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Author Topic: Netflix Will Soon Outperform All Major TV Networks  (Read 6533 times)

Tugg Speedman

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Netflix Will Soon Outperform All Major TV Networks
« on: June 30, 2015, 09:56:56 AM »
What is the future of cable and Sat other than to provide the pipe?  It will all be streamed.

Netflix Will Soon Outperform All Major TV Networks
Posted: Jun 29, 2015 9:37 PM CST

http://www.12newsnow.com/story/29437307/netflix-will-soon-outperform-all-major-tv-networks

If Netflix were a TV network, its audience would surpass that of ABC, CBS, NBC, and Fox within a year. That's according to a new study by FBR Capital Markets, which leveraged Nielsen ratings to assess the relative popularity of the internet's most popular streaming media service.

The comparisons aren't entirely fair, as Variety points out, since Nielsen ratings do not fully account for the use of VOD or DVR viewership, nor do they cover online-video views. Furthermore, TV networks follow a completely different operating schedule and fundamental business strategy than streaming services like Netflix and Hulu.

Nevertheless, the findings point to both Netflix's soaring popularity and the diminishing importance of broadcast media in home entertainment.

Historically, Netflix has been cagey about sharing user data, but two bits of info it does release is its total number of subscribers and the number of hours they collectively stream. Using those figures, analysts at FBR were able to arrive at the Nielsen rating Netflix would get if it were a traditional broadcaster: roughly 2.6 in Q1 2015, or about the same as ABC and NBC over the same time period. That's despite spending less on content rights than the major networks.

More troubling for the big players, Netflix is growing at a rate of more than 40% per year, while networks are losing market share.

In addition to viewership numbers, FBR researchers pointed to a poll that asked TV watchers to choose between Netflix and a cable or satellite TV subscription: 57 percent chose Netflix, with 43 percent opting for traditional pay TV.

In short, Netflix or something like it seems destined to be the future of television. This shouldn't come as a surprise in 2015, but it's always interesting to attach some data to a trend.

Badgerhater

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Re: Netflix Will Soon Outperform All Major TV Networks
« Reply #1 on: June 30, 2015, 10:09:19 AM »
I do not watch a single show on real-time TV.   Since dumping cable, my wife and I find we watch very little TV.   Most we watch is 2 episodes of a show on Netflix about twice a week in summer and more often in winter.

The key to the long-term viability of a streaming platform is the ability for those services to make their own quality content consistently -- not just a good show here or there.   If network TV continues to shrivel, it will no longer create the content for the binge watchers on Netflix.

GooooMarquette

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Re: Netflix Will Soon Outperform All Major TV Networks
« Reply #2 on: June 30, 2015, 12:47:09 PM »
Does Netflix carry MU games?  If not, screw 'em!

Tugg Speedman

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Re: Netflix Will Soon Outperform All Major TV Networks
« Reply #3 on: June 30, 2015, 01:49:35 PM »
When WatchESPN cuts the cord like HBOgo and offers their service as a streaming only option, the rest like FS1 will follow quickly.


GOO

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Re: Netflix Will Soon Outperform All Major TV Networks
« Reply #4 on: June 30, 2015, 02:41:39 PM »
What is the future of cable and Sat other than to provide the pipe?  It will all be streamed.

Netflix Will Soon Outperform All Major TV Networks
Posted: Jun 29, 2015 9:37 PM CST

http://www.12newsnow.com/story/29437307/netflix-will-soon-outperform-all-major-tv-networks

If Netflix were a TV network, its audience would surpass that of ABC, CBS, NBC, and Fox within a year. That's according to a new study by FBR Capital Markets, which leveraged Nielsen ratings to assess the relative popularity of the internet's most popular streaming media service.

The comparisons aren't entirely fair, as Variety points out, since Nielsen ratings do not fully account for the use of VOD or DVR viewership, nor do they cover online-video views. Furthermore, TV networks follow a completely different operating schedule and fundamental business strategy than streaming services like Netflix and Hulu.

Nevertheless, the findings point to both Netflix's soaring popularity and the diminishing importance of broadcast media in home entertainment.

