Netflix Claims Americans Don't Want Standalone Streaming Movie Service

from the say-what-now? dept

Netflix’s streaming movie service has been pretty successful according to most of the analyses I’ve seen, but it’s still tied to the DVD rental service. So it’s a bit surprising to find out that, while Netflix is readying a streaming-only service, it won’t be available in the US because (according to CEO Reed Hastings):

“the company hasn’t seen much interest in something of that nature in the States.”

Karl Bode, over at Broadband Reports, has the appropriate response:

Wait, What? 42% of Netflix users have streamed at least 15 minutes of one TV show or movie during the last quarter, up from 22% just one year earlier. Personally, my DVD queue has sat unused for months, with the majority of my film and HDTV viewing now occurring via the far more efficient Xbox 360. The demand is certainly there, it’s just not quite mainstream yet. So what’s really going on?

His guess… and it’s a good one, is that Hollywood isn’t really thrilled with the situation, and is holding back the licensing that would enable such a service.

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Companies: netflix

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Comments on “Netflix Claims Americans Don't Want Standalone Streaming Movie Service”

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41 Comments
DigitalBoy0101 (profile) says:

Stream THIS, Hollywood

I’m a recent (in the last 3 months) Netflix subscriber, and I have to say, so far I’ve watched FAR more streaming movies on my desktop computer than DVDs from the mail.

That being said, there’s still a good number of movies I want to see that aren’t even available for streaming……those, of course, go in my DVD queue.

I’d have to say I have been using the streaming portion much more than I anticipated when I started my subscription. However, even if a streaming-only service were launched, I’d keep my current combination subscription as there are too many movies I’d like to watch that aren’t available via streaming.

JohnForDummies (profile) says:

The reasons why more people aren’t streaming…
1) Their choice of operating system is not supported.
2) The quality is fine for most people, but there are those who demand only hi-def.
3) Newer releases aren’t available. They have to get them on disc.

Now, points 1 & 2 will eventually be fixed. They have 2 choices… go to Flash based streaming (which I hope they never do), or help to improve the technology.

Number 3 will never be fixed because of Hollywood. nelsoncruz is right… it’s not your average American movie watcher that doesn’t want streaming, it’s American movie execs that want to crush it.

Anonymous Coward says:

I guess I’ll provide the counterpoint/counter-antecdote I’ve been a happy netflix subscriber for a few years now. I hardly ever use thier streming service though. It is a nice bonus alongside thier disc delivery service but it isn’t a main reson that I subscribe.

On the other hand they just announced that they will be offering their streaming service on the PS3 soon, so that may affect my viewing patterns.

I think that they have looked at the economics and the desires of the customer base and that at this time it makes more economic sense for them to keep the services bundled. In the future it may make sense for them to separate them. After all the goal is to make the customers the happiest possible, the goal is to keep the customers satisfied and rake in as much money as possible.

chris (profile) says:

Re: Re:

I think that they have looked at the economics and the desires of the customer base and that at this time it makes more economic sense for them to keep the services bundled.

for now, maybe. it’s a big hit with the early adopter crowd and is becoming mainstream. i dumped blockbuster online and i am seriously considering a netflix subscription mostly for the streaming service.

After all the goal is to make the customers the happiest possible, the goal is to keep the customers satisfied and rake in as much money as possible.

the goal is to keep costs down so they can keep making a profit. customer happiness is just one point in a complex matrix. more important than customer satisfaction is keeping hollywood at bay lest the movie cartels decide to triple the prices of the discs they authorize to netflix.

that’s the problem that netflix, redbox, hulu, and everyone else is facing: the delicate balancing act of giving their customers what they want while keeping hollywood from completely alienating those same customers.

whenever companies want to innovate too much, hollywood wants to take its content and go home. this is unfortunate for services like netflix who are presumably built on the idea that hollywood wants it’s movies to be seen by people.

