According to the report, Netflix has become predominantly streaming, with a majority of its users watching more content streamed online than on DVD.

"In Q4 a majority of Netflix subscribers will watch more content streamed from Netflix than delivered on DVD. With that transition in the business from mostly DVD to mostly streaming, this will be the last quarter the company will report this metric."

Last month, we examined statements by Netflix CEO Reed Hastings pointing to a streaming-only service for the U.S. Currently, streaming-only is only available in Canada. At that time, Hastings had said that "If our results are as strong as we think they will be, then we will look to start this offering later in this Q4. Pure streaming could become our core offering in the USA, and DVD would be offered as a supplement for an additional charge, like we offer Blu-ray today."

The fact that streaming video has overtaken DVDs as the primary form of content consumption for Netflix users seems like a good indication that a streaming-only option is soon on the way.

As McQuivey notes, with users watching Netflix on devices like Xbox and soon Google and Apple TV, streaming video is taking over that same screen real estate once owned by the DVD and "the percent of subscribers that watch instantly is no longer just material to the business, it is the business."

Qik Video Connect offers video streaming and video calling - available for real-time viewing or recorded and sent as a video message. The app will also allow you to post live video links to Facebook and Twitter.

The pro version offers HD video recording and includes additional features like filters and editing tools.

The live video chat will work between iPhones on Wi-Fi as well as on 3G, and the video messages can be shared to those not on the iPhone platform, making it a good alternative to Apple's own video-calling app Facetime.

Despite the acquisition of Qik by Skype, it appears as though the video sharing app will retain its own name and branding. It's an indication, nonetheless, that Skype plans on being active in video and mobile calling.

Previously, the cheapest Netflix plan was $8.99 for unlimited streaming with one DVD out at a time. This is no longer available and instead, users can sign up for the new $7.99 streaming-only plan, or for $2 more can get one DVD sent to them at a time.

As a matter of fact, today's press release by the company starts out with an acknowledgement that "its members [are] now watching more content streamed over the Internet than on discs delivered by mail."

"We are now primarily a streaming video company delivering a wide selection of TV shows and films over the Internet," said Reed Hastings, Netflix co-founder and CEO.  "Today's action reflects the tremendous customer value we've injected into streaming from Netflix, our initial success with a pure streaming service in Canada for $7.99 a month and what our U.S. members tell us they want."

For those of you who are like me - who consume the majority of their content on devices like their Roku box, their iPhone or iPad sitting in the airport, or on their netbook - the day has finally come. Say it with me - we don't need no stinking DVDs.

The only question now is, do you choose Netflix or Hulu?

Seeing this success, then, it doesn't come as a surprise that Amazon - the world's largest Internet retailer - is looking to make a subscription-based, streaming-only option of its own to compete with Netflix.

Amazon Prime is a program that gives "unlimited fast shipping" for frequent Amazon shoppers. It's interesting that Amazon would focus so much on the form of content delivery and package it together with traditional shipping. Will Amazon users really have to continue paying à la carte for most content and only get a Netflix-type option if they subscribe to a service meant for traditional shipping fees? The Business Insider points out that, at $79 per year, the service would beat out Netflix at its own game, which comes in at $95 annually "and doesn't include free shipping on purchases from Amazon."

What do you think about Amazon getting into the game? Will the heating-up of the streaming video space only lead to more expensive Internet plans? Or will competition lower the cost of streaming video to make up for it?

According to Netflix VP of Engineering Christian Kaiser, this is a key area of focus for Netflix in the coming year, and the company hopes to help define a standard that will bring streaming video to a variety of consumer electronics using HTML5.

Today's blog post addresses this issue, explaining that HTML5 "seems like a natural next step for us to use it for streaming video playback within our HTML5-based user interfaces. However, as of today, there is no accepted standard for advanced streaming through the <video> tag."

For Netflix to use HTML5 to stream video, writes Kaiser, a number of requirements need to be met, from agreeing on protocols to formats to protecting  content. He explains that, with proprietary  technology such as these iPhone and iPad apps, Netflix has solved most all of these issues. The only thing remaining is "a way of exposing all this functionality into HTML5." The result would be a standard that could be used by many services to bring streaming video to nearly any device, writes Kaiser:

But what if we could replace all these proprietary solutions with an industry-wide standard? Then Netflix, or any other video streaming service, could deliver to a standard browser as a pure HTML5 web application, both on computers and in CE devices with embedded browsers. Browser builders and CE manufacturers could support every OS and device they choose, leveraging the same implementations across multiple streaming services instead of building and integrating an one-off implementation for each service. Consumers would benefit by having a growing number of continually evolving choices available on their devices, just like how the web works today for other types of services.
We believe that this is an attractive goal.

To this end, Netflix has said that it is getting involved with the community to devise a standard. It is working to define an "industry standard for adaptive streaming" and to "define the requirements for premium on-demand streaming services like ours"."

