Netflix ..... No Love for Blu-Ray - Blu-ray Forum

Grant Matrix · 09-17-2008, 12:48 PM

Netflix CFO downplays Blu-ray effect
DVDs to remain primary content format
By Danny King -- Video Business, 9/15/2008
SEPT. 15 | Netflix chief financial officer Barry McCarthy said today that Blu-ray adoption is unlikely to have a significant impact on the retailer’s sales in the near future. He said the company will continue to ship DVDs to its subscribers for as many as another 10 years.

He also said that Netflix was fortunate that its August shipment delay for more than two days occurred during a relatively slow rental period because of the Olympics. McCarthy added that demand for Netflix video-streaming would outpace competing services such as Amazon.com’s video-on-demand offering despite a smaller inventory of titles.

Netflix, which estimated in July that less than 10% of its subscribers order Blu-ray titles, will be little affected by Blu-ray demand until at least next year despite more high-definition disc players being released and a studio push for Blu-ray sales, McCarthy said at a Bank of America investor conference in San Francisco.

“I don’t anticipate a big impact” on Netflix sales, said McCarthy, who estimated that the Blu-ray player prices won’t fall below the $300 mark for at least a year. “Consumer adoption has been slow.”

McCarthy also said that as the company tries to build on its 8.4 million subscriber base by adding streaming services, DVD will remain the primary movie distribution device for at least another five years, because, unlike the DVD player, there is no single standard system for digital delivery. He also said that Netflix’s strategy of offering unlimited viewing of its packaged and digital titles will generate more demand than competing a la carte digital-rental services such as the VOD service Amazon launched earlier this month. That service offers about 40,000 titles, or more than triple Netflix’s digital titles.

“In early 1999, we were an a la carte business, and we were quickly going out of business,” said McCarthy. “The value of unlimited viewing trumps the broader selection of content in an a la carte world.”

Last month, Netflix, the largest movie-rental service via mail, delayed shipments to about 15% of its customers for more than two days because of technology issues, marking the second large shipping outage in five months.

“Fortunately for us, it did happen during the Olympics,” said McCarthy, who added that all effected subscribers were given credit for the days shipments were missed. “The effect on our brand could’ve been much worse.”

http://www.videobusiness.com/index.a...leid=CA6596359

Grant Matrix · 09-17-2008, 12:52 PM

This certainly explains why there are such insane wait times on BDs. I know Netflix said that they were increasing their volume of BD titles but I have think it was all BS at this point. Rambo sat in my queue on very long wait for over two months. They are not doing what they need to do as far getting inventory up and now that they are in bed with M$, the company that wants to kill all ownership of all media so that they can make a dollar two evertime you watch a movie or TV show. They don't think that Blu is really contribuing to their revenue, but wait until they implement their BD price increase. I certainly am not paying a price increase just so I can wait a month or two to watch the movies I want to watch.

Blu Titan · 09-17-2008, 01:03 PM

Blu-ray standalone prices (for some models) have already "fallen" below $300. Somebody should wake up.

Red Hood · 09-17-2008, 01:03 PM

I was just thinking about joining netflix too.

saginawjuggalo · 09-17-2008, 01:09 PM

They also said at one point HD DVD was being rented more then Blu-ray. This reminds me of the days when DVD first started gaining steam... The owners/workers of video stores down played DVD. They don't want to waist money on DVD only to have it go the way of VHS. I myself DON'T feel DVD is going anywhere but I do feel Blu-ray will keep growing, so Netflix better get in the swing of things NOW!

u_nick · 09-17-2008, 01:10 PM

They hurt themselves with the Blu-ray thing by charging extra. I know I certainly switched my Netflix account back to standard when they started charging. And I bet I'm not the only one. Work the Blu-ray thing into the regular monthly cost, and I guarantee their blu-ray enabled accounts at LEAST double.

originalstarlite · 09-17-2008, 01:15 PM

Nobody talks about Blockbuster Blu Ray shipping, only Netflix. Does BB do it any better for delivery waits?

