At the Goldman Sachs Annual Communacopia Conference, head of CBS TV Les Moonves confirmed what we already know: “overnight ratings are virtually irrelevant now.” While stressing that CBS is still “monetizing the majority” of the time-shifted audience, the executive also praised OTT service Netflix for facilitating year-round programming, which CBS has been dipping its toes into. After this rather candid remark, it will be interesting to see how the broadcaster will continue to evolve its business model.
Netflix has quietly released a new feature that enables the viewers to send recommendations to selected Facebook friends once they opt to link up the two accounts. Instead of just posting the recommendation to your friends’ walls on your behalf, Netflix is actually taking a more respectful approach by sending these suggestions either through private Facebook messages or, if they have also linked up their accounts, via Netflix notifications. (After all, not everyone needs to know your appreciation for 90’s rom-coms starring Julia Roberts.) Brands attempting to integrate Facebook or other social elements into their campaigns should take note of this approach, which respects and protects users’ privacy by design.
As the debate over net neutrality continues to heat up, Netflix is stepping up by filing a 256-page official petition to the FCC to argue against the merger between Comcast and Time Warner Cable. The OTT video industry, spearheaded by Netflix, has been one of the most vocal proponents in this ongoing debate. It is within reason for them to oppose the merger between two of largest Internet service providers in US for fear of constricted bandwidth and regional monopoly. Netflix may be doing well enough to afford paying ISPs access fee for better interconnection at the moment, but the merger, if approved, would restraint the growth of smaller companies and upset the current equilibrium.
The Creative Emmy 2014 was announced on Sunday, and among the long list of new winners, Netflix and Apple stand out from the crowd.
Netflix continues to disrupt the entertainment content market by reaping a whopping total of seven awards with its original content. Three awards went to its hit prison dramedy Orange Is The New Black, which solidifies the show’s frontrunner status in the race for this year’s Best Comedy Series. It is worth noting that all of its award-winning shows and documentaries could never have been made if not for Netflix’s subscription-based business model, as they are evidently too edgy for ad-supported broadcasters and basic cable.
Meanwhile, Apple beats out strong competitors like Budweiser and Nike to take home the award for Best Commercial with its acclaimed holiday spot “Misunderstood” from last year, once again showcasing the tech giant’s incredible marketing flair.
When it comes to producing original content, Amazon is often overshadowed by its major competitor Netflix, but it’s quickly catching up. Their populist method of letting the audience decide the fate of its new pilots, for instance, points to an innovative way for the entertainment industry to give audiences what they want. Another new thing Amazon is trying this year is to take a page out of the Netflix playbook by attaching big Hollywood names to its original contents. How these efforts measure up to the dominance of Netflix, however, remains to be seen.
CBS is said to be jumping into the over-the-top (OTT) market by allowing its production division, CBS Studios, to develop shows directly for streaming services such as Netflix and Amazon. As evidenced by the streaming deal they struck with Amazon last year for their summer hit “Under the Dome”, CBS has been clearly eyeing the potential in teaming up with the Internet-based challengers for a while now.
This move serves as a testimony to the growing importance of OTT services in the industry, and CBS seems to recognize that maybe there may be room for many competitors in this fractured market.
After signing similar deals with Comcast and Verizon earlier this year, Netflix has now signed a peering agreement with AT&T in aim to improve streaming speed for its subscribers using AT&T’s network, which have typically ranked low on Netflix’s list of ISP speeds. Following its report of record-high subscriber number and revenue, Netflix unquestionably has the capital to keep paying ISPs to sidestep the bottleneck in connection and secure the quality of its service across different networks. But as the leader in OtT video market keeps growing stronger, it is entirely possible that one day the ISPs would be the ones paying for Netflix’s service, just like the way they are paying the cable TV providers for their content now.
In its second quarter report released today, Netflix notes it has crossed the milestone of 50 million members, with 36.24 million domestic subscribers and 13.8 million international ones. In comparison, Time Warner claims 127 million HBO subscribers, while Amazon coyly admits that it has just over 20 million Prime subscribers. The company also reported 1.34 billion in revenue, doubling the profit it had last year.
As Netflix expands around the globe and heaping up the profits, the company also seems to have become the major force advocating for Net Neutrality, which it once again, unsurprisingly, asserts its support for in the report. Its battle with big cable and ISP companies over this issue will most likely intensify as Netflix continues to gain strength from the fast-growing OtT market.
In the on-going feud between OTT content providers and Internet service providers over who is responsible for low streaming speed, the ISPs — oft-reviled cable and telephone companies — make convenient villains. But after receiving a public shaming from Netflix, Verizon has decided to point the finger right back at the dominating streaming service. It accuses Netflix for “purposely select congested routes”, which Netflix has denied, so as to manipulate the ISPs to cover the cost of upgrading their infrastructure, while essentially blaming the humongous Internet traffic caused by Netflix on its vast popularity.
But taking a step back, it’s easy to see the bottom-line here: congestion at the interconnection point is in fact controlled by ISPs like Verizon. And if the customers are paying the their ISPs monthly to stream Netflix at a decent speed, then no other excuses would be valid for ISPs to jettison that responsibility. Maybe the ISPs are conveniently villainous for good reasons after all.
Netflix is looking to change the negative connotation of binge-watching TV by declaring that TV, as a medium, is getting better. Through this impressively produced native ad on Wired, Netflix is, somewhat audaciously, positioning itself as the force that elevated television’s medium status from cultural wasteland. One point it brought up, however, is truthfully valid: the easy access to comprehensive TV catalogues provided by over-the-top service providers like Netflix does help to cultivate a more consumer-led, sophisticated TV market. Therefore, it is disrupting the traditional model that the industry was accustomed to.
This is just one of the two recent high profile cases of “Snowfall” native ad that Netflix has tried its hands on (the other one ran on NY Times). Seeing the attention and acclaim of both ad has received, one can’t help but wonder if such success is truly replicable, if even cost-efficient. Entertainment is a great fit for this new breed of ad because there would already be a narrative for the ad to build on, But would it actually work for other marketing efforts as well?