Home » Streaming Services » Recent Articles:

Netflix Loses 130,000 U.S. Customers After Raising Its Price to $12.99/Month

Phillip Dampier July 17, 2019 Competition, Consumer News, Netflix, Online Video, Video No Comments

Netflix stock lost over 11% of its value late today after the company reported second quarter results that underwhelmed Wall Street, including a surprising loss of 130,000 U.S. customers that left the streaming service during the last three months.

Netflix added 2.7 million customers in the second quarter, a much smaller number than the 6 million it added during the same period last year. As of the end of June, Netflix now has 151.6 million customers worldwide. Wall Street expected between 153-156 million by that time. The $2/month U.S. rate increase during the first quarter for Netflix’s popular two-concurrent stream plan (was $10.99, now $12.99 in the U.S.) helped keep company revenue up 26%, to $4.92 billion for the quarter. But analysts expected $4.93 billion. Profits also declined to $270 million, compared with $384 million a year ago during the same quarter.

The company blamed the lackluster results on the lack of compelling content during the second quarter. In a letter to shareholders, Netflix claimed the recent price increase slowed growth, but the real problem was overheated growth during the first quarter and not a lot of blockbuster movies and shows to watch.

“We think [the second quarter’s] content slate drove less growth in paid net adds than we anticipated,” Netflix executives said.

The company also noted it is raising prices in several European countries including the United Kingdom, Spain, Ireland, France and Germany.

Netflix does not believe competition with other streaming services had a material impact on its subscriber numbers during the quarter, but analysts suggest Netflix should be concerned about forthcoming streaming competition from AT&T/WarnerMedia (HBO Max) and Walt Disney (Disney+). As more services become available, consumers are likely to take a hard look at the streaming services they are watching and ditch those they are not.

Netflix also declared it will not introduce a cheaper, ad-supported version, despite increasing speculation it would.

“We believe we will have a more valuable business in the long term by staying out of competing for ad revenue and instead entirely focusing on competing for viewer satisfaction.” Netflix told shareholders.

The Wall Street Journal reviews the many challenges to Netflix from forthcoming contenders in the streaming wars. (4:36)

DirecTV Customers in 17 Major Cities Face CBS, CW Station Blackout

AT&T is facing a last hour showdown with CBS owned and operated local TV stations in 17 major U.S. cities over a new retransmission consent contract that could mean the third major station blackout for customers of DirecTV, DirecTV Now, and AT&T U-verse. Streaming customers would also lose access to on-demand content. In addition, CBS-owned CW television stations would be dropped from all three AT&T-owned services.

AT&T’s contract with CBS affiliates in Atlanta, Baltimore, Boston, Chicago, Dallas, Denver, Detroit, Los Angeles, Miami, Minneapolis, New York, Philadelphia, Pittsburgh, Sacramento, San Francisco, Seattle, and Tampa expires at 11pm PDT on Friday, July 19. At the moment, the two parties are reportedly far apart in negotiations, with AT&T complaining CBS is proposing “unfair terms” for a contract renewal.

CBS claims AT&T is offering below-market pricing for a contract renewal, noting that other cable, telephone, and satellite providers readily agreed to pay higher prices to continue carrying CBS’ major market affiliates.

AT&T has already left customers blacked out from nearly 150 local stations owned by Nexstar and several smaller owners — some effectively front groups for Sinclair Broadcasting — with no end in sight. Both sides are taking heat from public officials and members of Congress upset with the loss of one or more local stations, and the latest blackout of CBS stations could result in even greater scrutiny of AT&T and station owners.

AT&T issued a statement warning customers to be ready for the blackout by this weekend, and complained CBS was negotiating in public.

“We’re disappointed to see CBS put our customers into the middle of negotiations,” AT&T said in a statement. “AT&T is on the side of customer choice and value and wants to keep the local CBS stations in affected cities in our customers’ lineups. Our goal is always to deliver the content our customers want at a value that also makes sense to them. We continue to fight hard for that here and appreciate our customers’ patience while we work this out with CBS.”