Since I am not getting BD shipments, this is a true info query.

johnarnold101 · 09-17-2008, 01:26 PM

I still don't understand the Netflix bashing. Since Netflix started carrying blu-ray I have never had a problem getting a movie the day it was released. If you don't put it in your queue before the release date then you should expect a wait just like with new release standard DVD's. It is no different then my local Blockbuster or any other rental shop, you wait if you don't get it on the release date.

I got the Fall and Forbidden Kingdom in my mailbox last Tuesday....the day they were released. I didn't get one back in time for this weeks releases so I'm on a "long wait" now for Speed Racer...my fault.

Marine Mike · 09-17-2008, 01:32 PM

Quote:

Originally Posted by johnarnold101

I still don't understand the Netflix bashing. Since Netflix started carrying blu-ray I have never had a problem getting a movie the day it was released. If you don't put it in your queue before the release date then you should expect a wait just like with new release standard DVD's. It is no different then my local Blockbuster or any other rental shop, you wait if you don't get it on the release date.

I got the Fall and Forbidden Kingdom in my mailbox last Tuesday....the day they were released. I didn't get one back in time for this weeks releases so I'm on a "long wait" now for Speed Racer...my fault.

I've had Dark City in my queue weeks before its release and I still have yet to receive it. And yes, theres always been an open spot. Please keep in mind that this is just ONE example.

johnarnold101 · 09-17-2008, 01:36 PM

Quote:

Originally Posted by Marine Mike

I've had Dark City in my queue weeks before its release and I still have yet to receive it. And yes, theres always been an open spot. Please keep in mind that this is just ONE example.

I'm sure there are good examples and bad, just my dealings have been good. I've also always lived close to a hub and now I'm in the same city as one.

Chupacabra · 09-17-2008, 01:56 PM

He should read this:
http://www.cepro.com/article/average...product_index/

Grant Matrix · 09-17-2008, 02:01 PM

Quote:

Originally Posted by Marine Mike

I've had Dark City in my queue weeks before its release and I still have yet to receive it. And yes, theres always been an open spot. Please keep in mind that this is just ONE example.

Same with me on Dark City. It is the one movie I want to see most becuase I never saw it before.

PSA1 · 09-17-2008, 02:13 PM

Screw Netflix, support those that help us win the war, Blockbuster did, and I have no problem with them, and their in store exchange program is great.

jdc115 · 09-17-2008, 02:28 PM

But this is mostly for their investors. Most likely they are not gaining enough new accounts due to BD to justify the increase cost to their bottom line.

It purely is a business decision to charge more for BD as it is is probably hurint their overall returns. Maybe Blockbuster does better as far as quicker turn around but they are also a financial mess which means they probably can not keep doing it for long.

Bluray_ne1 · 09-17-2008, 02:28 PM

Quote:

Originally Posted by Chupacabra

He should read this:
http://www.cepro.com/article/average...product_index/

Geez. All along the economic pundits have been saying that full consumer adoption of the format won't occur until the price drops into the $200-$300 range. Now they make it sound like a drop in price is a bad thing, as though it will mark the impending doom of Blu-Ray.

The fact is, especially in tough economic times, most folks aren't going to be dropping $399 for a BD player. If the electronics manufacturers want to sell players, they have to drop the price. When they drop the price, folks will start buying. And buying BD players means more sales of discs.

Grant Matrix · 09-17-2008, 02:49 PM

I think it's the price of movies and not the price of players that is really holding back widespread adoption. $300 for a Blu-ray player is not an outrageous sum although it is definitely somewhat of a luxury item with the economy in the downward spiral. But the average consumer is NOT going to plunk down $30-35 for a movie that can be bought on SD for $10-20. High movie prices coupled with the lack of large Blu rental supply is more than enough to discourage those thinking of upgrading. There is no doubt that there will be a massive Blu surge this holiday season with a lot of predictions of doorbuster Black Friday deals pricing in around $100. Even if player purchses do surge I still think movie sales remain somewhat flat due to the price with the expcetion being the big Hollywood blockbusters. It will be very intersting to see what happens this holdiay season.

