The Future of TV According to NETFLIX

Reed Hastings of Netflix at NewTeeVee Live 2010 in San Francisco
Summary: TV is fundamentally changing from a linear delivery model to a world in which apps compete with each other, and Netflix is spending billions to be part of that future.

Netflix CEO Reed Hastings laid out an ambitious plan for Netflix’s future in a paper published on the company’s investor relations site Wednesday that paints Netflix as one of the driving forces behind a transition from linear television to a world of internet-delivered on-demand content.
The paper repeated some key points Hastings has made it the past, but also included a number of noteworthy new insights, including some data points on how Netflix spends its money.
Notably, Hastings said that Netflix is now spending over $2 billion a year on the licensing and creation of content. The company is spending another $350 million a year on improving its service and apps, including improvements to the streaming quality and customer service. And it is spending over $450 million per year on marketing in all of its markets around the world.
Here are some other key highlights of the paper:

On the future of TV

People love TV viewing, but they hate linear TV, including DVRs and cable VOD services, argued Hastings: “The linear TV channel model is ripe for replacement.” Stepping up to replace it are apps from companies like Netflix, HBO and ESPN, which deliver programming to multiple screens.
Technical advances, including 4k streaming and personalized advertising, will speed up the transition from linear TV to app-based on demand programming, and TV Everywhere will make it easier for cable networks to transition into this new world. And eventually, all of this will fundamentally change how TV is delivered, he said:

“Eventually, as linear TV is viewed less, the spectrum it now uses on cable and fiber will be reallocated to expanding data transmission. Satellite TV subscribers will be fewer, and mostly be in places where high-speed Internet (cable or fiber) is not available. The importance of highspeed Internet will increase.”

On Netflix’s focus

Hastings repeated in the paper that Netflix doesn’t want to compete with cable, but just wants to become one more channel — or app — for consumers to choose from. That also means that the company will focus on a few key areas, and for example not venture into ad-supported programming:

“We don’t and can’t compete on breadth with Comcast, Sky, Amazon, Apple, Microsoft, Sony, or Google. For us to be hugely successful we have to be a focused passion brand. Starbucks, not 7-Eleven. Southwest, not United. HBO, not Dish.”

For Hastings, this isn’t just about doing the things at which Netflix excels. It’s also about offering consumers a clear idea what they can expect from the service, which is key to get them to tune in to what he described as “moments of truth”:

“Those decision moments are, say, on Thursday 7:15 pm or Monday 2:40 am when our member wants to relax, enjoy a shared experience with friends and family, or is just bored. They could play a video game, surf the web, read a magazine, channel surf their MVPD/DVR system, buy a pay-per-view movie, put on a DVD, turn on Hulu or Amazon Prime Instant Video, or they could tap on Netflix. We want our members to choose Netflix in these moments of truth.”

On licensing

Hastings also shared some details about the company’s approach towards licensing, which has been shifting more and more towards exclusives. Data is guiding decisions on what to license, explained Hastings:

“We might pay, for example, $200,000 for a 4 year exclusive subscription video-on-demand (SVOD) license for a given title. At the time of renewal, we evaluate how much the title has been viewed as well as member rating feedback to determine how much we are willing to pay. How many similar titles we have is also a consideration.”

He didn’t mention it by name, but this reliance on data could be one of the reasons why Netflix decided to not renew a big licensing pact with Viacom. The company revealed earlier this week that its partnership with the cable programmer is about to expire in May. Netflix is now in discussions with Viacom to license individual shows instead.
The paper also pointed out that Netflix has fundamentally changed the licensing of TV shows in particular:

“It wasn’t easy for cable and broadcast networks to syndicate serialized storytelling to others, and we’ve pushed the price up considerably.”

On HBO

Hastings has long maintained that HBO is its biggest competitor. The company revealed Monday that it now has more domestic subscribers than the cable channel, and Hastings repeated in the paper that he wants to significantly outgrow HBO:

“We have more content, more viewing, a broader brand proposition, are on-demand, on all devices, and are less expensive, so we estimate that we can be 2 to 3 times larger than current linear-HBO, or 60-90 million domestic members.”

However, Hastings isn’t ready to count HBO out yet — and in fact argued that the competition from Netflix will actually help make HBO better as well:

“While we are passing HBO in domestic members in 2013, it will be several years before we are peers with them in terms of Original programming, Emmy awards, and international members. It wouldn’t be surprising to us if HBO does their best work and achieves their highest growth over the next decade, spurred on by the Netflix competition and the Internet TV opportunity.”