Historically, Netflix has been cagey about sharing user data, but two bits of info it does release is its total number of subscribers and the number of hours they collectively stream. Using those figures, analysts at FBR were able to arrive at the Nielsen rating Netflix would get if it were a traditional broadcaster: roughly 2.6 in Q1 2015, or about the same as ABC and NBC over the same time period. That's despite spending less on content rights than the major networks.

More troubling for the big players, Netflix is growing at a rate of more than 40% per year, while networks are losing market share.

In addition to viewership numbers, FBR researchers pointed to a poll that asked TV watchers to choose between Netflix and a cable or satellite TV subscription: 57 percent chose Netflix, with 43 percent opting for traditional pay TV.

In short, Netflix or something like it seems destined to be the future of television. This shouldn't come as a surprise in 2015, but it's always interesting to attach some data to a trend.


In five years you and most of the general USA population will be cruising down the road in autonomous self driving vehicles watching netflix after junking their current cars.   :P  Good for netflix and media consumption in general.  Just joking around.


Tugg Speedman

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Re: Netflix Will Soon Outperform All Major TV Networks
« Reply #5 on: June 30, 2015, 02:46:19 PM »
In five years you and most of the general USA population will be cruising down the road in autonomous self driving vehicles watching netflix after junking their current cars.   :P  Good for netflix and media consumption in general.  Just joking around.

That is the goal, by not driving the car time can be more productive.  And yes, a 32' HDTV will be standard equipment as the car takes to to where you want to be.

Sure beats raising your blood pressure in traffic!

Spotcheck Billy

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Re: Netflix Will Soon Outperform All Major TV Networks
« Reply #6 on: June 30, 2015, 03:37:29 PM »
I read that if your driverless car isn't a Google, Google will throttle the bandwidth when you try to stream Netflix to your vehicle leading to unacceptable buffering and dropouts.

ChicosBailBonds

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Re: Netflix Will Soon Outperform All Major TV Networks
« Reply #7 on: June 30, 2015, 08:20:24 PM »
When WatchESPN cuts the cord like HBOgo and offers their service as a streaming only option, the rest like FS1 will follow quickly.



FS1 can't currently...I know, I helped with the contract. 

FS1 would fail to exist if they did since their revenue is tied to s bundle. They couldn't live on their own.

As for the opening article, the headline is so faulty it is incredible.

ChicosBailBonds

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Re: Netflix Will Soon Outperform All Major TV Networks
« Reply #8 on: June 30, 2015, 09:51:42 PM »
The dirty secret (which isn't a secret to those of us in the industry), the viewership for Netflix originals is pedestrian at best.  Barely profitable company, but they are media darlings and that counts for a lot these days.

http://www.theatlantic.com/business/archive/2014/02/is-i-house-of-cards-i-really-a-hit/284035/


Tugg Speedman

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Re: Netflix Will Soon Outperform All Major TV Networks
« Reply #9 on: June 30, 2015, 11:06:19 PM »
The dirty secret (which isn't a secret to those of us in the industry), the viewership for Netflix originals is pedestrian at best.  Barely profitable company, but they are media darlings and that counts for a lot these days.

http://www.theatlantic.com/business/archive/2014/02/is-i-house-of-cards-i-really-a-hit/284035/

Market Capitalization
Netflix = $39 billion
CBS = $27 billion

Cable sat bundles are the past and present while streaming is the future.  That explains these valuations.

Once you start looking at companies as future potential and not actual profits now (which are going away as technology and preferences change) things will make more sense.

Doesn't everyone wish they could go back 35 years in a time machine and invest in a fledgling UNPROFITABLE company run out of a garage in Cupertino CA called Apple?  You would have passed because you would have demanded profits (which measure the present) and not look at the future potential.


ChicosBailBonds

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Re: Netflix Will Soon Outperform All Major TV Networks
« Reply #10 on: June 30, 2015, 11:22:06 PM »
Market Capitalization
Netflix = $39 billion
CBS = $27 billion

Cable sat bundles are the past and present while streaming is the future.  That explains these valuations.

Once you start looking at companies as future potential and not actual profits now (which are going away as technology and preferences change) things will make more sense.

Doesn't everyone wish they could go back 35 years in a time machine and invest in a fledgling UNPROFITABLE company run out of a garage in Cupertino CA called Apple?  You would have passed because you would have demanded profits (which measure the present) and not look at the future potential.