Bluray_ne1 · 09-17-2008, 03:04 PM

Quote:

Originally Posted by Grant Matrix

I think it's the price of movies and not the price of players that is really holding back widespread adoption. $300 for a Blu-ray player is not an outrageous sum although it is definitely somewhat of a luxury item with the economy in the downward spiral. But the average consumer is NOT going to plunk down $30-35 for a movie that can be bought on SD for $10-20. High movie prices coupled with the lack of large Blu rental supply is more than enough to discourage those thinking of upgrading. There is no doubt that there will be a massive Blu surge this holiday season with a lot of predictions of doorbuster Black Friday deals pricing in around $100. Even if player purchses do surge I still think movie sales remain somewhat flat due to the price with the expcetion being the big Hollywood blockbusters. It will be very intersting to see what happens this holdiay season.

Your point is well taken. The cost of Blu-Ray discs is still way too high. But I also think that regardless of disc price, if someone is willing to pay for the player, they're going to want some movies to go with it. They may only buy one or two, but it will still generate some disc sales.

Red Hood · 09-17-2008, 03:04 PM

So hate to threadjack but if you were going to do one of these services today which one would it be?

mgw4jc · 09-17-2008, 03:41 PM

I just got a blu-ray player about 2 weeks ago. The deal at Best Buy included 3 free movies (Night at the Museum, Invincible & 50 First Dates) and I bought 3 more (Nim's Island, Transformers, Blue Planet). Of those I only already owned NatM. I already have my favorites on standard DVD and I'm not planning on replacing any time soon, especially with the BD prices (though I did cave and bought the Pirates trilogy on BD last night).

So to enjoy BD movies I signed up for Netflix (not a member previously). They charged me the $13.99 + tax membership and I added the blu-ray option (no extra charges yet). I got my first 2 Blu-Ray discs right away and they are shipping my next 2 today. I'm thinking this is a good way to enjoy BD without racking up $100+ in movies purchases per month.

I do like Blockbuster's in store exchange deal, but haven't done enough price calculations to see if it would be worth it. I work at home and even though I have a Blockbuster store less than 2 miles away I don't always get out enough to go by there and do the exchange. I plan to figure it out more soon and may switch to BB as I'm currently on a trial with Netflix and could still cancel.

aramis109 · 09-17-2008, 03:46 PM

So far, I'm on my 3rd month of BB online, and I really like it. It's best to really jump on new release BD's because they can get snapped up pretty quickly, but between online and in-store trades I've gotten to see nearly every new release I've wanted to of late. I have a lot of "long/very long" wait titles, which sucks, but I have enough available titles it hasn't been an issue.

I'm paying $19.99 a month for 3 out a time/unlimited rentals and 5 in-store trades a month. I bring a movie back to the store every few days on the way home from work, to the degree that they all know me (in both the stores I frequent) by now.

I feel it's a good deal for now. I may change my mind once I've seen everything I want.

09-17-2008, 12:48 PM	#1
Grant Matrix Banned Member since:Dec 2007 Blu-ray reviews:4 Trading Score:1	Netflix ..... No Love for Blu-Ray Netflix CFO downplays Blu-ray effect DVDs to remain primary content format By Danny King -- Video Business, 9/15/2008 SEPT. 15 \| Netflix chief financial officer Barry McCarthy said today that Blu-ray adoption is unlikely to have a significant impact on the retailer’s sales in the near future. He said the company will continue to ship DVDs to its subscribers for as many as another 10 years. He also said that Netflix was fortunate that its August shipment delay for more than two days occurred during a relatively slow rental period because of the Olympics. McCarthy added that demand for Netflix video-streaming would outpace competing services such as Amazon.com’s video-on-demand offering despite a smaller inventory of titles. Netflix, which estimated in July that less than 10% of its subscribers order Blu-ray titles, will be little affected by Blu-ray demand until at least next year despite more high-definition disc players being released and a studio push for Blu-ray sales, McCarthy said at a Bank of America investor conference in San Francisco. “I don’t anticipate a big impact” on Netflix sales, said McCarthy, who estimated that the Blu-ray player prices won’t fall below the $300 mark for at least a year. “Consumer adoption has been slow.” McCarthy also said that as the company tries to build on its 8.4 million subscriber base by adding streaming services, DVD will remain the primary movie distribution device for at least another five years, because, unlike the DVD player, there is no single standard system for digital delivery. He also said that Netflix’s strategy of offering unlimited viewing of its packaged and digital titles will generate more demand than competing a la carte digital-rental services such as the VOD service Amazon launched earlier this month. That service offers about 40,000 titles, or more than triple Netflix’s digital titles. “In early 1999, we were an a la carte business, and we were quickly going out of business,” said McCarthy. “The value of unlimited viewing trumps the broader selection of content in an a la carte world.” Last month, Netflix, the largest movie-rental service via mail, delayed shipments to about 15% of its customers for more than two days because of technology issues, marking the second large shipping outage in five months. “Fortunately for us, it did happen during the Olympics,” said McCarthy, who added that all effected subscribers were given credit for the days shipments were missed. “The effect on our brand could’ve been much worse.” http://www.videobusiness.com/index.a...leid=CA6596359

