Remember how everyone freaked out that Netflix was down over the weekend due to a power outage? There’s a good reason for that: Everyone was more hooked than usual last month. June was the video streaming service’s biggest month ever — they topped a billion viewing hours, according to CEO Reed Hastings, which in layman’s terms is a freaking lot. By those stats, every user watched Netflix streaming 80 minutes a day last month, according to one estimate. Viewing is poised to increase as Netflix’s original programming, including a new season of Arrested Development, expands. To put this in realistic terms, we tried to explain what a billion hours means in a way that everyone would understand: In Law & Order terms. Dun dun.
» Bonus: Criminal Intent! Because a reader asked below about “Law and Order: Criminal Intent,” we did the math on that, too. You could watch Vincent D’Onofrio’s meal ticket 7,029,382 times, if given a billion hours.
I spent the weekend enjoying four good internet video apps on my Xbox: Netflix, HBO GO, Xfinity, and Hulu.
When I watch video on my Xbox from three of these four apps, it counts against my Comcast internet cap. When I watch through Comcast’s Xfinity app, however, it does not count against my Comcast internet cap.
For example, if I watch last night’s SNL episode on my Xbox through the Hulu app, it eats up about one gigabyte of my cap, but if I watch that same episode through the Xfinity Xbox app, it doesn’t use up my cap at all.
The same device, the same IP address, the same wifi, the same internet connection, but totally different cap treatment.
In what way is this neutral?
Hastings’ point: Comcast favors its own Xfinity services against those of video-on-demand competitors, including Hastings’ own Netflix. Knowing this, would you be less likely to use Comcast, or does it matter to you?
» How hard will moving forward be? During yesterday’s earning report, Netflix’s CEO, Reed Hastings explained off his company’s tough year like this: “We made a couple of big mistakes this year. It’s up to us to own up to those mistakes and to move forward.” But will owning up to those mistakes be enough to stop the bleeding amongst investors? A 75 percent drop in three months — when your stock is worth more than $300 — is just insane. It dropped 36 percent today alone. If you think Netflix is going to bounce back, though, now’s the time to buy their stock.
legospaceship asks: Don’t you think it’s a non issue, ultimately? Can you see the core of their streaming business going anywhere? I don’t see any other folks in the space being able to rise up and challenge them right now unless i am missing something.
» SFB says: I wouldn’t be so sure it’s a complete non-issue. This isn’t to say they’re going away anytime soon, but they’ve lost nearly three quarters of their market value in just a few months — that could lead to a change at the top. They’ve hurt their customer relations pretty severely in that time, and while they can get it back eventually, they’re starting fo face more difficult factors which could hurt their business over time. The costs for their streaming business are rising. There’s a chance they’ll see some significant competition in the next year or two (Dish Network and Hulu are each currently in the midst of an upswing, and Dish has content deals comparable to Netflix, including the Starz deal Netflix is losing). The real question is, can they bounce back? — Ernie @ SFB
» Oh, and it gets worse: The once-high-flying company now has 99 problems, and a shrinking stock price is one — one that dipped 26 percent in after-hours trading today. The company — which recently raised the cost of its legacy DVD plan, tried to split off DVDs into a separate site and then backed off after everyone hated it — also informed investors today that it would have a couple of unprofitable quarters as it expanded into the UK and Ireland. ”We expect the costs of our entry into the UK and Ireland will push us to be unprofitable on a global basis; that is, domestic profits will not be large enough to both cover international investments and pay for global G&A and technology and development,” the company said. CEO Reed Hastings blamed the drop in subscribers on the price increase.
It is clear that for many of our members two websites would make things more difficult, so we are going to keep Netflix as one place to go for streaming and DVDs. This means no change: one website, one account, one password… in other words, no Qwikster.Reed Hastings • In a very short post on the Netflix blog about the about-face his company did regarding Qwikster. He added: “While the July price change was necessary, we are now done with price changes.” That’s all you needed to say.
@Qwikster’s current Twitter home: Aww, his avatar is Elmo holding a joint. His tweets read like this: “I’m about hungry as shyt but my dad doesn’t want to buy me food lik wtf.” Mr. Jason Castillo, you’ve become the most popular user on Twitter overnight. How would you like to celebrate? “Son bitch need to stop trying to be big lik forreal forreal” (thanks @msuamber)
In hindsight, I slid into arrogance based upon past success. We have done very well for a long time by steadily improving our service, without doing much CEO communication. Inside Netflix I say, ‘Actions speak louder than words,’ and we should just keep improving our service. But now I see that given the huge changes we have been recently making, I should have personally given a full justification to our members of why we are separating DVD and streaming, and charging for both. It wouldn’t have changed the price increase, but it would have been the right thing to do.Netflix CEO Reed Hastings • In a lengthy apology he wrote on the Netflix blog. Let’s repeat that first sentence again: “In hindsight, I slid into arrogance based upon past success.” That sounds like a quote for the ages, the famous last words for many a company.
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Netflix CEO Reed Hastings and Qwikster CEO Andy Rendich explain the split. Reed Hastings apologizes at the beginning of the video for the price increase, but then moves full-steam ahead. We are witnessing the implosion of a great company, guys.
Breaking: Netflix Splits DVD And Streaming Businesses; Creates Qwikster For DVDs
Late night news. I don’t see this being a good idea for Netflix, but this looks GREAT for Amazon.
What the hell? This is a terrible idea. It’s like Netflix is trying to lose its customer base.
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