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Netflix to include online download
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Posted by: HDTiVo

HOT OFF THE WIRE PORTFOLIO NEWS - from Lycos Finance

(NASDAQ:AMZN) Amazon.com, Inc., (NYSE:WMT) Wal Mart Stores,
(NYSE:BBI) Blockbuster Inc, (NASDAQ:NFLX) Netflix, Inc. (UPC)

UPDATE 1-Netflix CEO sees $1 bln in revenue in 2006
- Feb 26, 2004 01:28 PM (Reuters)
- http://finance.lycos.com/home/news/...?story=40697634

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====================

(Adds details, paragraphs 4-9)

LOS ANGELES, Feb 26 (Reuters) - Chief Executive Officer Reed
Hastings of online DVD renter Netflix Inc. (NASDAQ:NFLX), said on
Thursday the company thinks it will reach $1 billion in revenue
in 2006, advancing forecasts for that sales level by one year.

"We are confident we will hit $1 billion in revenue in
2006, so that's pulling in the guidance by another year in
terms of when we will hit the billion in revenue," he told
analysts and reporters during a presentation in San Jose.

Previously the company had said it expected to reach $1
billion in revenue during 2006 to 2007.

Netflix shares gained 7.6 percent, or $2.37, to trade
around $33.48 by midday on the Nasdaq stock market.

Hastings also repeated past statements that Netflix plans
to move into movie downloading as a supplement to its current
business of renting DVDs to clients for a fee of $20 a month.

He said the percentage of the downloading business "is
going to look small, and its probably a little early to enter"
the marketplace, but the company wants to stay ahead of
competition in order to maintain a growing business.

While much of the competitive focus for Netflix has been on
video renter Blockbuster Inc. (NYSE:BBI) and Wal-Mart Stores Inc
(NYSE:WMT), Hastings was more concerned about the possibility of
online retailer Amazon.com Inc. (NASDAQ:AMZN).

He added that currently Amazon.com has not said whether it
might enter the online DVD rental business, and repeated past
statements that significant competition from Blockbuster and
Wal-Mart has yet to materialize.

Chief Marketing Officer Leslie Kilgore also repeated earlier
statements that despite a rising amount of television advertising
Netflix plans to utilize, the company plans to limit overall
marketing spending to around $35 for each new subscriber it
attracts.

The company's goal is to "grow rapidly but limit spending to
$35 per new subscriber," Kilgore said.

To do that, Netflix will constantly adjust the advertising
mix of channels on which it spends money, such as online,
point-of-purchase promotions, and other forms of marketing.

Posted by: Rcrew

What's the technical aspect of the download on demand?

Will this be a burnable image?

Posted by: SWFan

I'm surprised they are going that route. I remember Leo LaPorte interviewing the founder and the guy really sounded like downloading was not feasible and that the "badwidth" of sending a DVD via snail mail far exceeds the actual bandwidth capability of consumer broadband.

The only implementation that I think would make sense is a stream type deal. Thus you're stuck running it through a computer with all the limitations that brings of user friendliness and interfacing.

Posted by: HDTiVo

>The only implementation that I think would make sense is a stream type
>deal.

I don't understand your conclusion. Streaming would be the most bandwidth demanding option possible. Furthermore, why would a computer not need to be involved with another method, in your vision.

Finally, why would this service need a computer when any DVR (or similar device) can be designed (and most are already) to connect to the internet themselves?

Posted by: ZeoTiVo

the way I would like this to work --

TiVo and NetFlix work a service together

I have a queue I manage on a web page to select new movies and put them in order to view.

I have a 3 at a time subscription. so yes the first three take some time to download to my TiVo :)

after I watch a movie and delete it though, there are still two more to watch while the next one downloads in the background. As I tend to watch one movie a night at most I don't care if it takes 24 hours for the next one to fully downlaod ;) Plus remember there is no mail back time this way as I simply deleted it from the TiVo drive.

in fact I would be estactic if every single DVDisc only had an exact 24 hour turnaround with Netflix through the postal mail.

so bottom line - if Netflix/TiVo can handle the cost of setting up the server farms and bandwidth and still offer a reasonable subscription at various levels then this service would rock and make TiVo SHINE:up: :up: :up: :up:

Posted by: smark

It would be smarter to partner with cable systems OnDemand service as the bandwidth there is much greater.

Posted by: ZeoTiVo

quote:
Originally posted by smark
It would be smarter to partner with cable systems OnDemand service as the bandwidth there is much greater.

but again - they do not want to stream the show -- just copy it down to my hard drive - then TiVo has it on my TV no sweat.

I may want to leave a movie on my hard drive for 4 weeks and watch it over and over - (i have kids) once it is on my hard drive there is no more drain on their system. and I BIG TIME do NOT want to have to watch it within a set time period like 24 hours before it is expired. That and the price it waht killed movielink for me.

now if you mean -- use a cable channel to copy the movie down to the hard drive - then yah, maybe so. I do not know much about on demand setup to know. anyhow I have a cable modem so I am already as good as downloading it on a cable channel :D

Posted by: SWFan

quote:
Originally posted by HDTiVo
>The only implementation that I think would make sense is a stream type
>deal.

I don't understand your conclusion. Streaming would be the most bandwidth demanding option possible. Furthermore, why would a computer not need to be involved with another method, in your vision.