18 hours ago

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8 Ways to Use YouTube for Biz

8 Effective Ways to Use YouTube for Business

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At Sendible, we have recently added YouTube integration to augment the ever-growing list of channels already supported by our social media management tool. To celebrate our launch, here are 8 tips to help you make the most of YouTube for  marketing your business.
Video can be a very powerful tool for businesses of any size, but YouTube‘s free-to-use model, ease of use and mass market audience means it’s a great channel for small businesses. However, like any tool, in order to get the most of it, it needs to be used well.
1. Create a Branded YouTube Channel
This step is often overlooked by small businesses. Your YouTube channel is basically your house for the videos you create and upload, the videos you have selected as favorites, and those that you have organized into a playlist.
A customized channel gives you the opportunity to add and showcase your company’s branding with specific colors, information and links to your website and/or relevant social media pages. A channel also gives viewers an option to subscribe to your content with the click of a button.
2. Make Sure Your Content Fills a Relevant Need
At Sendible we aim to provide videos to helppeople effectively manage their Social Media activity. We post recordings of our join webinars with industry experts and screencasted how-to tutorials on using Sendible on a wide variety of topics such as; How to manage clients, automatically replying to people on Twitter and many more. By doing this you create valuable information and interest in you and your company thus generating loyalty and trust.
3. Develop Videos that are Quick, Simple, Engaging, and Professional
Decent video cameras are no longer expensive, so you can make a professional video without breaking the bank. Pay attention to lighting the area, sound quality and shakiness of the camera. Your best bet is to use a tripod. It is important to plan an outline and a script prior to making your video. Much like writing a story, you will want to include a beginning, middle and end. Make sure your video has a purpose. Keep it simple and short. It’s recommend 2-4 minutes for a video.
4. Optimize Your Video
According to Wikipedia, “In April 2011, James Zern, a YouTube software engineer, revealed that 30 percent of videos accounted for 99 percent of views on the site.” YouTube claims that more than 24 hours of video are uploaded every minute, so the number of specific videos on the site is constantly changing. It is important you do everything you can to make your video easily found.
Your videos should be findable both within and outside of YouTube. Videos often appear on the first page of search engines, and are a proven method of leap-frogging your competition to the top of the search results page. The fact that Google owns YouTube can’t be overlooked.
To make your video more findable, you’ll want to focus on three key areas (TDT):
-Title: Make sure your targeted keywords are in the first few words of your title. Another trick is to add a colon after your initial keywords and rephrase your title for maximum effect. For example, your video on saving money for college might be called “College Savings Plans: The 529 Plan and Your Child.”
-Description: Two things to keep in mind here: 1) start your description with a full URL, and 2) don’t be stingy with your description—more is… well, more. Be as descriptive and keyword-rich as possible. This will help you get found more easily by people searching YouTube for your type of content. You can also include more URLs throughout your content.
-Tags: Be sure to include any and all related keywords in the tags field.
These aren’t the only variables in getting found, but they’re the easiest to manage and control. Page views, subscribers, comments and likes can all affect your video’s visibility.
5. Participate With Others on YouTube
Spend time looking around on YouTube and make “friends.” Visit the competition and see what they are doing well and not doing so well. Engage with others on YouTube and they will in turn engage with you and your brand, which helps spread your information.
6. Share Your Videos in Other Places
Sendible can help you share your videos on your blog, tweets and Facebook page and many others. This is once again where your thumbnail, tags, title and keywords are important to further encourage interaction with your video and your brand. Videos are effective on Facebook landing pages welcoming people to your brand. Tweet the link of your newest video to your Twitter audience. Video blogs are becoming more and more popular.
7. Call to Action
Always include your company’s website address in the video as you want to give the viewers additional reasons to engage with your brand. Other ideas for calls to action might include: offering a contest, discount coupons, or instructional guides.
8. Measure
Sendible provides you with reporting and analytics tools, providing you with a quick snapshot look at the results of your video. The information is available within the My Reports section of your dashboard. You can track the number of views, the demographics of the viewers, and also how people found your video. Alongside all of your other social media analytics allowing you to make informed marketing decisions and measure the success of your Social Media Strategy.


Authored by:

Vishal Pindoriya

Sendible is an online marketing service for businesses and marketers to promote, grow and track their brands through the use of Social Media, Email and SMS messaging. Sendible is the easiest way to grow and build your brand online and is a one-stop-shop for all your marketing needs.

