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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Starting Thursday, Comcast will add TV shows from ABC and Fox to its video on-demand library, making it the only provider that offers shows from all four broadcast networks (including NBC and CBS) as soon as the day after they air. There’s a list of all the TV shows Comcast will be offering in the press release after the break — no Modern Family or House? weak — so the next time you forget to DVR Cops, you’re covered. Also, now that DirecTV has broken the seal on premium VOD early release movies, Comcast also mentioned it is still in negotiations to provide similar access to flicks. With no specifics to announce it’s possible the pricing or windows could differ from what we’ve seen so far, so we’ll just advise Senior Vice President and General Manager of Comcast Video Services Marcien Jenkes to take a long look at our poll results before signing anything.

Continue reading Comcast is first with VOD from all four major networks, still negotiating for early release movies

Comcast is first with VOD from all four major networks, still negotiating for early release movies originally appeared on Engadget on Wed, 27 Apr 2011 15:02:00 EDT. Please see our terms for use of feeds.

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Did you ever have the experience that you walked into a car dealership store, stood your ground talking them down to the value he had in mind and then congratulated yourself for being an excellent negotiator? Though it may be possible that you are, lots of people every day are fooled when they bring an automobile dealer around to a cost they are comfortable with. This is because car dealers prefer to yield on sticker price and then make it all back and much more with a complex deal on an automobile loan that few people could be able to understand.

How do you negotiate for a great price on a vehicle as well as low interest auto loan? Let us check some of the best practices there are for the best in auto loan negotiations.

The mistake that a lot of people make with an automobile loan, especially when you are considering used cars, is that they don’t think about it until they head in to a car dealership and select a vehicle. You don’t want to visit the dealer to know that you have your heart set on a type of used cars you possibly can only get from him. Car dealerships consistently rate as one of the worst places to go to for a low interest car loan for used cars. Online banks and small financial institutions are far better. And lending institutions generally charge far lesser than even that. After getting a loan approval from one of those people, they’ll give you a blank cheque that’s good for anything up to a certain amount. Go to an automobile dealership with a cheque in hand and ask them to beat it if they are able to. It’ll improve your chances of snagging a great low interest car loan.

Each time you apply for a loan, your credit score takes a dip. It doesn’t even matter that you actually take out a loan for it to dip. The very act of applying does it. This makes your very next loan attempt that much more expensive. Make certain you make all your loan inquiries and applications within a 15 day period. Like that, all your applications will count as one loan, and also you won’t be damaging your credit score and shooting yourself in the foot.

Eventually, make sure that you make inquiries by the total loan amount which you wish to take out, and not by how much you want to pay monthly. Loan companies have a great way as making your loan seem much cheaper identifying it by what you want to pay every month. They could easily make you go for a bigger loan by making it last for more time. You just have to drive an old car for longer, and they don’t care.

It’s no secret that the political machine in Washington can be slow… very slow. New legislation — even if it’s potentially vital for the nation’s health — can take months or years to hit the statute books, while politicians engage in their games of horse-trading and back-room negotiations. Take the Startup Visa Act, which was first brought up for debate in 2009 and introduced for the first time last year, has only just now been reintroduced to Capitol Hill by John Kerry and Richard Lugar.

In the meantime, Britain has managed to enact a similar outcome despite undergoing a change of government, debating the ideas and having to institute the changes to immigration laws. In fact, the pace has been so rapid that new rules to grant visas to entrepreneurs will come into force in just three weeks. It’s no surprise officials are crowing about it:

“Entrepreneurs and investors can play a major part in our economic recovery, and I want to do everything I can to ensure that Britain remains an attractive destination for them,” said Damian Green, the Minister of State for Immigration. “Last year we issued far too few visas to those who wish to set up a business or invest in the U.K. — I intend to change that.”

It’s very positive news for entrepreneurs who want to set up in Britain, and should be greeted with cheers for anyone wanting to see the technology scene flourish.

Most of the new rules are aimed at speeding up citizenship for big investors or entrepreneurs who contribute to the economy. In the past, for example, anyone investing large amounts of money in Britain had to live there at least 275 days each year and wait five years before they qualified for citizenship. Now you can speed that up with the amount you contribute to the economy — £5 million ( million USD) will mean you qualify in three years, £10 million ( million USD) will mean citizenship in two years — and you only need to spend half your time in the U.K. Entrepreneurs who bring at least £5 million over three years or create 10 jobs in Britain will be similarly fast-tracked.