The Drumbeat for Netflix to Start Running Ads Grows Louder

Phillip Dampier July 10, 2019 Competition, Consumer News, Netflix, Online Video 2 Comments

Could this be the Netflix of the future?

Investors concerned about the increasing costs of developing new original content for Netflix have caused a drumbeat for the world’s largest on-demand video streaming company to start running advertising inside TV shows and movies.

A new study finds that almost one-third of Netflix customers claim they would not mind seeing advertising if it meant paying a lower price for Netflix.

The Diffusion Group, based in Los Angeles, asked 1,292 current Netflix subscribers if they would switch to a new, lower-priced Netflix tier that included commercial advertising. Nearly 32% of respondents expressed confidence they would make that switch, with 49% opposed and 20% undecided.

A recent streaming conference in Europe seems to have stoked interest in the concept of an ad-supported Netflix, although the company has repeatedly claimed it has no plans for an advertiser-supported tier, dismissing the idea as a concept dreamed up by their competitors, notably Comcast/NBC and Hulu.

TDG Research president Michael Greeson believes advertising on Netflix is inevitable however, driven by a backlash from Wall Street over how much Netflix is spending on content as it continues to lose access to some of its most popular licensed content, being pulled off Netflix by its competitors Disney and AT&T/WarnerMedia.

“Given the rising costs of programming and growing debt, so goes the argument, it is just a matter of time before the company makes a move,” TDG said in its report.

Netflix’s early days of streaming depended on a deep library of popular movies and TV shows that were readily licensed to the company by major Hollywood studios. But in the last five years, those studios have demanded dramatically higher licensing fees, and in the last year they have ended some contract renewals altogether to reserve content for the launch of their own affiliated streaming services, including Disney+ and HBO Max.

“Netflix’s response to its thinning third-party library is to spend more on originals, which it’s gambling will keep subscribers from jumping ship,” Greeson said. “But with half or more of its most-viewed shows being owned by three studios, each of which is launching their own direct-to-consumer services, how long can you convince 55+ million US consumers that your service is worth paying a premium price, especially compared with Hulu (offers an ad-based option), Amazon Prime Video (free with Prime), and Disney+ (coming in a $6.99/month)?”

Greeson

Netflix has faced growing pressure from investors to reduce the level of debt it has accumulated financing those original productions, including pushes for rate increases and advertising. Netflix raised prices, but has publicly opposed advertising. Some investors now want another rate increase, which Greeson warns would be perilous for Netflix’s subscriber count, because their research found the last price increase “strained the limit of the service’s value.” That research was done before subscribers start to discover their favorite shows will increasingly be pulled off the platform. Greeson believes another rate increase will cause at least some customers to flee, stalling Netflix’s growth.

The happy medium in Greeson’s view is the introduction of an ad-supported tier for price-sensitive subscribers, and he predicts Netflix will introduce it in the next 18 months.

“Ads will become an important part of a comprehensive tiering strategy that helps bullet-proof Netflix for years to come,” Greeson said.

WarnerMedia’s New Streaming Service is Called HBO Max

Phillip Dampier July 9, 2019 Competition, Consumer News, HBO Max, Online Video No Comments

AT&T/WarnerMedia’s new streaming service due to debut in Spring 2020 will be called HBO Max and bundle original and classic content from AT&T-owned networks and studios, including Warner Bros., New Line, DC Entertainment, CNN, TNT, TBS, truTV, CW, Turner Classic Movies, Cartoon Network, Adult Swim, Crunchyroll, Rooster Teeth, and Looney Tunes.

AT&T still has not announced pricing for the service, but most expect it will end up costing around $16 a month, more than any other streaming service.

“HBO Max will bring together the diverse riches of WarnerMedia to create programming and user experiences not seen before in a streaming platform,” Bob Greenblatt, chairman of WarnerMedia Entertainment and direct-to-consumer, said in a statement.