Netflix Watched More than Four Billion hours in Q1

 

 

 

Netflix users watched more than four billion hours of video in Q1

photo: Netflix
Summary: Netflix streamed more than four billion hours of movies and TV shows to its members in the first quarter of this year.

Looks as if House of Cards is starting to have an impact: Netflix members watched more than four billion hours of video during the first three months of 2013, according to the company’s CEO Reed Hastings, who took to Facebook to publish the milestone Thursday. Here’s Hastings’ post in its entirety:

“House of Cards fav quote: ‘look at the bigger picture.’ Over the last three months, you all watched over 4 billion hours on Netflix. Next up, some real monsters from Eli Roth…”

Hastings has in the past occasionally taken to Facebook  to reveal milestones like these. Most recently, he touted more than one billion hours streamed per month last July. However, that post got him in trouble with the S.E.C., with regulators investigating whether the CEO of a public company can release data like this on Facebook. In the end, the S.E.C. gave in, clearing the path for Hastings to drop further milestones on the social network.

18 hours ago

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The Future of Streaming Predictions for 2013

The future of streaming video – four predictions for 2013

streaming media
Summary: The streaming video industry continues to undergo radical transformation. Kun Gao, of Crunchyroll, points to four things to look for in the coming year.

Last week’s multi-year licensing agreement bombshell between Disney and Netflix was a capper to an already dynamic year for streaming media. Clearly we’re at an exciting crossroads, fueled by “make-ups and break-ups” that constantly reshape the industry. Given the activity of the last four quarters, here are a few things to look for in 2013.

Globalization of professional content

The act of taking premium content across borders to reach new audiences has proven to be a boon: It generates meaningful incremental digital dollars through subscription services;  it legitimizes a content experience that previously had been dominated by online piracy; and it builds momentum for content and brand equity for the coming years.
Ironically, it is the home market that sometimes moves the slowest. While not all territories are equally profitable, content is traditionally sold in a segmented manner siloed by language and country. Being able to slowly unfragment these rights through global expansion provides scale and future upside that is worth investing in today; this de-fragmentation will continue the efforts to globalize more professional content at an increased pace.

Monetization via subscription

Subscription will continue to be the dominant business model. Viewers have demonstrated that they recognize significant value in having access to premium content across their continuingly connected digital lifestyle – and are much more willing to pay for convenience of access on devices. This month’s retail activity showed all-time highs in consumer spending towards a personal device experience. Monolithic subscription services such as NetFlix and Hulu, which generate $8 ARPU per month, will be challenged in a market where DirecTV and DISH generate on average $80 ARPU per month.
What hasn’t changed is the demand for professionally produced content, which still costs just as much to create. Today’s market data has proven that users are willing to pay top dollar for traditional Hollywood quality content – but a mere $8 a month simply isn’t enough to support creating it in the same volume as we do now. One of the ways to reach a happy medium then is through targeted channels of in-depth content.

Channels of in-depth content

Channels will become much more targeted and personalized. Over 60 years ago, broadcast television introduced channels 1-10 in the U.S., and, furthering this momentum, channelization provided channels 11-1,000 via cable and satellite in the 1980s. As this decade is earmarked by seismic technology and media changes, the next few years will be laser-focused on creating the next 100,000 channels – delivered across a mix of broadcast, cable, mobile and smart TV apps – each tailored for a set of unique lifestyles.
Do you enjoy fly-fishing, building replica battleships, or perfecting your Portuguese? The next 100k channels are all about delivering a deep and targeted experience that was previously not possible, because the audience was fragmented geographically, the high fixed costs of creating a new cable channel were prohibitive, or the behavioral targeting was not possible. Viewers of highly targeted and in-depth content experiences are more than willing to dive in and pay.  These experiences are much more than simple online video delivery and make up a unique social and lifestyle experience.

Redefining e-commerce

There will be significant progress made towards a new monetization model beyond the traditional ad-supported and subscription service ones. The American household spends, on average, nearly five hours per day watching video content. As such it is one of the best methods we know for generating product interest.
However, the one-way push model also happens to be grossly inefficient. Online streaming has the opportunity to revolutionize the way products accompany content, and are ultimately introduced to viewers. The opportunities are boundless when one thinks of how awesome an experience it would be if we can realize the full potential of combining streaming video and e-commerce – a next-generation Home Shopping Network layered on top of any content. After all, what is video but a medium for the aspiration of product, lifestyles and experiences?
Kun Gao is CEO and co-founder of Crunchyroll, Inc., a global video network for Japanese anime and Asian media.

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