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Businesses DRM Movies The Almighty Buck

Latest Netflix Earnings Report Mixed 303

Posted by Unknown Lamer
from the hive-of-profit-and-drm dept.
nmpost writes with one interpretation of Netflix's Q2 results (PDF). From the article: "The beginning of the end may be at hand for Netflix. On Tuesday, the movie rental company posted its second quarter results, and they were not promising. While the company returned to profitability following a first quarter loss, Netflix had a 91% drop in net income. The company's troubles began when it attempted to split its DVD-by-mail and streaming services, effectively doubling the price it was charging customers. External forces are now beginning to weigh on the company, and its doom appears to be within sight. The biggest challenges facing Netflix over the coming months are going to be competition and licensing fees. Three huge companies are competing against Netflix in the streaming arena, which has already surpassed its DVD-by-mail business. Amazon, Apple, and Google all offer streaming content as well. As movie and television studios began to demand higher licensing fees, Netflix will not be able to pay, while these tech giants will. Netflix will eventually be priced out of the market." Engadget, on the other hand, shines some positive light on the report: "The results are in from its Q2 2012 earnings report, and it's claiming 27.56 million streaming subscribers worldwide, up from 26 million last quarter. In the US alone that includes 23.94 million customers, after it reported 23.4 million in Q1, while DVD customers dropped by 850k to 9.24 million." So it appears that Netflix is either gaining new streaming customers, or converting those expensive DVD customers into more lucrative streaming-only customers.
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Latest Netflix Earnings Report Mixed

Comments Filter:
  • No more DVD rentals? (Score:4, Interesting)

    by cpu6502 (1960974) on Wednesday July 25, 2012 @12:07PM (#40765321)

    If Netflix dies I guess that's the end of DVD-by-mail. I know at least one person who won't be happy. He rents the DVD and then he & his wife watch the movie or TV show together.

  • by h4rr4r (612664) on Wednesday July 25, 2012 @12:14PM (#40765433)

    Because Amazon has far less selection?

    I would not have it, if I had not gotten a PS3 for free. If Amazon ever gets a real selection for prime streaming I will switch to that. I will not pay $1 to rent a half hour show. $0.25/hour would be about the most i would pay.

  • Re:Naturally (Score:5, Interesting)

    by glassware (195317) on Wednesday July 25, 2012 @12:36PM (#40765817) Homepage Journal

    Netflix replaced a model whose business parameters they controlled (DVD by mail) with a model whose business parameters they do not control (licensing streaming content). Eventually, Netflix will be forced to become a Cable TV provider that streams videos on demand; you'll sign up to Netflix and then pay an extra $10 per month for access to Universal movies, $5 for access to Comedy Central, and so on.

  • Re:Naturally (Score:5, Interesting)

    by The Moof (859402) on Wednesday July 25, 2012 @12:37PM (#40765829)

    It seems that if the studios keep raising their streaming licensing fees then DVDs eventually will be cheaper for Netflix to handle than streaming.

    That's a good way to make DVD piracy popular again.

    Most average users I know only got into copying DVDs (via Netflix mail discs) so they had movies on hand when they wanted to watch them. Streaming took that need away for most people since they could just fire up their device (Xbox, PC, PS3, Wii, TV) and watch what they wanted. Take away that ability with streaming, people will just start copying DVDs again.

  • by Un pobre guey (593801) on Wednesday July 25, 2012 @01:56PM (#40766919) Homepage
    I get the Netflix DVD service, not the streaming. The streaming is heavily skewed to boring, hyper-commercial new releases, whereas the DVD collection is a vast library of indie, foreign, and artistic films and videos essentially unavailable anywhere else. Losing that would be a tragedy. I don't give a flying fuck about the latest movie star vehicles or blockbuster action crap. I can't stand the cardboard acting or shallow and contrived writing of most commercial movies that are on the streaming service. Bummer.

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