1:47PM
jason said...
obama type people!!! you are a idiot!!!
Reply
10-24-2009 @ 1:46PM
hbruss48 said...
OMG ! ! ! are you for real? Thank God there are few of you Radical Undereducated sheep of our society...Spoken as a true follower of exactly what is wrong with this country.FOX calls what they do as news, what it is is Right Wing Republican Outlet of hatred and Racism with a mask on. Best of luck, cause you're gonna need it , unless you Wake up and stop listening to the spewing of unhealthy propaganda to say the least, and I am being kind
Reply
10-24-2009 @ 2:57PM
Jerry said...
You mean to say FAUX News
Reply
10-24-2009 @ 3:08PM
DCD said...
I like going to the movies but why spend $10 to see a movie, $4 for a soft drink, $3 for popcorn and then at least $2 for candy bars? And that's just for one person. When you only have to pay $2 (actually the Redbox's $1 rental also charges another dollar for tax) or subscribe to Netflix. In today's economy it just makes sense.
Reply
10-24-2009 @ 4:05PM
eric said...
"pushing Obama type people"....how funny. I always get a kick out of you far right nuts. Did you get your assault rifle and stock up on shells too. lol Go and pray to your Bush alter tonight
Reply
10-24-2009 @ 4:30PM
Lance said...
It's crazy that a conversation about renting movies turned into a political debate?! I consider myself to be independent I suppose because I see ideals that I like and dislike in both the Dem and Rep parties. I can say that one of the things that disheartens me these days the most is the great division that has developed between ourselves. I see Fox pushing a far right agenda, however, MSNBC serves as basically the same agent for the extreme left. I am afraid that we have witnessed the death gasp of an actual free media in the U.S. in our lifetimes. The American Citizen has to choose which propaganda he/she wants to adhere to the most.
Reply
10-24-2009 @ 5:50PM
Jack said...
Netflix is the way to go. I held back on opening a Netflix account then finally did. I couldn't believe what I was missing. My kids were spending like crazy on DVD's and even BlueRays.(We are now selling most of them on eBay!) This pretty much put a stop to that. Then I added a ROKU box for $99. Get serious! Anybody that watches the boob tube much has got to get one of these. So simple to buy and install. Had it going in less than a minute. Now I can stream video with stopping viewing when I want from thousands of movie titles. I can watch video on my laptop anywhere I go - even in my car and office as I have mobile internet. Everyone can watch movies in the house from our wireless internet. Price? Go grief - for just pennies a day and get all of this. When we do have to order a movie via DVD I thought it would take many days for a turn around. It has taken no more than 3 days and less from the time I drop the DVD in the postage paid envelope until I get a new order. Try it for 30 days and you won't be sorry.
Reply
10-24-2009 @ 5:58PM
Jack said...
Oh, and I apologize for not saying something nasty about Bush or Obama since everyone seems to have to add Politics to every subject. I'll be brief - Yes, I did buy a few extra asault rifles and handguns - gun safe filled with ammo; I hate Obama for what he is doing to the country & world; didn't like Bush that much; can't say I would side with either party as they are both riddled with losers, thiefs and crooks; and blah blah blah. I am a conservative and well prepared and refuse to lock in step and always will. Hope that makes everyone happy now. Now go back to your normal hate stuff. Me? I'm sitting down in front my fireplace with a cup of coffee with the family. Don't forget to click the down arrow next to this post as it REALLY is important - only to you.
Reply
10-24-2009 @ 7:09PM
Mike said...
You are 100% correct. I will watch movies until the O'Rieley Factor comes on , then I can get the real truth about what is going on in the U.S.
Reply
10-24-2009 @ 7:30PM
rck8543 said...
Eric: say goodbye to your country...you have slept it away.
Reply
10-26-2009 @ 6:23PM
James Bond said...
So sad that everything has to have a political divisive tone. I'd suggest we all remember that we are Americans. Because we have access to a computer we can do our own news research and not listen to programs that do not have serious news but mostly political commentary.
Just like Jerry Springer, these "so-called" news programs can only increase their ratings through sensationalism.
Reply
10-24-2009 @ 8:21PM
Chris said...
I have been a member of Blockbuster total access for more than two years. But, they keep changing the plan. First it was get three in the mail return them and get three more, even gave us an E-coupon for a free rental, game or video a month.. Very short turnaround time. Then they set it up so you could take those three into a store and get three more and they would mail you another three the next day. Then they stopped the mailing while you have the ones from the store. Now, they have stopped the free E-coupon. And the turnaround time has gone from one business day to more than three. But, if you leave the service and then want to come back, it is no longer 19.99 a month. No, now it will be $34.99 a month. I am going to try Netflix.
Reply
10-24-2009 @ 8:18PM
jo said...
I love the 'movies'....just spent big bucks to attend an Int. Film Festival. Saw films and listened to the directors do Q and A.....no MOVIES are not dead....In L A it is difficult to get a ticket on week ends. There are indeed two Americas...one is called 'backwoods'....they go to church/nascar and football. The Movies will survive without them.
Reply
10-24-2009 @ 8:43PM
Jason Y said...
How did we turn a story on Netflix into a political debate. Republican, Democrat or Indenpendent almost everyone enjoys a good movie. I say this is a great thing for everyone. Whether you want to watch a liberal movie from Michael Moore about how American Capitalism is evil, even though he doesn't donate the profits he makes from that exact capititalism to anyone but himself, or not movies are a great escape. I hope Netflix eventually expands this to new releases. I have to get my new releases through Red Box, my local video store or wait until about 2 months after to get them through Netflix. Either way hopefully everyone can see the movies they love.
Reply
10-24-2009 @ 10:23PM
Chase said...
Netflix is the GREATEST. They have every single movie ever released on DVD from around the globe. I have found more gems on here, movies I had never heard of before, than anywhere else. Personally, I love their watch instant feature. I am in and out of the hospital w/a serious illness quite frequently and w/my laptop I am able to watch all kinds of movies and tv shows (the hospital only has 5 tv channels) whenever I want. I also have a PS3 so I am hoping for a streaming w/that device as well. Their customer service is outstanding!!! Have had my membership for over 2 yrs now and have not been in a Blockbuster since and never will. The Redbox rental centers are all over my town as well. I would go to those before stepping foot in a B-Buster. PLEASE keep up the good work NetFlix!!!!!!
Reply
10-24-2009 @ 10:36PM
Pat said...
Here's a thought, go and buy Orville Redenbacher's Popcorn Popper at Macy's or one of the department stores that will carry it and watch movies at home with Netflix! You can choose what movies you want to watch from the NEWEST releases and movies that have been released in the past 3-6 mos. all the way back to the 30's and 40's if you like! You can even watch movies instantly if you want! Just don't gripe and moan about YOUR selections, they have a more movies that anybody could watch in their lifetime! Redbox will charge a $1 per day and then if you do not return the movie they will charge you $24.95 for the movie if you lose it or do not return it! There's something that some have not mentioned.
Reply