Should we go through all the companies over time that had insane market valuations and ended up with nothing?  The future is wonderful, but many don't make it.  I say this as a Netflix shareholder.

I happen to know Netflix has negotiated the rights to linear live streams because a few birdies in the industry drank a bit too much.   ;)  It will be interesting to see if they take advantage of that because they have been absolutely adamant about no advertising ever.  There model will be changing significantly if they do.

Tugg Speedman

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Re: Netflix Will Soon Outperform All Major TV Networks
« Reply #11 on: July 01, 2015, 02:34:58 PM »
Should we go through all the companies over time that had insane market valuations and ended up with nothing?  The future is wonderful, but many don't make it.  I say this as a Netflix shareholder.

I happen to know Netflix has negotiated the rights to linear live streams because a few birdies in the industry drank a bit too much.   ;)  It will be interesting to see if they take advantage of that because they have been absolutely adamant about no advertising ever.  There model will be changing significantly if they do.

Lots of them, but when that company is part of the S&P 500, and Netflix has been since 2010, use that as a metric that it is "established" and it is going to change its industry. 

It has moved from being a high-flying promise to an established technology that is changing its industry.

You have two options, change for the new way of doing things or go out of business.

GOO

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Re: Netflix Will Soon Outperform All Major TV Networks
« Reply #12 on: July 02, 2015, 09:04:13 AM »
Should we go through all the companies over time that had insane market valuations and ended up with nothing?  The future is wonderful, but many don't make it.  I say this as a Netflix shareholder.

I happen to know Netflix has negotiated the rights to linear live streams because a few birdies in the industry drank a bit too much.   ;)  It will be interesting to see if they take advantage of that because they have been absolutely adamant about no advertising ever.  There model will be changing significantly if they do.

What is this exactly.  Sports, awards shows? I don't know the terminology.

ChicosBailBonds

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Re: Netflix Will Soon Outperform All Major TV Networks
« Reply #13 on: July 02, 2015, 09:26:01 AM »
What is this exactly.  Sports, awards shows? I don't know the terminology.

It means Live channels. They are a 100% SVOD service right now (subscription video on demand).

Sling TV is a live linear streaming service, no VOD.

There are combinations that offer both...my work currently is in that hybrid space with live linear and SVOD combination.

There's also AVOD and a few others out there.  No one is making any money, other than Netflix and they don't make much.  Hulu has lost money every year since inception.  It's all very "sexy", but at some point they need to make money and stand on their own.

brewcity77

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Re: Netflix Will Soon Outperform All Major TV Networks
« Reply #14 on: July 02, 2015, 09:55:08 AM »
Just saw that Illinois is planning a 9% tax on Netflix users. No surprise, but it will be interesting to see what fees end up added as more and more users move away from standard providers like cable and satellite in favor of cheaper, more diverse internet options.
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ChicosBailBonds

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Re: Netflix Will Soon Outperform All Major TV Networks
« Reply #15 on: July 05, 2015, 01:13:50 PM »
Just saw that Illinois is planning a 9% tax on Netflix users. No surprise, but it will be interesting to see what fees end up added as more and more users move away from standard providers like cable and satellite in favor of cheaper, more diverse internet options.

Yes.  On the product that I'm working on (we're still a beta product, but we are out there), we have to implement this now.  Not good.  It will complicate things.  Ultimately, business and gov't will get their pounds of flesh.

Tugg Speedman

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Re: Netflix Will Soon Outperform All Major TV Networks
« Reply #16 on: July 05, 2015, 06:14:35 PM »
I thought the tax was on servers located in Illinois.  Not Illinois customers of an out of state server (Netflix or Spotify).

If I have this correct, they basically destroyed the tech business on Illinois.

