Netflix Turns Focus Back to Disc

[Wendell R. Breland]

Also, we have the 3 Blu-ray Disc at a Time Netflix by Mail plan. Anyone (US) can sign up here.

[raygendreau]

Netflix will probably attempt to sell the physical disc rental business sooner rather than later, while it still has some value. The rapidly declining subscriber base is the primary reason.

http://news.investors.com/technology...ess-wither.htm

[Steedeel]

They tried that once. Public said 'no'.

[rickah88]

Originally Posted by raygendreau

Netflix will probably attempt to sell the physical disc rental business sooner rather than later, while it still has some value. The rapidly declining subscriber base is the primary reason.

http://news.investors.com/technology...ess-wither.htm

I hope they do, to someone who really cares about disc rentals. Several million subscribers is a nice chunk of dough. So win/win either way!

[raygendreau]

Originally Posted by rickah88

So? The thread is what the thread is, not what you feel you should make it. That's commonly referred to as: Derailing.
This thread is about disc rental and the posts should be about disc rental, not about streaming. There are Netflix streaming threads for those kind of posts.
Not sure how that became so difficult?

The thread is about the company's focus. They are closing distribution centers and are managing the decline of physical disc rental, which has been cut in half in just a few years.

[rickah88]

Originally Posted by raygendreau

The thread is about the company's focus. They are closing distribution centers and are managing the decline of physical disc rental, which has been cut in half in just a few years.

Focus back to disc. Not streaming. Quite simple.
This isn't the Current state of affairs of all things Netflix thread. Nope. It's about disc rental.

If all you're bringing to the table is streaming growth, well you're in the wrong thread.

[Wendell R. Breland]

Originally Posted by rickah88

I hope they do, to someone who really cares about disc rentals. Several million subscribers is a nice chunk of dough. So win/win either way!

The way Netflix is treating us disc subs even baffles the pros:

In addition, Pachter believes G&A spending should largely follow revenue, with 63% ($29 million) allocated to domestic streaming, 19% ($9 million) to international streaming, and 18% ($8 million) to disc. He said that if the cost allocations are correctly applied, domestic streaming generated operating profit of $82 million, while disc generated operating profit of $84 million, and international an operating loss of $84 million.

“The company’s lack of concern about declining DVD subscribers is baffling, and management optimism about contribution profit from domestic streaming growth is misguided, in our view,” Pachter wrote.

IOW, disc rental is the only thing making Netflix any money.

[raygendreau]

Originally Posted by rickah88

Focus back to disc. Not streaming. Quite simple.
This isn't the Current state of affairs of all things Netflix thread. Nope. It's about disc rental.

If all you're bringing to the table is streaming growth, well you're in the wrong thread.

Again, Netflix focus is not on disc. This is exactly where that needs to be discussed.

"In analyses of Netflix (NASDAQ: NFLX ) , the DVD segment tends to get short shrift. All things considered, this isn't very surprising: Streaming is clearly the company's main focus, while the DVD-by-mail business is in permanent decline."

http://www.fool.com/investing/genera...-cow-last.aspx

Originally Posted by rickah88

I hope they do, to someone who really cares about disc rentals. Several million subscribers is a nice chunk of dough. So win/win either way!

I care about disc rentals. That is why I use Red Box where I can rent many BDs the same day they are released without sitting in a Netflix queue.

[bruceames]

Originally Posted by raygendreau

Netflix will probably attempt to sell the physical disc rental business sooner rather than later, while it still has some value. The rapidly declining subscriber base is the primary reason.

http://news.investors.com/technology...ess-wither.htm

A lot of the decline is the result of their own indifference, which is somewhat odd considering that it's been highly profitable. But then they seem to not want to be associated with disc anymore so I wouldn't doubt that they would want to unload it to some buyer at some point.

[rickah88]

Originally Posted by Wendell R. Breland

The way Netflix is treating us disc subs even baffles the pros:



IOW, disc rental is the only thing making Netflix any money.