Even this description is glossing over the more technical points presented in the post, but the short of it is that this sort of advancement could bring a more device-agnostic standard to streaming video and help put an end to much of the debate over how to get streaming video on different devices.

This week, Netflix CEO Reed Hastings said that the success of its streaming-only service in Canada has got the company considering testing the option in the U.S., as soon as later this quarter.

Now, Hastings commented on the company's earnings report, saying, "If our results are as strong as we think they will be, then we will look to start this offering later in this Q4. Pure streaming could become our core offering in the USA, and DVD would be offered as a supplement for an additional charge, like we offer Blu-ray today."

For those of us more often on the move than not and those of us living off netbooks and smartphones, the move sounds ideal. If Netflix shaves a couple bucks off the monthly fee, it may even lure in those with DVD players that just want to save a buck. And as the Internet-connected TV becomes increasingly popular, the idea of waiting for a DVD in the mail just becomes silly. We want what we want, and we want it now.

]]> Discuss]]> http://www.readwriteweb.com/archives/we_dont_need_no_stinkin_dvds_netflix_considers_str.php http://www.readwriteweb.com/archives/we_dont_need_no_stinkin_dvds_netflix_considers_str.php News Thu, 21 Oct 2010 07:33:35 -0800 Mike Melanson Microsoft's Silverlight may have one heck of a mountain to climb in order to take marketshare from Adobe's near ubiquitous Flash plugin, but Redmond is doing a lot of things right in their quest to spread their new technology. They've been making major deals left and right -- with NBC for their online Olympic coverage, with Major League Baseball, and with Nokia -- and yesterday they announced a pilot program to pay developers who use their Silverlight Streaming service, which in itself is a smart move.

Now Microsoft has sweetened the deal by offering revenue sharing via another one of their services, adCenter. Offering revenue sharing is a smart move from Microsoft. It is hard to imagine that they're really expecting the Silverlight Streaming service to be a big money maker on its own -- i.e., Microsoft shouldn't expect it to compete with YouTube or other video CDNs -- but as a way to push the Silverlight technology to the public, it's a smart idea and revenue sharing should attract more developers to it.

If you're a developer looking for a free place to host your streaming videos, and you're choosing between YouTube and Silverlight Streaming, as long as you can keep it under 10GB/5TB, the prospect of revenue share might tip the scales in favor of Microsoft's service.

About a year and a half ago, we reviewed the site, which then allowed users to download torrents without a BitTorrent client and allowed users to instantly stream audio and other non-video content from those torrents. In the closing remarks from that post, we noted, "Presumably, the same idea can be applied to video -- imagine: streaming video distribution over BitTorrent. Very cool." And behold, Bitlet has made this suggestion very real and quite simple, as well.

Although the service is still in an experimental stage, users are invited to test out the service and view sample videos at the Bitlet video page. This page also gives instructions for those "brave enough" to distribute content through the site.

Standard torrent caveats apply: Less bandwidth, higher quality, and fewer peers/seeds will make for more lag time. Nevertheless, it's a great implementation of Bitlet's technology (queuing bits sequentially so users get the first parts of the content first) and the implications are exciting.

As the folks at TorrentFreak wrote, "Although current bandwidth prices are dropping, most video services such as YouTube are paying millions of dollars for traditional server side streaming. Especially high quality video is costly to stream, and peer-to-peer technology can certainly make a huge difference there."

We can't help but wonder how this news will go over with the entertainment industry, especially in the aftermath of the conviction of the Pirate Bay crew. In addition to offering a serious incentive for users who currently use other torrent clients, Bitlet will be in direct competition with legal streaming video sites such as Hulu.

Amazon's new streaming video service has been anticipated for several months, as the retail giant moves to compete with Netflix in the movie-streaming - not simply the DVD rental or purchase - business.

The launch of this new feature comes - so far - without company fanfare, first noticed by The Next Web's Matt Brian this morning. We anticipate Amazon will make a formal announcement with more details.

Update: Amazon just announced the service, adding this key detail: Prime Instant Video Service is available today for Roku customers as part of the Amazon Instant Video Channel on Roku

Currently the service is only available to U.S. customers. If you're not a subscriber, you can sign up for a free trial and give it a whirl.

Among some of Watershed's most interesting features are its granular security settings (down to limiting access to certain IP addresses), detailed analytics, and real-time chat and polls.

Competition

Other white-label video streaming services like Level 3 (pdf) or Move Networks offer similar solutions, though they generally only target larger enterprises and media companies. While Watershed's pricing model seems reasonable, the price itself feels rather high, though Ustream's CEO argues that it is comparable to services from other live streaming providers.

Other streaming services like Mogulus Pro tend to charge a monthly fee for their 'pro' services. Mogulus, however, also charges for bandwidth and Ustream argues that its pay-as-you-go service provides more flexibility.