ChicosBailBonds

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Re: Netflix Will Soon Outperform All Major TV Networks
« Reply #17 on: July 05, 2015, 06:24:27 PM »
Chicago tax is a usage tax, not where the services are served from.  Lawsuits already underway to challenge if it is even legal.

http://chicago.cbslocal.com/2015/07/01/congratulations-chicago-you-now-have-a-tax-for-netflix-other-streaming-services/

brewcity77

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Re: Netflix Will Soon Outperform All Major TV Networks
« Reply #18 on: July 06, 2015, 07:04:57 AM »
Chicago tax is a usage tax, not where the services are served from.  Lawsuits already underway to challenge if it is even legal.

http://chicago.cbslocal.com/2015/07/01/congratulations-chicago-you-now-have-a-tax-for-netflix-other-streaming-services/

Classic Chicago...act first, determine legality later.
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Tugg Speedman

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Re: Netflix Will Soon Outperform All Major TV Networks
« Reply #19 on: July 07, 2015, 07:47:21 PM »
City blinks on cloud tax
July 07, 2015

http://www.chicagobusiness.com/article/20150707/BLOGS11/150709877/city-blinks-on-cloud-tax

Score one for the little guy.

It appears the city might spare startups and other small businesses from a tax on cloud-based technology, which sparked an outcry from the tech community, which has been one of Mayor Rahm Emanuel's most staunch supporters.

“Based on feedback we have received from Chicago's vibrant startup community, the administration will be taking measures to provide relief to small businesses so as not to put them at a competitive disadvantage,” a spokeswoman for the mayor said in statement.

The city still isn't clarifying exactly who will get taxed and by how much, nor what kind of "relief" might be in the cards.

“Proposals are being discussed with stakeholders, and we will release further guidance later this month,” the spokeswoman said.

One possibility is using a revenue threshold, perhaps $5 million or $10 million, to distinguish which companies would be exempt from the tax. Such a consideration likely would require formal action from the City Council, however.

“Mayor Emanuel listened to the concerns expressed by 1871 and others in our community and will be introducing exemptions and other relief for startups and other small businesses from these taxes,” according to a statement from startup incubator 1871.

“By ensuring that startups dependent on cloud-based technology are not subject to the tax, the mayor has created an effective solution for our community and reaffirmed his commitment to ensuring that new digital businesses can continue to grow and create jobs throughout Chicago. We are appreciative of the growing vibrancy and economic contributions which the tech community is making to the city and look forward to more opportunities to represent the community and to help shape Chicago's economic future.”

Emanuel's City Hall came under heavy criticism over the past week for plans to extend various taxes to cover tech services, from movie streaming such as Netflix and cloud computing such as Amazon Web Services.

The city said streaming would fall under the amusement tax and cloud services would fall under the personal-property lease tax, which already had been interpreted to include server farms outside the city and software that was licensed rather than purchased.

Tech entrepreneurs increasingly rely on cloud-based computing resources to run their businesses. They were caught off-guard by a little-noticed ruling from the city's Finance Department that extended the 9 percent personal-property tax on "non-possessory computer leases.”

Companies that sell technology, from apps to enterprise software, via subscription initially thought it might require them to charge tax to their Chicago customers, putting them at a disadvantage to competitors outside the city. But it quickly became apparent that the city might intend to tax all Chicago companies on their purchases of cloud-based software or computing services.

Some companies now spend million hosting their software on computers owned by Amazon, Google, IBM, Microsoft and others. Adding 9 percent to that bill gets people's attention.

While startups, for whom cloud services can be their second-largest expense behind payroll, and small businesses might be exempt, big companies still will be on the hook.

Extending the tax is just part of an ongoing effort by state and local governments to keep up with changing technology. Cloud computing, which took off in the past five years, is the Wild West from a tax perspective. Fewer than a dozen states have proposed taxing cloud-based computing infrastructure, with varying degrees of success. Chicago appears to be one of the first cities to propose a tax on cloud computing.

“Chicago's position on lease-transaction taxes applying to cloud computing is pretty far out there and aggressive,” said Michael Gray, a Chicago-based attorney at Neal Gerber & Eisenberg who works with technology companies.

ChicosBailBonds

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Re: Netflix Will Soon Outperform All Major TV Networks
« Reply #20 on: July 07, 2015, 09:40:07 PM »
I've been dealing with the tax attorneys on this the last two days.  What a @!$#!$#@@$ cluster !#!@ this thing is.

We happen to be part of a larger company, but the product is in its infancy.  It is a beta product and price matters. According to the tax guys, the 9% tax COULD actually go to 27.25% based on how it is written.  They are still combing through it. 