I get that Netfilx wants to keep up with business technology, and venture out. I also know that Netflix went about it about as horribly as a company can, a few years ago during "The split". It seems they've righted the ship...but how can they not know that disc rental has been and continues to be the goose that lays the golden egg?
I just wish they would sell the disc rental company to some that actually cares about disc rental(kind of like a guy named Reed Hastings waaaaay back in the day who had incurred some late fees at Blockbuster), and let Netflix play with the new shiney streaming toy all they like.
Once hard data caps become more widespread, and they will because you can't do "unlimited for 8 bucks" forever, it's just not sustainable...when folks get the email saying their streaming costs have doubled...woooo nelly, you just better own a store that sells pitchforks & torches.

Now is the studios could just stop making rental copies, I'd be in heaven!

[Steedeel]

Originally Posted by raygendreau

The thread is about the company's focus. They are closing distribution centers and are managing the decline of physical disc rental, which has been cut in half in just a few years.

Of course it has. How could it not be? Rentals via streaming are far more convenient for people with solid connections and or Fibre. You can't ignore that there is still a huge demand for disc rental though. That's where streaming may survive, as a subscription or rental model. It sure won't survive as a sell-through product. I believe it will split in two. We will have optical for sell-through and streaming for rentals. EST will have a couple of good years but fall to the wayside IMO. The final stage of all this will be the race to the bottom where movies are virtually given away in subscription packages with adverts or slightly more expensive packages without ads. By this time I hope to have years of blurays to watch and hopefully still be able to buy my Blu-ray Discs .

[raygendreau]

Originally Posted by Wendell R. Breland

The way Netflix is treating us disc subs even baffles the pros:



IOW, disc rental is the only thing making Netflix any money.

"During the first quarter, scale won over margins, and Netflix made for the first time more money with streaming to its U.S. customers than with DVD subscriptions. Since then, that gap has widened. DVDs still contributed $109 million to Netflix’s bottom line in Q2, but domestic streaming became the real cash cow, contributing $151 million."

http://gigaom.com/2013/10/21/when-wi...subscriptions/

[rickah88]

Originally Posted by raygendreau

Again, Netflix focus is not on disc. This is exactly where that needs to be discussed.

I care about disc rentals. That is why I use Red Box where I can rent many BDs the same day they are released without sitting in a Netflix queue.

No, actually it's not. There are quite a few streaming threads out there. That's where you want to be.

Red Box: LOL! I drove by today and people were sitting in their running cars "waiting in line" for the person, freezing at the kiosk, to hurry up an finish. I was thinking about selling coffee, but didn't feel like stopping.
With ~50 available BD in my queue, always, and another ~20 not yet released, and another ~130 dvds, I always have something delivered to my door. So "same day" means nothing to me.

[raygendreau]

Originally Posted by bruceames.

A lot of the decline is the result of their own indifference, which is somewhat odd considering that it's been highly profitable. But then they seem to not want to be associated with disc anymore so I wouldn't doubt that they would want to unload it to some buyer at some point.

Yes, Netflix stopped promoting physical disc rental a couple of years ago. It may seem odd given that the profit margin on their rentals is 47% , while streaming is around 23%. That differential is likely to decline significantly with a substantial increase in postal costs. Hastings knows exactly what he is doing. He has held onto the physical rental business in order to finance streaming growth. It worked well. He'll pick an opportune time to cut it loose.

[Wendell R. Breland]

Several years ago the Netflix SEC quarterly’s clearly stated their fear of Mitch Lowe (a former executive of Netflix) and Redbox kiosk. It was clear to me then that Netflix knew the general public would prefer to use a kiosk rather than have disc mailed to them. They were correct, Redbox has taken over the disc rental business with ≈ 36,000 kiosk. Doesn’t work for me but it seems to for the general public.

[raygendreau]

Originally Posted by rickah88

No, actually it's not. There are quite a few streaming threads out there. That's where you want to be.

