Poor Netflix has had a rocky six months.  It’s like having a friend go into complete, total meltdown and trying to decide when you should start planning the intervention.

After Netflix announced it was splitting its streaming and DVD delivery services into two separate companies, they made a complete 180-degree turn and combined the services again.

Just this week, Netflix announced their Q3 earnings, and while they met expectations, they lost 800,000 subscribers. Now the market is punishing them. In after-hours trading just after the announcement, they lost nearly 30 percent of their stock value. In opening trading the next morning, they were down another 10 percent. While all that loss may not have been avoidable, the industry is wondering why Netflix decided to make this move so quickly.

Colin Dixon of The Diffusion Group (TDG) succinctly referred to this whole event as “premature bifurcation.” And he’s right – many of us within the industry may have seen this split as inevitable, but the timing and the way Netflix has handled this announcement hints at a larger, more complex situation.

Why break up with yourself?

Why would Netflix choose to split itself apart?  And why completely change the name and make two different services to interact with their company?

It all started with the Starz negotiations: Netflix landed a great deal with Starz in 2008. For only million, Starz gave Netflix access to some pretty good movies to stream because the perceived value of streaming was very low at the time.

Fast-forward to 2011. Netflix is now available on so many devices and touting the largest subscriber numbers for a MSO, so the perceived value of that license goes up quite a bit. This makes it a lot harder for Netflix to negotiate cheap prices; hence the very public break up this summer.

So, how does Netflix improve its bargaining position? Oddly enough, by weakening themselves (or at least appearing to be weaker), they position themselves to negotiate for a better price. Let me explain: by splitting the two entities apart, they show much lower subscriber numbers to potential licensees as reasoning for lower pricing. By still having the two companies under one roof, Netflix gets to play the beggar during negotiations for streaming in regards to subscriber numbers, while still offering combined DVD & streaming licenses as an incentive. Therefore, a “weaker” Netflix might have been stronger from a negotiation standpoint.

The problem is, they couldn’t come out and just say that, so instead we get the standard Netflix hubris, disingenuous apologies, and some new branding.  And ironically, now Netflix is much weaker than it planned.

Experience teaches at the cost of mistakes

Despite all the missteps, I still would like to see them succeed. Netflix may be down, but they definitely aren’t out of the game.  Let’s face it, they still have the largest online subscriber base for video content, they have announced rollout plans in new markets, and have recently announced some great new content deals.

Unfortunately, the industry is still learning what customers do and don’t want. Netflix is our canary in the coal mine as they find new and exciting ways to create a burgeoning business model while pissing off content makers and alienating their own customers in the process.

If Netflix doesn’t rebuild itself soon, then maybe it is time for that intervention. And if this WSJ article is correct, that intervention could come in the form of takeover interest. Either way, to regain subscribers and prove the streaming business case, Netflix needs to get back to signing content deals.

Andy Beach is Vice President of Marketing and Product Development at SeaWell Networks, a Canada-based company that specializes in online streaming video delivery. 

Image courtesy of Flickr user jcoterhals.

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We’re not exactly lacking in ways to interact with a screen from afar, but the folks at Teehan+Lax have now put an augmented reality-enhanced spin on things with their so-called Touch Vision Interface. While the “how” behind it is no doubt complicated (and being kept largely under wraps at the moment), the end result is fairly simple: you just point your smartphone at a screen (or two) and start manipulating it from the point of view provided by the phone’s camera. Of course, it’s all still in the early stages right now, but group sees a wide range of applications for the system — even including large outdoor billboards. Check it out in action in the video after the break.

Continue reading Touch Vision Interface employs AR to control screens from afar

Touch Vision Interface employs AR to control screens from afar originally appeared on Engadget on Sun, 11 Sep 2011 08:39:00 EDT. Please see our terms for use of feeds.

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There’s one big, table-shaped obstacle to developing apps for Microsoft’s Surface: you kind of have to own one. A new Surface 2 SDK, landing this summer, will sidestep that problem with an input simulator so devs can test their code on any Windows 7 PC. You can tap fingers, place tags, or paint “blobs” for your virtual SUR 40 to interact with, and even fake multitouch gestures by “stamping” a finger in one spot then moving a second one. If the Surface you’re programming for happens to be movable (though we’re not sure who would put a ,600 computer on hinges) you can also alter the tilt of the display to trigger UI changes. You’ll still need access to one of these behemoths to make sure your wares work in the really real world, but at least the preliminary work can be done on any old laptop or desktop. Frankly, this is something we’d have thought would be included from day one — as they say, better late than never.

Surface SDK gets input simulator, opens doors to indie devs originally appeared on Engadget on Wed, 04 May 2011 22:53:00 EDT. Please see our terms for use of feeds.

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Please see PART 1 of this video first – www.youtube.com At TED India, Pranav Mistry demos several tools that help the physical world interact with the world of data – including a deep look at his SixthSense device and a new, paradigm-shifting paper “laptop.” In an onstage Q&A, Mistry says he’ll open-source the software behind SixthSense, to open its possibilities to all. To know more, visit – www.ted.com
Video Rating: 4 / 5

www.gnomedex.com – Want to interact with a Microsoft Surface? All you need to do is register to attend Gnomedex this year. We’ll have plenty of Surface software for you to play with.
Video Rating: 4 / 5