... [Netflix CEO Reed] Hastings is hedging his bets by expanding Netflix into niches that will help it maintain an edge as new rivals emerge. He's positioning it as a film investor and source of high-quality content -- like Home Box Office for DVD rentals. He also wants to be a player in Web distribution, which it will launch by yearend even though Hastings thinks the market for downloading will be tiny for years. ...
Ken Belson writes: "... But movies are only one front in the format war. In throwing its weight behind Toshiba, Microsoft has expanded the fight into the computer and game industries. Later this year, Microsoft will start selling an external drive for its Xbox game that will play HD-DVD discs, countering Sony's effort to turn PlayStation into a high-definition DVD player by adding Blu-ray technology. Microsoft and its ally Intel have also convinced Hewlett-Packard to consider making HD-DVD drives for computers. This would give Toshiba an answer to Dell, which remains committed to the Blu-ray format. ..." Link: New York Times. This is the best overview of the Blu-ray/HD-DVD format war that I've found. --Dennis
David Schatsky writes: "... Consumers increasingly expect to be able to consume media when and where they want, on any platform or device, in any context. The technology and media industries are beginning to oblige them. Fragmentation is both a cause and effect, creating a cycle in which fragmented audiences lead to fragmented content, which allows audiences to fragment further, and so on. ¶ These changes will threaten established practices and entrenched interests in the media and advertising sectors, but consumers will benefit and ultimately, companies that can ride this wave will benefit as well. They have no choice. Take movies: Nearly 100% of the growth in movie industry revenues over the last 50 years has come from new markets, such as home video, and new platforms, such as DVD. ..." Link: Jupiterresearch. Thanks to Terry Heaton for the tip. --Dennis
Anthony Crupi writes: "... According to a recent study commissioned by Starz Entertainment Group, 70 percent of TV viewers who use the Starz on Demand VOD service said that they no longer go to the video store to rent movies. Likewise, 72 percent of Starz subscribers reported that they rented DVDs less frequently than before they signed on for the VOD service. ..." Link: Mediaweek.
Junko Yoshida writes: "... Several industry sources last week told EE Times that Microsoft is muscling into the optical-disk fray by leveraging its operating-system clout to bundle HD-DVD within Vista, the company's next-generation OS. There is also talk that the software giant may be planning to offer cash incentives — in the form "coupons" — to system vendors or retailers if they agree to support HD-DVD. Such coupons would provide "credits" or "memos" for each PC that is sold with HD-DVD inside. ..." Link: EE Times via Digital TV Design Line.
Dave Zatz writes: "Netflix has run into the studio brick wall. At this point the studios have very little incentive to move their media via third-party download: DVD sales are a huge cash cow and they own existing services Movielink and CinemaNow. ..." Link: Zatz Not Funny.
John Anderson writes: "... So what about more general fare with no stars, budgets or hope? That's where IndieFlix, founded by Ms. Andreen and her business partner, the filmmaker Gian-Carlo Scandiuzzi, comes in. Directors submit their films, which are then posted on the Web site (www.indieflix.com). When users log on and click to buy the films that capture their interest, IndieFlix burns them onto a DVD and ships them out. The price for a feature-length film is $9.95. ..." Link: New York Times.
Ben Fritz writes: "A year after it slashed prices in an aggressive move to hold off competitor Blockbuster, Netflix is moving in for the kill. ¶ Third-quarter earnings reported Wednesday showed Netco is continuing to boom, surging ahead of its nearest competitor on the Net and directly challenging those in the non-virtual world as well. ¶ Rather than taking the opportunity to raise prices and focus on profits, Netflix is looking to use its position to put the permanent kibosh on remaining challengers. CEO Reed Hastings said company will test further price cuts over the next six months to see if it can accelerate growth further without sacrificing margins. ..." Link: Variety.