personally, it doesn’t affect me at all. i get all the movies i want, mostly via filesharing and sometimes via DVD rental. it’s easier for me to obtain the films than it is to make time to watch them, so when it comes to movies and television, i’m set.

so if hollywood decides to crush netflix, or hulu, or whomever, i’ll still get mine. they’ll have to stop making movies all together before i start to miss out, and based on the dwindling number of good movies i have seen of late, i don’t think i’ll be missing that much.

let’s hope that hollywood soon realizes that their choice of revenue streams is becoming limited, and that companies like netflix may be their only hope for growth.

yonatron (profile) says:

Not the greatest argument

I’m not sure I buy Bode’s reasoning here. He says 42% have streamed at least 15 minutes, but that tells us nothing about what proportion of those 42% a) stream heavily or b) rarely use the disc-by-mail option. So it’s pretty much useless in terms of arguing against what Hastings said.

The rest of his argument is an anecdote. I don’t know what he expects anyone to extrapolate about Netflix’s market from a single user’s personal preference.

Not that I’m asserting you and he are wrong or anything, but you’re not providing any real evidence for anything.

Bryan says:

Problem with Streaming

The problem for me, and I’m guessing at least a *few* other Americans, is the horrible selection in Netflix’s Watch Instantly library.

I have a HUGE interest in being able to stream TV Shows and Movies from Netflix, but they have quite possible the worst selection of all time. Sure, if you love B-Rated, extremely old, documentary, or independent movies then Netflix is definitely for you. But if you want to watch popular movies that have been released even in the past few years then you will quickly run out of content.

I have a mail subscription with Netflix which comes with free unlimited Watch Instantly for 9$/month. For the first month or 2 after getting Watch Instantly I was pleasantly surprised to find some interesting content on there. Since exhausting those options in that first couple months I check back every so often and am usually disappointed. Thereafter I usually either go to Hulu or pick up a movie On-Demand.

I’m guessing that at least the majority of Americans feel the same way. I don’t know if the Europeans are more used to these non-recent, non-Hollywood type movies, or if they have some different available content than we do. But I suspect that this is a large part of why Netflix sees a decreased interest in the States for Watch Instantly.

Anonymous Coward says:

People like a certain randomness and surprise factor.
Some people also don’t like making choices from a huge menu.
Reason people tend to eat the same dish everytime they go to a restaurant with a huge menu selection. Too many to choose from.
Same reason some people will watch a movie on tv, even if they have that movie on dvd.

There is a certain pleasure out of going to the mailbox and seeing what movie awaits.

Anonymous Coward says:

Re: Re:

The DVD people keep and not watch is a beard for the all streaming service. If they can claim you rented a DVD and let you stream a few movies they are covered. It doesn’t matter if you only sit on one DVD and stream like a crazed weasel so long as the entertainment industry believes the other case.

They are DVD rental service that streams not a streaming service that rents a few DVDs.

Leagal Streamer says:

Streaming is the future of media

I have canceled my satellite and I hope that I never have to pay for such a service again. I agree that Hollywood is most likely the big hold up. Just like the RIAA and the music industry. The MPAA and other Hollywood groups really need to look at the past of the music industry and learn from it. In this day and age why should I be restricted to watch TV and movies on anyone else’s terms but my own. I do not want to make money off of someone else’s product and I do not mind watching some ads or paying for a service. Just make it on my terms. You can make money with the model of streaming media. If that was not the case why are so many UPNP devices popping onto the market and network streaming devices. Media servers like PlayOn, TVersity, and many others gaining in popularity. The main reason that I have netflix is for the streaming option. I also like the Blu Ray selection but I am more about convenience and that is what streaming is about. Hollywood, Look at the RIAA struggles and learn from that. Change your business model to give us what we want. We will pay and you will make money. I Promise there is a way to be profitable. People will always find ways to steal. Most people, I hope, would rather not and some that I know, pay for a service to allow them to steal and the proves my point that it is about convenience.

