Here’s a chart from Dan Frommer that he calls “the entire Internet in one chart.” It shows AOL‘s declining dial-up business compared to Netflix‘s rising streaming business, which Frommer uses a proxy for the broadband market. Frommer has more analysis which is well worth checking out, but one great point: Netflix now has more users than AOL ever had.
Hulu’s future ownership may be in question, but the video streaming site is apparently doing fairly brisk business on the paid subscription front. During an advertiser event this morning, the site announced that it has managed to double its Hulu Plus accounts in the past year, up to four million. The site’s revenue also hit a record for the first quarter of the year, though Hulu’s not giving out any numbers. As with rivals Netflix and Amazon, the company’s making a big bet on original programming, with a number of exclusive series, including the animated The Awesomes and western Quick Draw.
Source: Hulu Blog
Netflix announced its first quarter earnings this afternoon.
Revenue is inline with analyst’s expectations but EPS killed and the stock is up about 20% after-hours.
We’re updating this post as we go,so click here for live updates >
The big numbers are:
- Revenue: $1.02 billion verses $1.02 billion
- EPS: $0.31 versus $0.20
- Earnings guidance: sees Q2 EPS $0.23-$0.48 versus expectations of $0.30 EPS
We’ve long know that Netflix is ambitious, striving to make its own original content when it can. But now the company had made its intentions clear: it isn’t just keeping up with the big boy cable networks—it plans to beat them at their own game.
In a long and thoughtful profile of Netflix in GQ, the streaming company’s chief content officer Ted Sarandos speaks out about what the future holds for the firm. He suggests Netflix must be making at least five new shows a year in order to outdo the big boys:
“The goal is to become HBO faster than HBO can become us.”
With $300 million in his back pocket to spend on original programming—which has already allowed projects like House of Cards, Hemlock Grove, and a new season of Arrested Development to come to fruition—he certainly has the means. All that remains to be proven is the consistency and quality of its programming—and whether or not it can win over enough cable customers. [GQ]
Apple, if it were just a media company, would be pretty fearsome. Its iTunes business is on pace to do $8 billion in annual revenues.
But, fund manager Eric Jackson at Forbes noted something interesting about iTunes this quarter. It was flat on a sequential basis, despite the fact that Apple added 75 million new iOS devices. iTunes revenue was $2.1 billion.
Over the last four quarters iTunes revenue is basically flat going from $1.9 billion to $2.1 billion. Meanwhile, iOS devices have gone from 365 million to 529 million, a significant jump. Pulling further back, as we did in this chart, over the last 11 quarters, iOS devices are up 5.3X, while iTunes is only up 2X.
Why is iTunes sputtering relative to iOS? We assume part of it is Apple’s international iOS growth where iTunes items like songs and movies aren’t available. We also assume services like Netflix and Spotify are cutting into iTunes sales.
What this means for Apple is unclear. But a big part of Apple’s strength is its ecosystem. Part of that ecosystem is music, movies, and apps bought through iTunes. If people are buying fewer movies and less music, they will be less locked in to Apple’s platform.
In our new Connected Intelligence report, Application & Convergence, we measure how consumers are using the various devices they own. In Q4 2012 we saw 40 percent of individuals with a TV connected to the Internet were watching Netflix. And, streaming video users are continuing to migrate from the computer. Twenty-one percent of connected TV owners said they migrated from using over-the-top (OTT) video services on the computer and now watch on the TV instead.
In fact, more than half of consumers age 18-24 that have a TV connected to the Internet watch Netflix on TV
The problem with streaming video to different devices—computers, tablets, phones, and whatever else—is that they all demand subtly different streams if they’re to look their best. If you’re Netflix, which streams to 900 different types of device, that leaves you with some work to do.
According to Netflix, it has to encode each and every movie it offers in 120 different ways. Add to that the crowd sourcing of subtitles, global variation in titles and formats, and an armful of other problems, and the work Netflix has to go to makes $8 a month seem even better value. The video above was used at a Netflix recruitment fair—but gives a decent insight into how its video wends its way from Hollywood to your tablet. [GigaOm]
Like there was ever any doubt, right? Netflix — which serves up over one billion hours of video streaming to some 30 million members per month — owes it to itself to keep track of which ISPs are killing it, and which simply need to be killed. Now, the outfit’s finally ready to begin publishing its findings, ranking America’s major Internet Service Providers based upon “actual performance across all Netflix streams.” The shocker to end all shockers? “Google Fiber is now the most consistently fast ISP in America, according to actual user experience on Netflix streams in November.”
Of note, however, Verizon’s fiber-based FiOS offering came mighty close. Of course, Google’s Fiber isn’t available outside of the Kansas Cities region, while Verizon has (loosely) confirmed that it has no plans to expand the existing FiOS infrastructure beyond the 13 states that were lucky enough to get it. Broadly, cable shows better than DSL, while AT&T’s U-verse — dubbed a “hybrid fiber-DSL service” — ranked quite poorly compared to both Google Fiber and FiOS. Head on over to the source for the full rundown, and feel free to begin the relocation process to Kansas. Good internet, good barbecue, Collin Klein — what’s not to love?
Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.
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