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09-17-2008, 12:52 PM	#2
Grant Matrix Banned Member since:Dec 2007 Blu-ray reviews:4 Trading Score:1	This certainly explains why there are such insane wait times on BDs. I know Netflix said that they were increasing their volume of BD titles but I have think it was all BS at this point. Rambo sat in my queue on very long wait for over two months. They are not doing what they need to do as far getting inventory up and now that they are in bed with M$, the company that wants to kill all ownership of all media so that they can make a dollar two evertime you watch a movie or TV show. They don't think that Blu is really contribuing to their revenue, but wait until they implement their BD price increase. I certainly am not paying a price increase just so I can wait a month or two to watch the movies I want to watch.

09-17-2008, 01:03 PM	#3
Blu Titan Super Moderator Top ranked HT gallery Top contributor Member since:Jul 2007 Location:Edo, Land of the Samurai Home Theater Gallery:42 4K collection:41 Blu-ray collection:2864 Blu-ray reviews: 2 Trading Score:92	Blu-ray standalone prices (for some models) have already "fallen" below $300. Somebody should wake up.

09-17-2008, 01:03 PM	#4
Red Hood Blu-ray Samurai Member since:Jul 2008 Blu-ray collection:33	I was just thinking about joining netflix too.

09-17-2008, 01:09 PM	#5
saginawjuggalo Power Member Top contributor Member since:Nov 2007 Location:Saginaw, Michigan 4K collection:167 Blu-ray collection:2058 DVD collection:85 iTunes collection:1 Trading Score:2	They also said at one point HD DVD was being rented more then Blu-ray. This reminds me of the days when DVD first started gaining steam... The owners/workers of video stores down played DVD. They don't want to waist money on DVD only to have it go the way of VHS. I myself DON'T feel DVD is going anywhere but I do feel Blu-ray will keep growing, so Netflix better get in the swing of things NOW!

09-17-2008, 01:10 PM	#6
u_nick Blu-ray Samurai Member since:Jan 2007 Location:CT, US Trading Score:27	They hurt themselves with the Blu-ray thing by charging extra. I know I certainly switched my Netflix account back to standard when they started charging. And I bet I'm not the only one. Work the Blu-ray thing into the regular monthly cost, and I guarantee their blu-ray enabled accounts at LEAST double.

09-17-2008, 01:15 PM	#7
originalstarlite Junior Member Member since:Aug 2008 Location:Canonsburg, PA (Steeler Country)	Nobody talks about Blockbuster Blu Ray shipping, only Netflix. Does BB do it any better for delivery waits? Since I am not getting BD shipments, this is a true info query.

09-17-2008, 01:26 PM	#8
johnarnold101 Senior Member Member since:May 2008 Location:Boise, ID Home Theater Gallery:2 Blu-ray reviews: 2 Trading Score:13	I still don't understand the Netflix bashing. Since Netflix started carrying blu-ray I have never had a problem getting a movie the day it was released. If you don't put it in your queue before the release date then you should expect a wait just like with new release standard DVD's. It is no different then my local Blockbuster or any other rental shop, you wait if you don't get it on the release date. I got the Fall and Forbidden Kingdom in my mailbox last Tuesday....the day they were released. I didn't get one back in time for this weeks releases so I'm on a "long wait" now for Speed Racer...my fault.