The actual startup visa, if you want to call it that, is something different. It modifies the existing visa for entrepreneurs (which currently requires £200,000, or 0,000, of investment) so they can potentially become residents with just £50,000 in funding. Achieving that requires that you’re designated as a “high-potential business,” though what that means isn’t exactly clear.

Still, it’s testament to the work of people like Reshma Sohoni, who runs the Seedcamp mentoring program, and local venture capitalist Alex Van Someren, of Amadeus Capital, who have worked on the rules. It’s a remarkable achievement, really, given the anti-immigrant position the ruling Conservative party has traditionally dabbled in — but then I suppose hundreds of millions of investment is enough to change most people’s minds.

It’s already being cheered on by British tech media, who are reveling in the fact that they’ve beaten their transatlantic cousins to the punch. But for anyone downhearted by slow progress in Washington, it’s worth remembering a couple of things.

To begin with, the U.K. already had something like the proposed U.S. version, since entrepreneurs with 0,000 were eligible. This just lowers the bar a little more.

Then there’s the fact that Britain, which has a population of approximately 60 million people, already has access to a pool of more than 400 million potential immigrants, since it’s part of the European Union. That means any citizen from one of 27 European countries, from Ireland in the West to Cyprus in the East, can live and work freely in Britain if they choose to. It even means, thanks to the bizarre quirks of empire, that individuals from the South American territory of French Guiana or the Caribbean island of Martinique are able to do the same.

And one of the crucial elements of the latest American proposals — allowing workers to switch from an H1-B with only a minimal barrier — doesn’t apply to the British system, where there are now extra allowances from switching from a U.K. work visa that’s tied to your employer.

Don’t get me wrong; there are plenty of reasons to be pleased about a British startup visa, but Silicon Valley need not get too downhearted just yet.

Image courtesy of Flickr user mroach

Related content from GigaOM Pro (subscription req’d):

• Why Startup Visas Don’t Go Far Enough
• Why iPad 2 Will Lead Consumers Into the Post-PC Era
• The Near-Term Evolution of Social Commerce

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The world’s worst manager, Jeff Zucker, who just so happens to be the president of NBC Universal, was on Capitol Hill today trying to persuade lawmakers to allow the proposed merger with Comcast go through. Interesting to note his take on Boxee’s relationship with Hulu, which, you’ll recall, has been something of a mess. Boxee adds Hulu compatibility, Hulu breaks said compatibility, Boxee re-works its code so that Hulu works again, Hulu breaks compatibility again, etc. And on and on and on.

Anyhow, here’s the relevant exchange, as carefully jotted down by Boxee’s point guards :

Rep. Rick Boucher (D-VA): What about Boxee? Mr. Zucker you probably are in a better position to answer that. Did Hulu block the Boxee users from access to the Hulu programs?

Zucker (NBC): This was a decision made by the Hulu management to, uh, what Boxee was doing was illegally taking the content that was on Hulu without any business deal. And, you know, all, all the, we have several distributors, actually many distributors of the Hulu content that we have legal distribution deals with so we don’t preclude distribution deals. What we preclude are those who illegally take that content.

Rep. Rick Boucher (D-VA): “Well would you have negotiations with Boxee upon request?”

Zucker (NBC): “We have always said that we’re open to negotiations.

This is truly dramatic stuff, congressmen going back and forth over the fate of such items as “Chuck” and “The Biggest Loser.”

Anyhow, Boxee’s aforementioned point guards would like to point out the obvious, that whenever someone visits Hulu via Boxee, they’re doing so in the same manner as you would if you were to type www.hulu.com into Firefox or Internet Explorer. Boxee isn’t working any voodoo here—certainly isn’t “hacking” anything—when viewing Hulu.

The same principle applies when you use Plex on Mac OS X: you’re merely accessing the feed, so to speak, that Hulu provides. There’s no chicanery going on.

My guess is that this is all about money, and that the relevant parties haven’t agreed upon a dollar amount yet. I mean, it’s ludicrious to charge people to view Hulu on Boxee—again, there’s no charge when you type in www.hulu.com into you Firefox address bar—since you’re seeing the same content, ads and all, but this is the world we live in.

I wonder: would NBC want money from me if I were to connect my laptop to my TV, then watch Hulu in plain ol’ Firefox? I mean, what’s the difference, besides navigating a prettier UI to get to Hulu?