Red Box: LOL! I drove by today and people were sitting in their running cars "waiting in line" for the person, freezing at the kiosk, to hurry up an finish. I was thinking about selling coffee, but didn't feel like stopping.
With ~50 available BD in my queue, always, and another ~20 not yet released, and another ~130 dvds, I always have something delivered to my door. So "same day" means nothing to me.

I suspect you may watch movies more than I do. Red Box meets my needs perfectly. Where I live, almost all of the kiosks are inside. Most locations have two kiosks. I have never had to wait in line. My method of operation is: I check what BDs are coming during the next month on their web site and select those I am interested in. Red Box sends me an email the day they become available. I check the kiosks in my area on line and reserve the BD. I have never had to travel more than 1 1/2 miles to pick up my reserved disc.
Locations in my area include several grocery stores, drug stores, Walmart, gas stations, etc. So, I usually do some shopping when I pick up a disc. I also like the many promotions they offer. Free rental on my birthday. Nearly every Friday I receive a rent one, get one free offer from them.

Perhaps the process isn't so customer friendly in your location. In Southern Cal it is great.

Oh, and don't presume to tell me where I want to be. During the last 73 years, I have managed to figure that out all by myself.

[rickah88]

Originally Posted by raygendreau

I suspect you may watch movies more than I do. Red Box meets my needs perfectly. Where I live, almost all of the kiosks are inside. Most locations have two kiosks. I have never had to wait in line. My method of operation is: I check what BDs are coming during the next month on their web site and select those I am interested in. Red Box sends me an email the day they become available. I check the kiosks in my area on line and reserve the BD. I have never had to travel more than 1 1/2 miles to pick up my reserved disc.
Locations in my area include several grocery stores, drug stores, Walmart, gas stations, etc. So, I usually do some shopping when I pick up a disc. I also like the many promotions they offer. Free rental on my birthday. Nearly every Friday I receive a rent one, get one free offer from them.

Perhaps the process isn't so customer friendly in your location. In Southern Cal it is great.

Oh, and don't presume to tell me where I want to be.

I suspect there are indoor locations here as well, I just never bother to look. I'd rather just open up my mailbox and have my disc(s) right at my home. Which is why Netflix disc rental is my choice. Plus I'm helping out a struggling US Postal Service that is hemorrhaging money. I'm pretty sure Netflix is one of their biggest clients, and would hate to see the numbers if they suddenly lost them.

Not so much where you, personally, need to be...just the streaming talk. As all it does is contribute nothing to the thread.

[raygendreau]

Originally Posted by Wendell R. Breland

Several years ago the Netflix SEC quarterly’s clearly stated their fear of Mitch Lowe (a former executive of Netflix) and Redbox kiosk. It was clear to me then that Netflix knew the general public would prefer to use a kiosk rather than have disc mailed to them. They were correct, Redbox has taken over the disc rental business with ≈ 36,000 kiosk. Doesn’t work for me but it seems to for the general public.

One of the reasons why I dropped Netflix. In an attempt to maximize the value of disc rental, I would receive the disc in the morning, watch it and have it back in the mail on the same day. I had the one disc unlimited subscription. I was able to watch 8 to 10 movies per month. I started having issues with torn mailers, delayed delivery, etc. However, the primary reason I dropped them was the long queue waits for new movies. Their streaming catalog never appealed to me, so I rarely used it.

[Wendell R. Breland]

Originally Posted by rickah88

I'd rather just open up my mailbox and have my disc(s) right at my home.

My thought process for many years now. The last time I calculated the cost of disc rental by mail I had an average of ≈ $1.92 per disc, for me that is a bargain.

[MifuneFan]

I do wonder why Netflix hasn't tried to make their own kiosk system. I suppose it's partly because they're about being an Internet company rather than a physical one, but I feel like they could take a huge chunk out of Redbox's business if they started opening kioks around the country. Especially if disc by mail people could get rental discounts and/or instantly switch their current disc for another from the kiosk.

Redbox is built around the idea of a physical box (hence the name), but are dabbling in streaming now too, and are trying to take marketshare away from Netflix, so I don't see why Netflix can't do the same thing in the other direction.