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Forums - Sales Discussion - More Consumers Are Choosing Online Over DVD's - CNNMoney

With the ailing economy, customers are looking for ways to save money - Online streaming is one of these solutions

The positive impact this will have on the 360 and Netflix partnership is yet to be seen, but so far things look rosy for Netflix having just reported one million new subcription through the Xbox 360.

http://money.cnn.com/news/newsfeeds/articles/djf500/200902090815DOWJONESDJONLINE000231_FORTUNE5.htm

SAN FRANCISCO -(Dow Jones)- For an idea of what's vexing U.S. entertainment industry executives these days, take a look at how Todd Mundt in Louisville, Ky., watches television and movies.

Eager to save money, the public radio station employee canceled his cable- television subscription, opting instead to get his favorite shows from a host of free streaming video sites, including Hulu.com, a joint venture of General Electric Co.'s (GE) NBC Universal and News Corp. (NWS). Rather than rent DVDs from Blockbuster Inc. (BBI), Mundt streams movies from Netflix Inc. (NFLX), a cheap and convenient substitute.

Mundt is one of a growing tide of consumers that over the last year or so have begun cutting their cable television subscriptions and shunning DVDs as more content becomes available online and faster broadband connections reach more parts of the country.

Mundt estimates he's saving at least $50 a month by getting his entertainment over the broadband connection he would pay for anyway just to have access to the Web. His prowess at finding entertainment online has also made him the envy of friends and colleagues.

People, particularly young people, are saying all I need is broadband," Time Warner Cable Chief Executive Glenn Britt said recently. "The danger here is...people will choose not to buy subscription video."

Internet delivered movies also threatens to undermine the $14 billion in revenue that movie studios generate by distributing their titles on DVDs. That's because many consumers are asking themselves why they should buy a disc when the same movies are available over the Internet, often at a big discount or for free.

Not all companies will suffer and already potential winners are starting to emerge.

Netflix, the online DVD rental and movie streaming company is a favorite among converts to online entertainment. The Los Gatos, Calif.-based company offers unlimited movie streaming from its 12,000 title catalogue for just $9 a month.

Apple Inc. (AAPL) and Amazon.com Inc. (AMZN), both of which operate successful online streaming services, are also already benefitting, as is software giant Microsoft Corp. (MSFT). In the past three months, owners of Microsoft Xbox 360 game consoles have bought packages that let them stream Netflix titles over their game machines and have watched 1.5 billion minutes of programming over that period.



Proud Member of GAIBoWS (Gamers Against Irrational Bans of Weezy & Squilliam)

                   

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gebx said:

With the ailing economy, customers are looking for ways to save money - Online streaming is one of these solutions

The positive impact this will have on the 360 and Netflix partnership is yet to be seen, but so far things look rosy for Netflix having just reported one million new subcription through the Xbox 360.

 

I thought that was 1M 360 users streaming Neflix, not 1M new Netflix subscriptions.

Anyway, streaming in general seems to be picking up steam.  I had a few friends pick up Netflix streaming Blu-Ray players this holiday as well.  Streaming may well be the final nail in the coffin of video stores.  It would not suprise me to see Blockbuster out of business in a year or two.

 



Microsoft estimates streaming revenue currently accounts for less than .06% of a movie studio's revenue. I think the phrase "growing tide" may be a bit of an exaggeration.

--"One recent study found that movie downloads make up only 0.06 percent of studio revenue, said Jan Saxton, an analyst with Adams Media Research. She said her firm estimates that the return is a little higher but is still tiny."
http://tech.msn.com/news/articlecnet.aspx?cp-documentid=15967871&page=2



Thanks for the input, Jeff.

 

 

It will take longer than a year or two for Blockbuster to go under.

But they will start feeling the pain soon, I would imagine.

Also, cable TV is feeling it

http://www.podcastingnews.com/2008/10/09/new-trend-hits-mainstream-people-dropping-cable-for-internet-video/

Mike from Morgantown



      


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mike_intellivision said:
It will take longer than a year or two for Blockbuster to go under.

But they will start feeling the pain soon, I would imagine.

Also, cable TV is feeling it

http://www.podcastingnews.com/2008/10/09/new-trend-hits-mainstream-people-dropping-cable-for-internet-video/

Mike from Morgantown

Time Warner Cable blamed downloads for the most recent quarterly losses.

"The reality is, we are starting to see the beginning of cord-cutting," he told analysts during a conference call. "People will choose not to buy subscription video if they can get the same stuff for free."

 

 



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WiiStation360 said:
gebx said:

With the ailing economy, customers are looking for ways to save money - Online streaming is one of these solutions

The positive impact this will have on the 360 and Netflix partnership is yet to be seen, but so far things look rosy for Netflix having just reported one million new subcription through the Xbox 360.

 

I thought that was 1M 360 users streaming Neflix, not 1M new Netflix subscriptions.

Anyway, streaming in general seems to be picking up steam.  I had a few friends pick up Netflix streaming Blu-Ray players this holiday as well.  Streaming may well be the final nail in the coffin of video stores.  It would not suprise me to see Blockbuster out of business in a year or two.

 

I think you may be right.. I might be misintreperting the news.. I'm not sure if they mean new users to netflix or just current netflix users switching to the 360 service.

 

"That's the unpopular stand, it seems, as Microsoft and the video rental site on Thursday announced that more than 1 million Xbox users have downloaded and activated the movie service since it was introduced on the game console in November of last year. That translates to more than 13,000 users a day. "

http://news.cnet.com/8301-17938_105-10158106-1.html

 



Proud Member of GAIBoWS (Gamers Against Irrational Bans of Weezy & Squilliam)

                   

Getting Netflix was a very shrewd move for MS. It'll really benefit them over the course of this generation. I've stopped buying DVDs (I refuse to rebuy any movies I already own on VHS/DVD in a new format like Blu-ray) I'd sooner just go totally digital.

As for Blockbuster, I think they are already depending on game rentals to stay alive. If games become totally downloadable to consoles, Blockbuster is toast.



 

All that porn being downloaded.



I haven't purchased a dvd in months. I get everything I could ever want between Netflix, Hulu and Amazon.



Yup, I don't buy DVDs anymore (2 months) - Netflix is keeping me busy with movies.

Netflix Streams 1.5 Billion Minutes of Video to XBox 360
http://seekingalpha.com/article/119115-netflix-streams-1-5-billion-minutes-of-video-to-xbox-360