To attract potential subscribers, AT&T has been pulling back content it owns or controls from other streaming services. In addition to The Office, AT&T announced it will also yank Friends reruns off of Netflix in early 2020, despite collecting $80 million from the streaming giant this year to carry the NBC series that aired its last episode in 2004.

To market HBO Max, WarnerMedia will tie it to the marquee HBO brand and its HBO Max and Go streaming services. HBO Max customers will receive access to the full HBO online catalog of on-demand content, along with more than a dozen new made-for-streaming TV shows and movies. Much of the new content will target a younger audience, including a large roster of CW shows, original movies and shows. But older audiences will also find a large library of classic content from the enormous Turner Classic Movies and Warner Bros. studio libraries.

A preview for HBO Max, WarnerMedia’s new streaming service, debuting in Spring 2020. (0:43)

AT&T’s End Run Around Costly Local TV: Donate $500k to Locast and Add It to Lineup

Phillip Dampier June 27, 2019 AT&T, Competition, Consumer News, Locast, Online Video No Comments

AT&T today announced it was donating $500,000 to the non-profit group behind Locast, the online streaming service offering free access to local TV stations in more than a dozen U.S. cities.

AT&T’s altruism is a thumb in the eye of high-cost retransmission consent agreements with the corporate owners of local free over the air television stations. AT&T added Locast’s app to U-verse and DirecTV receivers at the end of May, giving subscribers a quick and easy way to access over the air stations if one or more are “blacked out” over a contract renewal dispute. AT&T also continues to offer antennas to customers that integrate with both services’ electronic program guides so subscribers can quickly access their favorite channels.

The Sports Fan Coalition, the group behind Locast, will use the money to further expand its service into other cities. At present, Locast is available to almost one-third of American TV homes, amounting to more than 32 million potential viewers. But the service has a very long way to go to stream local stations from all 210 U.S. TV markets.

AT&T will likely use Locast as a leveraging tool when negotiations become heated, letting TV station owners know they can simply point customers to Locast to continue watching stations. AT&T cannot legally redistribute Locast TV streams to customers without running afoul of copyright law, but it can provide customers with access to the independent Locast app and the internet connectivity that allows that app to function. AT&T does not currently plan to drop local stations already on the lineup in favor of pointing customers to Locast. But it will let customers know that blacked out stations are still available to customers through the Locast app.

Search This Site:

Contributions:

Recent Comments:

  • paul: Hi guys, this worked perfectly....you made my day! I had called the retention department a year ago and they gave me $60 off per month...pretty good d...
  • Phillip Dampier: Can you scan or photo a copy of the letter and I'll blot out the personal info. Would like to investigate. [email protected]
  • Paul Houle: Recently I got a letter from Frontier that disclosed that my internet speeds were not up to the advertised rates. Seems like they had a dispute with ...
  • BM: So this law was passed without any notification to the citizens or their consent.. People need to fight these 5G towers, they are very dangerous! Peop...
  • Deborah Kohler: My spectrum bill just went up over $30 for the month. Spectrum states it was due to being on a promotional offer for the first year. My daughter and I...
  • Matt M: The million dollar question is this: Who, where or what does a NYS homeowner without broadband contact to get service? I am now the only house on my...
  • L. Nova: So FCC and the Trumpsters panic because SF tries to actually foster competition? Of course, we know that competition is only good if it doesn't inconv...
  • Anthony: Phillip Dampier: What if I cancel the service, and then a week later request the service again?, that will give me the initial benefits? or should I u...
  • N: This site would not allow me to edit my first posting. I have some I corrected it and I'm reposting now. Please excuse my last post / my first post. ...
  • N: No big deal,?!! Well, I don't know about you or others in this forum, however I simply do not have the time 2 watch much TV, nor am I inclined to wast...
  • Evie Williams: These brokers really had me for almost all of my life savings, it started with small investments and really strong assurances, although they let me wi...
  • Karolyn Hardaway: ClearView is now called LiveWave. Just read an ad and the wording was almost identical to ClearView. Glad I saw your article. Our telephone co-op is i...

Your Account: