Netflix conference: There's a big Blu wave coming at us

[Grubert]

Netflix's "Investor Day" conference can be viewed now:

http://ir.netflix.com/eventdetail.cfm?EventID=52639 (registration required)

It's quite long, but very interesting throughout. Some highlights:

1. Blu-ray


The Vice-president of Operations said:

The good news is, there's this big blue wave coming at us and this big blue wave – is Blu-ray DVD.

Those of you that watch HD viewing at home, whether it be on TV or if you have a Blu-ray player, it's a superior viewing experience.

And well, the Blu-ray player sales have been small and Blu-ray shipments are a small part of our business right now. I believe that it's ultimately going to grow as people get exposed and as with DVD players, prices come down, hopefully Blu-ray will take off and become a more meaningful part of our business and customers will have this whole next new experience of DVD viewing in high definition, which is really a super feature.

It's ultimately going to grow as people get exposed and Blu-ray DVD players come hopefully meaningful whole new a super feature

2. DVD


This is exactly what CEO Reed Hastings said (0:10:04):

Originally Posted by Netflix CEO

Our view is that our DVD Netflix shipments will probably peak in five to ten years.

Not surprisingly, the media misunderstood Hastings' presentation as meaning it was exactly five years, so CFO Barry McCarthy later said the following (02:02:15):

Originally Posted by Netflix CFO

There seems to be some confusion about our view of the expected life of DVD. It is not our expectation that DVD will peak in 2013. Our view is it's going to peak sometime in the next 5 to 10 years. Hard to know exactly when. On balance, we would think longer rather than shorter, it remains to be seen how much legs Blu-ray's got.

3. Streaming

There won't be a "streaming-only" plan: "We're not looking to turn this into a standalone service that people pay for separately."

A 720p firmware is being developed for the fall. But "there's probably a bigger obstacle" in the acquisition of "rights to a broad library of HD content." When asked to elaborate, the Netflix exec said:

"I think that the concern here is that the studios want to figure out how this is going to play. In its basic form, they want to keep their high-definition for their high-margin Blu-ray sales. (…) We have some decent subset of content available in hidef not it's just not a compelling enough collection at this point to be able to tell this is a high-definition service."

The Roku box supports 5.1 output, but the DRM solution doesn't. They "have eyes" on a future DRM that will support it (but no timeline given).

No 1080p – that is 'another turn of the crank.' The box supports 720p.

No "hot new" content for streaming: that would attract retaliation by Apple/amazon.

3 major CEs (LG plus other two?) to have streaming at no extra cost to them (subsidized by Netflix). Expected for end of 2008-2009.

[TheTenth]

Why do people compare HD "viewed at home" and Blu-ray? the internet cannot assure a transfer spped allowing the signal to be nearly as good as Blu-ray ; look what Microsoft offers to their XBOX players : 720p movies with bitrates lower than DVDs ... This can only hurt sales of Blu-ray players as people don't see much difference to an upconverted movie!