Saw This Coming - Roku Builds it's OS Into TV Sets

In a move that surprised nobody, Roku has announced that they will build their streaming services into TCL and Haisense televisions. I've been calling this for years, as we can presume just about everyone in the media-tech game have. This really only precedes Apple TV becoming a real TV. In any case, full story via the LATimes here.

Are We Surprised People Are Pissed at Netflix?

via AllThingsD

Turns out Netflix customers took the service's recent price hike harder than expected. As a result, the multiplatform video rental company has had to cut third -quarter U.S. subscriber projections by 4% from 25 million to 24 million. "The majority of the shrinkage, Netflix says, will come from its DVD-only customers," reports All Things D.

Still, "Netflix now sees 9.8 million streaming-only customers, down from 10 million previously, and 2.2 million DVD-only customers, down from 3 million expected previously," Barron's Tech Trader Daily reports. "Total streaming  said it expected a bump in third-quarter revenues as a result of the price hike (for DVD and streaming video joint subscribers).

Despite the new subscriber growth projections, "Netflix said that its financial outlook hasn't changed," ZDNet writes. "In other words, the financials add up for Netflix."

Netflix also originally said it expected its growth trajectory to resume by the end of the year, but the chances of that are now looking less likely. Regarding to change, GigaOm writes: "That appears to have had an effect on the number of people subscribing to the service."

Netflix CEO Reed Hastings said he saw all this coming. "We knew what we were getting into," he said, according to All Things D. "We tried to be as straightforward as we could, and that has worked out very well for us."

Said Netflix in a statement: "We know our decision to split our services has upset many of our subscribers, which we don't take lightly, but we believe this split will help us make our services better for subscribers and shareholders for years to come."

Netflix's Facebook Integration Marks Shift Away From Viewing 'Households'

Interesting stuff on Netflix incorporating Facebook. Makes total sense, think about how many users of Netflix are streaming on the go as opposed to ordering DVDs.

by Gavin O'Malley,


Representing a strategic about-face, Netflix says it is currently baking Facebook into its entire service -- in large part to encourage a segmenting of household accounts into multiple personal accounts.

"We're working on an extensive Facebook integration, which will further the notion of a personal Netflix account," Netflix said in a shareholder letter issued this week.

Netflix accounts have traditionally been affiliated with individual home addresses, but more screens per household -- along with more diverse offerings -- gives Netflix the opportunity to mine households for multiple accounts.

"When we were primarily a DVD-by-mail service, we measured our market in terms of households," Netflix said. "Households subscribed to Netflix and members of the household watched the DVDs as they wanted ... Online streaming video, however, is more naturally individual, since it is watched on personal screens like phones, tablets, and laptops, as well as on shared large screen televisions."

Netflix previously launched social tools, but scrapped them last year after they failed to take off. Mike Hart, previously Netflix's director of engineering for APIs, is now director of engineering for social.

"Our long-term goal is to evolve the Netflix service so that it feels more natural to have a personal account," Netflix said this week. "This evolution from household to personal relationship will take several years, and there will always be some households that only have one account."

In what may prove a challenge to Netflix's social strategy, a recent study found that the TV watching isn't as "social" an experience as one might assume. Rather, just 25% of consumers expressed an interest in sharing what they watch with friends, according to SideReel, which helps users find content and TV shows online.

Going forward, however, that may be the least of Netflix's problems. Its relationship with media companies could soon change when a deal with pay-TV channel Starz to stream movies from Sony and Disney expires. Indeed, Richard Greenfield, an analyst at BTIG research, estimated that the cost of the deal could go up from $25 million a year to more than $250 million a year.

Overall, according to research firm Screen Digest, Netflix revenues for 2010 were expected to reach $2.2 billion.

Netflix's snail-mail business was expected to account for 35% of disc-rental spending in the U.S. in 2010 -- up from 26% in 2009, according to Screen Digest.

Hulu Holds Off On IPO

So Hulu says it's foregoing an IPO to push harder on their subscription model, which is their current Hulu Plus offering ($7.99 for access to extra content libraries, as well the opportunity to watch on your mobile device or connected TV). As an avid Hulu user but non-subscriber, I find one very interesting point in Hulu's statement in the Wall Street Journal below, "subscriptions may allow the site to distribute material is currently doesn't offer. What that content is, the paper's sources couldn't say."

So they are counting on a new subscription model, but they don't know what the content is? Um, ok. So what am I paying for? I personally take a Netlix subscription over Hulu Plus any day, but that's just me.



courtesy WSJ...
While Hulu, the premium video destination has been mulling over the idea of an IPO since August, it has quietly tabled the idea. According to a report in today's Wall Street Journal, Hulu is instead looking at other ways to raise revenue.

Citing unnamed sources, the paper says that Hulu's board shelved the idea for an initial public offering (IPO) because of concerns that Hulu doesn't have long-term rights to the content is shows online.

Instead, Hulu may look to subscription offerings beyond the recently-introduced Hulu Plus. These subscriptions may allow the site to distribute material is currently doesn't offer. What that content is, the paper's sources couldn't say.

Additionally, Hulu may raise funds by getting its existing owners to put in more money.

The Hulu Plus service goes for $7.99 per month, down from $9.99 per month during the preview period. Hulu is already aggressive about raising revenue. As a recent report from comScore showed, the site streamed 1.1 billion video ads in November, making it the top site for video ads. Its viewers averaged 42.4 ads per person. Hulu shows ads even on Hulu Plus content.

According to the Journal, Hulu is outperforming the company's expectations for paid subscribers. In a recent interview, Jason Kilar, Hulu's CEO, said the site was generating "material" revenue, and will earn $260 million in revenue for 2010.