Netflix CFO Sees No Future for Amazon Rentals 136
Dave H. writes "In comments made at the Morgan Stanley Small Cap conference last week, Netflix CFO Barry McCarthy says he doesn't think Amazon.com will expand its video rental market into the US because the retailer's infrastructure wouldn't work to its advantage with video rentals. He also sees the window between theatrical and DVD releases shortening, which is a Good Thing." From the article: "The price of entry is much higher now than it was in the past, both in terms of the cost of locating warehouses and just the mere fact that Netflix and Blockbuster are both considerably larger now. McCarthy then said that Amazon is in the classic make-versus-buy dilemma, noting that the company can either start from scratch or try to acquire service through either an acquisition or partnership." Update 6/20: Barry McCarthy's position at Netflix corrected.
what he really said was (Score:5, Insightful)
Blockbuster Online (Score:5, Insightful)
I was impressed that they had many shipping locations. Unfortunately I was unable to take advantage of these because it took 2-3 days to get mail from the shipping location to my house, which is in the same state as the shipping location.
It seems shipping locations would be a lot of the cost of setting this up. Perhaps smaller businesses could pool resources?
Theatrical Release TO Dvd Release (Score:3, Insightful)
I've said it before and I'll say it again (Score:2, Insightful)
From the article: (Score:5, Insightful)
There you go, cause and effect. What else did you expect? Do you think the CEO of Netflix would say: "the market is expanding rapidly with absurdly high profit margins and plenty of opportunities for newcomers. Amazon is perfectly suited to join the competition and can make tons of money with little alteration to their existing infrastructure. I'll be the first to welcome them with a handshake while we prepare to downsize!"?
Doesn't seem like anything out of the ordinary to me.
"As to whether or not Amazon and Netflix are in negotiations for a partnership, McCarthy said "my comment is 'no comment'." I think that statement is about as obvious as obvious gets. No doubt non-disclosure agreements are par for the course, but sometimes nothing is so revealing as a "no comment". Then again, that could be read as some kind of public invitation to Amazon. Idunno... this is
4 a month = useless. (Score:4, Insightful)
amazon's service only allows 4 dvds a month. and you're only allowed 2 at home at any one time. at least, thats what they offer in the UK.
now, surely the people that are most likely to use a service like this are going to want alot more than that in return for their monthly fee. i watch alot more that one film a week, and i'm only an amateur film buff. so if i were to get one of these services (which i may do in the future) i'd be getting the one that allows me unlimited DVDs.
i did the math, and using the amazon service, you're not saving alot by getting the monthly fee. and if you only get 3 in one month, you lose money compared to renting(assuming renting is £2.50 like at my local rental place).
and if you live near a good library, its even cheaper and you can keep the DVDs for a week.
i'm usually a great supporter of all things amazon, but they really need to rethink their business model.
Re:Time between theatre and DVD (Score:5, Insightful)
Nowadays, every DVD release is dictated by the marketing department. Almost two years ago we fundamentally changed every aspect of our workflow in order to be able to deliver final DVD audio to the authoring department faster. We shortened our delivery time by a week, but marketing wants it much faster - often, this is not possible.
The biggest problem is that the company is so large and there are so many titles in the pipe that the scheduling of elements being created by outside venders is very problematic - final approved picture, final approved audio, extras, subtitles, DVD menus, etc. Not to mention the fact that there are so many idiots up the chain that have no idea what's involved in getting the actual work accomplished.
The President of my company has said that he wants to eventually see the day when a person can walk into the theater, watch a film and on the way out buy the DVD. This could, and probably will happen, but it would likely be a domestic only 5.1 and/or Lt/Rt with little or no extras. The replication time alone would probably push back the theatrical release a week or so.
Re:Time between theatre and DVD (Score:3, Insightful)
That would be awesome. I really dont like all the extras, and you can't tell me it doesn't cost more money to make. If what you suggest is true and the movies are priced cheaper than current DVDs, sweet.
Re:what he really said was (Score:3, Insightful)
Most that start their own company and do well, at some point want to retire and be bought out.
Tens of millions goes a long way towards retirement.
Equity Marketing (Score:2, Insightful)
Not in the US != No Future (Score:3, Insightful)
So what, exactly?
Re:Netflix has improved service (Score:3, Insightful)
An interesting question is whether Blockbuster will find a better business model than to mimic NetFlix. It was obviously an immediate counter-move to watch their market share disappear forever, but obviously not original. The result was merely price competition. That alone can't make or break a company because things such as customer service can easily outweigh it.
Blockbuster does have an advantage in the form of having local stores. This provides access to spontaneous rentals. Over time, some form of algebraic equation will have to be worked out to figure out the right mix of their online business model and the number of real-world stores. Too many or too few stores and the balance will be upset.
As far as Amazon's entry into the fray, waving a red flag in front of them won't guarantee they will move forward, but it certainly won't tell them to stay away, either.
There are going to be all sorts of strange statistics to make things interesting. Something which has held true (since forever) is 95% of the people who have access to cable have but a single provider [to choose from]. Otherwise, it's a dish. Pay-per-view is already available as a service but depending upon your provider (and location), the prices aren't always as gentle on your monthly bill as a visit down the street to Blockbuster. Fortunately, many systems permit 24-hour "rental" where you can play it at will, including rewind, fast forward, restart, etc.
As UWB (ultra-wideband) and other technologies (not cable modems) capable of either downloading or providing streaming movies could easily push Blockbuster's retail stores to the bring of survivability.
One of the bigger questions out of all of this - and it seems somewhat unrelated - is how all of this will affect the ability to put butts into the movie theatres. At least one recent survey shows a significant number of people prefer to watch movies at home. Admission price; food choice, quality, and price; and listening to babies cry, bored kids complain, and everyone else talk, surely cannot be factors in all of this, can they? Seriously, the quality and accessibility of home electronics has been cited as adding to the movie experience. (in addition to the other things I mentioned, IMO)
Re:You're the wrong demographic (Score:1, Insightful)
I use to have NF and I have to say it is a amazing service that saves me time, and increases my enjoyment of the time i spend in front of the TV.
NF allowed me to make a list of all the TV shows and Movies that I wanted to see. I was able to make sure that I would see those random movies that people always recommend, but i never remember when i get to the video rental shop.
I stopped watching a lot of TV becuase I was able to watch all the same shows i like, but commerical free, and on my own schedual.
I personally just view NF and simular services as a extension of the Video On Demand (VoD) future. We all know that someday, once all the legal and technical problems are worked out, we will watch shows with VoD.
We will be able to filter the crap out, save tons of time, and view things on our own schedual.
Re:Time between theatre and DVD (Score:1, Insightful)
This is the movie industry we are talking about. If anything, it will be more expensive to factor in a "convenience charge."