Wednesday, June 01, 2011
Reed Hastings: We Have A ‘Five Year Plan’ For Social Features And Facebook Integration
Digital's ninth conference, speaking with Kara Swisher about the
company's future strategy, competition, content deals and more. When
asked about whether the company is looking to add more new released,
Hastings said that Netflix is actually a complement to platforms that
offer new releases.
One of the pain points of using Netflix is that the TV and movie
platform doesn't offer a lot of new releases, the way that iTunes or
Hulu does. But Hastings doesn't seem to be too concerned about this,
openly stating that he feels that Netflix can be paired with sites and
platforms that offer newer content. He added that he'd like to include
prior-season shows from channels like HBO and Showtime. He says his
'check isn't big enough for now' but there are ongoing talks about
buying this type of content. Specifically, he says he'd love to add
HBO's 'The Wire.'
In terms of licensing content from studios and content owners,
Hastings said that the "relationship thing is over stated," and if you
have a big checkbook you can make the deals.
With regard to the competition, Hastings believes that Comcast's
on-demand platforms like TV Everywhere will become a major competitor
as cable and telecommunications companies improve their on
subscription and content offerings. In order to compete with both
these companies and platforms like iTunes, Amazon and Hulu; Hastings
says Netflix will have to improve personalization, the user interface,
and work on how to integrate social features.
Social is a 'five year investment path' says Hastings in terms of
product development. He says Netflix will have a deep integration with
Facebook, but the company has to figure out what makes sense in terms
of privacy.
International expansion is also a significant focus for the company in
the coming year. Netflix launched in Canada and will expand to a
second, unnamed country later this year. Hastings says Asia is a
particularly important region for Netlfix's expansion, with potential
markets in Korea, Indonesia, Japan, and India.
What's keeps him up at night? Hastings says that he worries about
continuing to innovate, as a large company. One of the keys to this is
building up quality talent.
Additionally, he says that Netflix has no plans to include ads in its
free version.
Young and poor challenge traditional pay TV model
separate entities--pose the biggest risks to the pay TV service model
as it exists today, a pair of reports claim.
Members of Generation Y--the young--have been well chronicled as cord
cutters whose attention spans are being drawn by any number of new
Internet-ready devices. According to a study by marketing consultants
Ideas and Solutions!, traditional pay TV providers need to develop
some nontraditional products, packages and messages to draw in and
then retain members of this upcoming generation.
That may be the easiest job facing the pay TV industry. Sanford
Bernstein analyst Craig Moffett has issued his own report that points
to the pay TV industry's "poverty problem" among Americans who, even
if the recession is over as many believe, can no longer afford pay TV
costs that have continued to rise as programmers and broadcasters
alike have demanded more bucks for their content.
"At the low end, customers aren't just choosing between one provider
and another. They're often choosing between these services and a third
meal," Moffett said. The most convenient choice for those who want
entertainment, he said, might be to take the third meal and back off
on the pay TV service in favor of Netflix (Nasdaq: NFLX), Hulu,
YouTube and other over-the-top providers and "make do with a back
catalog or off-the-run TV shows and movies."
966,000,000,000 GB
June 1, 2011 — 8:58am ET | By Jim O'Neill
http://www.fierceonlinevideo.com/story/internet-congestion-blame-it-apparently-online-videos-spectacular-growth/2011-06-01
Cisco's Visual Networking Index forecasts that video, which already
eats up more Internet bandwidth than any other content, could make up
half of all traffic this year and nearly two-thirds by 2015.
In fact, Cisco cites in its latest update of Cisco VNI Global IP
Traffic Forecast, 2010-2015, that increasing video consumption as one
of four IP traffic growth drivers; the others are more devices, more
users and faster broadband speeds.
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The VNI predicts global traffic will grow four-fold to 966 Exabytes
(that's 966,000,000,000 GB and just a scooch less than a zettabyte) by
2015 as some 40 percent of the world's population, or about 3 billion
souls, hop online, an increase of 200 Exabytes from 2014 (in 2010,
traffic on the Internet totaled less the 200 Exabytes).
And, watch out data caps, the average global IP traffic per capita
will more than triple from 3 GB to 11 GB in 2015.
Doug Webster, a senior director of worldwide Cisco service provider
marketing, said the network will have to be increasingly intelligent
to handle the burgeoning load, especially since video is
"significantly harder to deliver."
Other highlights from the update:
Globally, IP traffic will grow four-fold from 2010 to 2015, a compound
annual growth rate of 32 percent.
Globally, IP traffic will reach 80.5 Exabytes per month in 2015, up
from 20.2 Exabytes per month in 2010.
Global IP networks will carry 2.6 Exabytes per day in 2015, up from
664 Petabytes per day in 2010.
Globally, IP traffic will reach an annual run rate of 965.5 Exabytes
in 2015, up from an annual run rate of 242.4 Exabytes in 2010.
Global IP traffic in 2015 will be equivalent to 241 billion DVDs per
year, 20 billion DVDs per month, or 28 million DVDs per hour.
In 2015, the equivalent of an archive of all movies ever made will
cross Global IP networks every 4 minutes.
Globally, IP traffic will reach 11 Gigabytes per capita in 2015, up
from 3 Gigabytes per capita in 2010.
Globally, average IP traffic will reach 245 TBps in 2015, the
equivalent of 204,100,000 people streaming Internet HD video
simultaneously, all day, every day.
For more:
- see this report
- see this MultichannelNews article
OTT Video Will Grow to $20B Industry in 2016, Says Report
Over-the-top video, meaning video streamed from online sources to
living rooms via connected boxes, Blu-ray Players, and TVs, will count
1.3 billion subscribers by 2016 and will see revenues of up to $20
billion. That's according to two new reports from ABI Research.
Currently, Netflix is leading the way for OTT revenues. The research
credits Netflix with getting viewers to embrace long-form streamed
video on their TVs. Following Netflix are Apple iTunes and Hulu, which
each claim 15 percent of the current market.
Looking forward, the studies see OTT delivery having a strong impact
on how consumers watch TV.
"Content discovery is just one example of the rapidly changing
environment, with traditional program guides being supplemented by
search and recommendations," says Jason Blackwell, practice director
at ABI Research.
The pull of the OTT market will be so strong, that even traditional
online video sites will move to the living room.
"Over time, more viewing of YouTube and historically Internet-based
platforms will shift to the living room, opening up significant
advertising revenues. This trend will be accelerated based on
YouTube's recently announced increase in VOD content," notes senior
analyst Sam Rosen.
The reports are targeted at video operators and outlines strategies
for future growth. Titled "Over the Top (OTT) and Through the Middle
(TTM) Video" and "Broadband Video to Connected CE and Mobile Devices,"
they're available for purchase from ABI Research.