Ridiculous on so many levels.  As the one attorney told me, it's as if Chicago thinks that Netflix, or Hulu or any other cloud based service is somehow "better" in Chicago...that Chicago has done something to enhance the service and thus needs to pass on this tax to cover the costs of the betterment Chicago created for said service. 

Such a joke.


mu-rara

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Re: Netflix Will Soon Outperform All Major TV Networks
« Reply #21 on: July 09, 2015, 08:54:19 AM »
I've been dealing with the tax attorneys on this the last two days.  What a @!$#!$#@@$ cluster !#!@ this thing is.

We happen to be part of a larger company, but the product is in its infancy.  It is a beta product and price matters. According to the tax guys, the 9% tax COULD actually go to 27.25% based on how it is written.  They are still combing through it. 

Ridiculous on so many levels.  As the one attorney told me, it's as if Chicago thinks that Netflix, or Hulu or any other cloud based service is somehow "better" in Chicago...that Chicago has done something to enhance the service and thus needs to pass on this tax to cover the costs of the betterment Chicago created for said service. 

Such a joke.


It's Chicago.  It's Chicago.   

(Jabbing at Chicago, not Crean).

ChicosBailBonds

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Re: Netflix Will Soon Outperform All Major TV Networks
« Reply #22 on: July 27, 2015, 09:26:02 AM »
Netflix DVD business still driving profitability for the company, while streaming hopes to break even in 2016.

That's the nature of the digital world right now still.  None of the OTT providers are making any money, most are getting destroyed like Hulu, Amazon Prime, etc, but they have big $$$$ behind them keeping them afloat.


http://www.nytimes.com/2015/07/27/business/while-its-streaming-service-booms-netflix-streamlines-old-business.html?contentCollection=business&action=click&module=NextInCollection&region=Footer&pgtype=article

Tugg Speedman

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Re: Netflix Will Soon Outperform All Major TV Networks
« Reply #23 on: July 27, 2015, 01:10:10 PM »
Netflix DVD business still driving profitability for the company, while streaming hopes to break even in 2016.

That's the nature of the digital world right now still.  None of the OTT providers are making any money, most are getting destroyed like Hulu, Amazon Prime, etc, but they have big $$$$ behind them keeping them afloat.

http://www.nytimes.com/2015/07/27/business/while-its-streaming-service-booms-netflix-streamlines-old-business.html?contentCollection=business&action=click&module=NextInCollection&region=Footer&pgtype=article

Again, your obsession with profits is a signal of business models that work now.  The reason that Netflix and Amazon are "kept afloat" is a lot of people think the current (profitable) business models will be going away and their business models are the future.

Are you looking forward or backwards?

BTW, Amazon just passed Walmart in market capitalization.  Amazon is now worth $250 billion (Walmart $230 billion) and Amazon is now the most valuable retailer in the world.

http://www.denverpost.com/business/ci_28535711/amazons-value-surpasses-walmart-after-surprise-second-quarter?source=rss

When asking what makes Amazon special, consider that Walmart employs 2.2 million worldwide, making it the third largest employer on the planet (the Chinese Army is number 1) while Amazon does the same thing with 154,000 employers.  Restated Amazon is doing the same thing with 7% of the workforce Walmart needs.  The world is changing in epic ways.


Incidentally, only 200 people have ever made more than $7 billion in their lifetime.  Jeff Bezos, founder and CEO of Amazon made that in one day last week.

Bezos Adds More Than $7 Billion to Fortune as Amazon Surges
http://www.bloomberg.com/news/articles/2015-07-24/bezos-adds-more-than-7-billion-to-fortune-as-amazon-surges

Bezos (who also owns the Washington Post) has added more than $20 billion to his net worth in just 7 months.

I highlight this to show you what the market think is the future ... and that does not include looking at what you earned last quarter.

ChicosBailBonds

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Re: Netflix Will Soon Outperform All Major TV Networks
« Reply #24 on: July 27, 2015, 10:11:56 PM »
I'm looking at both.  Real profitability, real returns....and potential returns down the road.  My point is that a lot of people out there probably have no idea that Netflix DVDs keep the business in the black from a profitability perspective.  The margins are great.  The streaming side is massively loaded with costs as far as the eye can see.

That doesn't mean long term there isn't potential, but it also doesn't mean just because it is a shiny toy that everything they do craps out gold nuggets either.

 

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