Update: Skype has confirmed the acquisition on its blog: "Through this acquisition, we'll also be able to take advantage of the engineering expertise that is behind Qik's Smart Streaming technology, which optimizes video transmission over wireless networks."

The tip comes from a reliable source, according to Business Insider, who broke the news of the acquisition this morning. Neither Skype nor Qik have confirmed this, and we'll update this story when we hear more. The two companies do share some of the same investors, notably Marc Andreessen and Ben Horowitz.

For Skype, both mobile and video have been two important areas it has pursued. Just last month, it added video-calling functionality to its iPhone app.

So if the news of a Qik acquisition is true, we can expect to see more developments with the combination of video, mobile and Skype VOIP on other smartphones in the months ahead.

That being said, mobile video continues to see substantial increases in viewership, up over 41% from last year and more than 100% since 2009. Internet video streaming is also on the rise.

Even though Americans are consuming more video content across multiple devices, the Nielsen report does point to some interesting demographic differences in media consumption - something that definitely suggests that even though traditional TV viewership remains strong, that is likely to change.

Until the fall of 2010, Nielsen found that typically the heaviest media consumers did so across all platforms - mobile, streaming, television. But there is now a new sector that defies that pattern - a group that watches little TV but streams significantly more Internet video. Nielsen says that this is being led by the age 18-45 demographic, a group that is "significant but small." About 20% of this group spends 27 minutes per day watching streaming video online. Just as importantly, this particular group watches the least amount of traditional TV.

Nielsen says that as people age, they do spend more time watching television. But it remains to be seen as to whether or not traditional TV viewership will be the media that we turn to as we grow older.

In total, Amazon Prime will have over 15,000 videos available for streaming, including some very popular television shows. Amazon launched its video streaming service about a year ago with 5,000 videos. With today's announcement, that number is now tripled.

Wired's Tim Carmody argued recently that Amazon is particularly well-positioned to emerge as a such a competitor, not only to Netflix but to cable television as well.

Amazon Prime still has some growing to do, and for now the service is tied to Amazon's free shipping service of the same name. GigaOm's Ryan Lawler argues that unbundling the two and launching a stand-alone streaming service could make the service an even stronger contender for Netflix's throne as king of this space.

It's worth keeping in mind that Amazon Prime Instant Video only launched in February of last year. Netflix has been around since 1997 and launched its Watch Instantly streaming feature in 2007. Amazon is rising fast, and its clear that digital content is a growing priority for the company, especially now that its also sells its own media tablet.

Business Insider is reporting rumors from an analyst at research firm Jefferies that Apple has secret licensing deals in place to launch a video streaming service. Jefferies's Peter Misek reportedly said "...we believe Apple has unannounced deals with all/most of the studios/TV networks." If Misek is correct, Apple's play in the space is either a prelude to a deal with the networks for Hulu or a sign Apple was never really interested in the streaming service in the first place, planning all along to create its own streaming product perhaps to coincide with the release of iCloud. Either way, any premium streaming service from Apple will have huge ripple affects across the industry.

If Apple has deals with the networks and studios then the vetting process for buyers of Hulu should accelerate. If Apple or Amazon are not going to buy Hulu (based on their own streaming services and content licenses over the last month) then Google and Microsoft have to seriously consider their roles in the content ecosystem. Google has some premium content available to be viewed through the Android Market and YouTube, but there is no real premium-streaming product it can sell ads against. Microsoft has next to nothing in the premium content department outside of its Xbox streaming partnership with Netflix and Hulu.

If Apple does introduce a streaming service with the release of iCloud in the fall, the company can make a strong case that there is no reason not to buy an Apple TV box (or an actual "iTV, if such a thing ever exists). As we wrote the other day, Apple wants to take over your living room and there is consumer hunger for a true Internet TV, especially one that is emitted from Cupertino. Apple has $76 billion dollars to truly disrupt the television business, which used to be the networks' biggest fear. Yet, with lucrative streaming licenses now being sold (or at least pitched) to every big tech company, the cable box and television as it has been known for the last 20 years may finally become a thing of the past. It just took a bit of Apple to push it over the hill.

The test began at 8 a.m. PT this morning and will feature live-streaming content from four partners: Howcast, Next New Networks, Rocketboom and Young Hollywood.

Right now, live-streaming is in a testing phase, but we have to wonder where YouTube really wants to take this. Is it going to try to compete with the more niche live-streaming players such as Ustream and media blog Beet.TV that it "continues to grow with an average of 32 hours of live video streamed and ingested into the system every minute"? So far, it doesn't seem likely, as the company's release continually emphasized that it would be working with partners. But what good is live for many shows? We tuned in already for Rocketboom's morning talk-show-esque stream and, while entertaining, we wondered why it couldn't be recorded and then broadcast - it would cut out the miscues and bumbled lines, wouldn't it?