Elvenrunelord (user link) says:

I’m really not interested in what Hollywood wants because in the end its all about money to them and I’m not in this world to make them filthy rich.

Streaming is a green way of watching content and its a much cheaper way of delivering content. While it is concerning that many people are out of a job because of the need for less employees to accomplish the same workload, Capitalism as a viable economic model is on it was out anyway so lets take advantage of the technology we have and use it to its fullest capacity.

I do use Netflix rental service but rarely their streaming service anymore. All the good movies are usually not available to stream and their TV show quality just SUCKS.

IE where is my 1080p streaming Netflix? I didn’t buy this 10 meg connection just to see it sit idle!

Hollywood will learn to give the customer what they want or they can go bankrupt. Really its up to them. They are no longer a entertainment monopoly. They actually have to compete for eyeballs now!

Anonymous. says:

Remember the Movie industry doesn’t sell movies, the sell plastic discs with movies on them.

All information-based monopolies are based on selling a physical medium (newspaper, cds, books, vinyl, tickets, etc)

There price model fails when content is delivered without a physical medium that can be preserved and transferred indefinitely.

MIAA, RIAA, Disney, Viacom, etc do not want an information age.

Chris says:

Been a customer for many years

I’ve been with Netflix for many years. With that being said, I absolutely love the convenience of the netflix streaming and value it A LOT due to the fact that I own a Roku player. Contrary to what people above have stated, there are some shows that are available via streaming that are new (and available in HD quality), such as “Heros” and “Desperate Housewives”.

My only complaint is that there simply aren’t enough licensed movies / shows for streaming to stop DVD mailers just yet. If / when Netflix manages to convert the majority of their movies into streaming format and provide streaming content for ALL upcoming movies / shows, then and only then will I feel that we can let go of physically mailing DVD’s back and forth.

With regard to demand, I certainly support the streaming model.

Recycled Bottle says:

I think Netflix is right..

If Netflix offered a standalone service in the US it would probably be more then 9.95/mo as the international version would be. The major difference is that the international version will include new releases rather than all the old crap we get in the US. (I stream 2-3 movies per week and get one disk).

Now if only they would add a movie channel to my Wii!

Chris says:

Hollywood doesn’t want streaming because it devalues a DVD. If you can stream a movie anytime you want, who will ever buy a movie in a physical format? (how many times do you really watch a movie anyway?) It’s the same reason they are/were going after RedBox. They even said “Redbox devalues our product.” It’s a joke – if a company can afford to operate charging only a dollar, then Hollywood needs to figure out how to adapt. Try not paying actors absurd salaries.

Ian says:

Can someone help me understand?

. Providing a content license to stream movies costs The Movie Industry less than creating, packaging, and distributing DVDs. Allowing customers to stream movies costs Netflix less than shipping, handling and replacing DVDs. Therefore, if The Movie Industry sold streamed movies at the same price it currently sells DVDs, its total profit would increase, and if Netflix rented out streamed movies at the same price it currently rents out DVDs, its total profit would also increase.

. Consumers have traditionally been willing to pay considerably more for a DVD than for a streamed movie, so this has been the preferred option for The Movie Industry. However, many Netflix users (like myself) actually prefer streamed movies, because they are available instantaneously. Some Netflix users are currently concerned about the selection and quality of streamed content, but these are precisely the issues which would be resolved if streaming became the primary focus of Netflix. I would be willing to pay the same amount (or perhaps even more) for a streaming-only service from Netflix which provided the full selection and quality of movies which are currently only available in DVD form. I believe many other consumers would also pay the same or more to be able to watch any movie in their queue on any given day, instead of waiting days for each DVD to arrive in the mail… In other words, it seems to me that the costs to both Netflix and The Movie Industry would be lower in an all-streaming option, but revenues could remain similar (or even increase). Which implies that it would be a profitable decision. So what is the snag?

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