09-17-2008, 01:56 PM	#11
Chupacabra Active Member Member since:Aug 2007 Home Theater Gallery:4 Blu-ray collection:13	He should read this: http://www.cepro.com/article/average...product_index/

09-17-2008, 02:13 PM	#13
PSA1 Member Member since:Sep 2007	Screw Netflix, support those that help us win the war, Blockbuster did, and I have no problem with them, and their in store exchange program is great.

09-17-2008, 02:28 PM	#14
jdc115 Special Member Top ranked HT gallery Member since:Jul 2007 Location:Singapore Home Theater Gallery:7 Blu-ray collection:87	But this is mostly for their investors. Most likely they are not gaining enough new accounts due to BD to justify the increase cost to their bottom line. It purely is a business decision to charge more for BD as it is is probably hurint their overall returns. Maybe Blockbuster does better as far as quicker turn around but they are also a financial mess which means they probably can not keep doing it for long.

09-17-2008, 02:49 PM	#16
Grant Matrix Banned Member since:Dec 2007 Blu-ray reviews:4 Trading Score:1	I think it's the price of movies and not the price of players that is really holding back widespread adoption. $300 for a Blu-ray player is not an outrageous sum although it is definitely somewhat of a luxury item with the economy in the downward spiral. But the average consumer is NOT going to plunk down $30-35 for a movie that can be bought on SD for $10-20. High movie prices coupled with the lack of large Blu rental supply is more than enough to discourage those thinking of upgrading. There is no doubt that there will be a massive Blu surge this holiday season with a lot of predictions of doorbuster Black Friday deals pricing in around $100. Even if player purchses do surge I still think movie sales remain somewhat flat due to the price with the expcetion being the big Hollywood blockbusters. It will be very intersting to see what happens this holdiay season.

09-17-2008, 03:04 PM	#18
Red Hood Blu-ray Samurai Member since:Jul 2008 Blu-ray collection:33	So hate to threadjack but if you were going to do one of these services today which one would it be?

09-17-2008, 03:41 PM	#19
mgw4jc New Member Member since:Sep 2008	I just got a blu-ray player about 2 weeks ago. The deal at Best Buy included 3 free movies (Night at the Museum, Invincible & 50 First Dates) and I bought 3 more (Nim's Island, Transformers, Blue Planet). Of those I only already owned NatM. I already have my favorites on standard DVD and I'm not planning on replacing any time soon, especially with the BD prices (though I did cave and bought the Pirates trilogy on BD last night). So to enjoy BD movies I signed up for Netflix (not a member previously). They charged me the $13.99 + tax membership and I added the blu-ray option (no extra charges yet). I got my first 2 Blu-Ray discs right away and they are shipping my next 2 today. I'm thinking this is a good way to enjoy BD without racking up $100+ in movies purchases per month. I do like Blockbuster's in store exchange deal, but haven't done enough price calculations to see if it would be worth it. I work at home and even though I have a Blockbuster store less than 2 miles away I don't always get out enough to go by there and do the exchange. I plan to figure it out more soon and may switch to BB as I'm currently on a trial with Netflix and could still cancel.

09-17-2008, 03:46 PM	#20
aramis109 Blu-ray Ninja Member since:Mar 2008 Location:Milwaukee, WI Home Theater Gallery:10 4K collection:4 Blu-ray collection:360 Trading Score:18	So far, I'm on my 3rd month of BB online, and I really like it. It's best to really jump on new release BD's because they can get snapped up pretty quickly, but between online and in-store trades I've gotten to see nearly every new release I've wanted to of late. I have a lot of "long/very long" wait titles, which sucks, but I have enough available titles it hasn't been an issue. I'm paying $19.99 a month for 3 out a time/unlimited rentals and 5 in-store trades a month. I bring a movie back to the store every few days on the way home from work, to the degree that they all know me (in both the stores I frequent) by now. I feel it's a good deal for now. I may change my mind once I've seen everything I want.

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