Finally, why would this service need a computer when any DVR (or similar device) can be designed (and most are already) to connect to the internet themselves?

My conclusion is based on the industry always going the route of the lowest common denominator. In this case, industry thinks having content on a person's local computer = bad, thus streaming (even though you could still capture it if you're in the know) would prevail. The only way I see downloads being an option is if Netflix provides the box with the HD in it. I just don't see them letting any old computer download content where they may lose copyright holder control.

And yes, I realize streams are no more safe, but its the industry's perception that it is. Just like DVD encryption doesn't mean squat if you know what you're doing, yet they continue to put it on every DVD made.

Does anyone think they will take DVD's and compress them further to save on download time?

Posted by: HDTiVo

Ah, I see. You meant from a business decision on the part of the content producers perspective. I thought you were making a technology statement.

>I just don't see them letting any old computer download content where
>they may lose copyright holder control.

Unlike mailing a DVD which could not possibly be ripped to your computer's hard drive and copied. ;)

Seriously, look at it this way. DVD encryption is worthless now. Imagine that one could download a movie encrytped with a far more advanced - and as yet unbroken - copy protection scheme. Furthermore, imagine that the copy protection scheme could be replaced with a new - unbroken - one at any time. Now wouldn't it be in the content provider's interest to prefer that mode of delivery over DVD?

Posted by: Peter000

I can't imagine Netflix downloading a movie at DVD specs. Most movies run 3-4 gigs and higher. More likely they'll download it to your computer in Mpeg 4, or DiVX. Not quite DVD quality, but still quite watchable. And they'd be getting into the fledgling portable multimedia player market, which I'm sure they have their eye on.

Posted by: PrimeRisk

quote:
Originally posted by SWFan
I'm surprised they are going that route. I remember Leo LaPorte interviewing the founder and the guy really sounded like downloading was not feasible and that the "badwidth" of sending a DVD via snail mail far exceeds the actual bandwidth capability of consumer broadband.

The only implementation that I think would make sense is a stream type deal. Thus you're stuck running it through a computer with all the limitations that brings of user friendliness and interfacing.

With devices like Gateway's Connected DVD Player the options for hooking up directly to the 'net or to a computer you have are pretty limitless. Of course it would be awesome if Netflix partnered with TiVo to deliver this service...

Posted by: MighTiVo

We set up "season passes" far in advance of programs coming on TV, what is the difference in setting up a "movie pass" far enough in advance that it could be trickled down to the TiVo over a number of days and be ready to play on Friday or Saturday night?

Posted by: SWFan

quote:
Originally posted by HDTiVo
Seriously, look at it this way. DVD encryption is worthless now. Imagine that one could download a movie encrytped with a far more advanced - and as yet unbroken - copy protection scheme. Furthermore, imagine that the copy protection scheme could be replaced with a new - unbroken - one at any time. Now wouldn't it be in the content provider's interest to prefer that mode of delivery over DVD?

Well, they could go the route that the entertainment industry has been pushing for DTV/HDTV signals, which is the signal won't be readible/playable by anything that doesn't have a pre-approved chip in it. I'm sure there would be further protections to prevent those with the required chip from further copying the content.

Posted by: ZeoTiVo

quote:
Originally posted by SWFan
Well, they could go the route that the entertainment industry has been pushing for DTV/HDTV signals, which is the signal won't be readible/playable by anything that doesn't have a pre-approved chip in it. I'm sure there would be further protections to prevent those with the required chip from further copying the content.

yes - it is the hardware that is key here to making the download to a home user feasible from abusiness/copyright perspective. Since we are talking NetFlix and movies that have done their theater run and pay per view run and are now being released on DVD now; than a standard encryption like a DVD has is all they really need to feel safe in releasing the content.

edit - I did not mean "encryption like a DVD has" but the copying block that keeps you from just making an image of a DVD to share. (unless you buy 30$ software to break the anitcopy scheme ;) )

a TiVo box has that encryption in it and TiVoToGo as the design has been designated so far , will not give you unencrypted until the content is on a DVD. Actually the design of TiVoToGo is starting to make sense to me and fits right into this, hopefully, connection between NetFlix and TiVo to provide download movies onto a series 2 with its encrypted content. Sure all this can be broken and content made ready for open file sharing. But it is more than the average person would want to have to do and it is made a clear violation of DMCA as encryption would have to be deliberately broken.

as for me, I would not feel a need to unencrypt any of this as all I want is Movies to download as they are released into the rental stream and an easy way to take them on a portable device like my laptop or a TAZ 1

Posted by: HDTiVo

1. A two hour movie downloading in 24hrs is a 1:12 ratio.

Worst case, a DSL connection should sustain at least 250kb/sec transfer in the real world over a long period. That's about 1:20 with a 5mb/sec DVD encoding average.

So a different codec and a little sacrifice in quality can get you NetFlix DSL.

No sweat to also offer NetFlix Cable at full DVD quality, at user's option.

2. TiVo, for example, already has a pretty good encryption scheme to prevent pirating. Use a better one, and change it from time to time and NetFlix Online will experience very little pirating/ripping.

BTW the HDCP equipped DVI/HDMI interfaces have the "ability" to receive a "virus"-like signal which would disable them should encryption keys be compromised.