Verizon and Redbox hope to give consumers an option that is a “simple and affordable way to access the video entertainment they crave.”

Speaking about the partnership, Coinstar CEO Pau Davis said:

“Consumers rely on Redbox for the latest new release movies at a great value, and our joint venture with Verizon will enable us to bring them even more value by offering expanded content offerings and greater flexibility for how and when they enjoy entertainment.”

“Together, we are erasing old technology boundaries, freeing people to spontaneously enjoy the entertainment they want, whenever they choose, using the devices and media they prefer, at home or away,” added Bob Mudge, Verizon’s President of Consumer and Mass Business Markets.

Since the unnamed service is very similar to Netflix, a lot of people are wondering what will happen to it once this new venture launches. What’s more, the past several months have been rather rough for Netflix after it dramatically raised its prices last September. Consumers were outraged and some even dropped the service, as Bryan Gonzalez, the Director of Social Entertainment Labs at the Entertainment Technology Center at USC, explained in this video:

WebProNews recently caught up with Gonzalez again to talk about this latest development. According to him, Netflix has to continue to focus on its content in order to effectively compete with Verizon and Redbox’s service.

“For Netflix to really continue competing, I think they’re really gonna need to push hard and try to get as much content up front as possible,” he said.

“As long as Netflix keeps that drum beat of fresh content – new content – to their streaming sector, I think they’ll do fine,” he added.

Should Netflix be worried? What do you think?

Gonzalez went on to raise an interesting point about the deal between Verizon and Redbox. As he explained, Netflix’s actions last year were part of a bigger effort to move away from its DVD service. However, it seems that this new venture focuses on the DVD side, which he believes could be due to accessibility issues that so many Americans face.

“A lot of Americans still don’t have very fast Internet connections, so streaming quality isn’t as great necessarily for everyone as a DVD or a Blu Ray,” Gonzalez pointed out.

Another potential issue he raised was in regards to Verizon’s current FIOS cable TV service. At this point, Verizon’s FIOS program is not national, but one can’t help but wonder what will happen since the new venture seems to contradict it.

These details and others were not disclosed in the announcement but are expected to come as the launch date gets closer. The companies said the new service would be available during the second half of the year.

The current 28-day new release window came about in June of 2010, as the result of an agreement whereby Netflix accepted the gap between home video release and rental availability in exchange for rights to stream more of the studios’ content. This time around, Warner Brothers has increased the window without giving anything at all back.

This latest move against Netflix, Redbox, and Blockbuster follows a similar move against Blockbuster in October. Without asking permission first, Blockbuster made several new releases from Warner Brothers available for rent on the same day that they were available for sale. Warner Brothers retaliated by applying Netflix’s 28-day gap to Blockbuster.

As DVD sales and theater attendance have dropped in recent years, Hollywood’s increasing panic has driven the search for a scapegoat. Since the answer could not possibly have anything to do with increasing ticket and DVD prices and decreasing movie quality, the industry’s eye has fallen on Netflix (and the movie rental industry in general), and on piracy. As they combat the latter with legislation, they have been using every means at their disposal to make life as difficult for Netflix as possible, apparently believing that people who cannot rent a movie will simply go buy it instead. This is just the most recent of the entertainment industry’s efforts to resist the march of technological progress. Nearly every advance in entertainment technology – from the radio in the 1920s to VCRs and casette tapes in the ‘70s and ‘80s – has supposedly heralded the collapse of the entertainment industry.

Unfortunately, we can probably expect the entertainment industry to continue its staunch opposition to the forward march of technology. Which means that Netflix, Hulu, Redbox, Bitttorrent, and pretty much any means of accessing content that doesn’t line Hollywood’s pockets will continue to be the bad guy for the foreseeable future.

What do you think of Warner Brothers’s decision to increase the release window? Sound off in the comments.

[Source: All Things D]

The oft-discussed and ridiculed Netflix price changes are going to go into effect in two days. That’s right, those of you who want both streaming and DVD rentals, on September 1st, be prepared to pay more for these services. In case it slipped your mind, here’s a refresher concerning the Netflix price changes:

Plan 1: Unlimited Streaming (no DVDs) for $7.99 a month
Plan 2: Unlimited DVDs, 1 out at-a-time (no streaming), for $7.99 a month.

That’s all fine and good, but to have both streaming and rentals, the price goes up to $15.98 a month. For those of you who are like me and have both options, it means you’ll either:

A. change your plan to either streaming or DVDs, or,
B. prepare to pay more the for the ability to have both.

Needless to say, when Netflix announced these adjustments, the proverbial poop hit the fan all over the Internet. Netflix’s Facebook page was inundated with replies–most of them negative–as was Netflix’s blog post that announced these changes.

To date, the Netflix Facebook discussion as reached over 80,000 comments. The blog post in question quickly hit the 5000 comment threshold, and there are an additional 12,000-plus comments from the Facebook/Blogger plugin that allows users to comment on a post via their Facebook account.

That’s almost 100,000 responses to the Netflix price hike, courtesy of social media, and I haven’t even included anything from Twitter, which would undoubtedly push this total well over the 1 million comments mark. That’s a lot of feedback, and most of it was not in agreement with Netflix’s decision.

Is the price hike and subsequent backlash the very definition of a first world problem? Perhaps, but people love their movies, and they don’t like price increases. Considering the social media world we live in, such reaction was inevitable. With that in mind, allow us to end where we began:

The Netflix price changes will be arriving in two days, or, depending on when you read this, September 1st. Much like daylight savings, don’t forget to adjust your account accordingly, unless you want to get snagged by unwanted increases on your debit/credit card.

Luckily someone is looking out for those affected by this horrendous tragedy, The Netflix Relief Fund.

“Tsunamis… wars… earthquakes… but one tragedy eclipses them all… Netflix has raised their prices. This is literally the worst thing that has ever happened to white people.”

As the video states: For just dollars a month you can help an upper middle class American keep their access to DVDs and streaming. Will you do your part?

Did anyone expect to hear a Sarah Mclachlan song playing?

In this week’s earnings call, Hastings said that he was surprised that there wasn’t more of a backlash from angry Netflix users. Basically, “why aren’t you guys more pissed off?”

From my perusal of the internet response, I came to the conclusion that people were pretty peeved. I mean, I can’t tell you how many tweets, blog comments and Facebook posts I saw that read something like “F*ck you, Netflix, I’m gone.”

But according to a new survey by The Diffusion Group (TDG), people might not follow through on their original anger. Although 70% said that they were upset by the new Netflix pricing structure, TDG predicts that only about 12% to 15% of streaming/DVD subscribers will cancel their membership altogether. For Netflix, that would come out to a loss of 2 to 2.5 million subscribers.

This definitely seems like a manageable loss for the company to take if the pricing changes help them move forward in their new direction – eliminating DVDs in favor of streaming-only.

What will dual subscribers actually do, if most of them will stick with Netflix at least in some regard?  Here are some more stats from the survey -

• 34% are likely to cancel the streaming service and keep the DVD service
• 44% are likely to cancel the DVD service and opt for streaming only
• In all, 37% say that they are debating cancelling some part of their Netflix package
• Of those who choose to cancel their Netflix subscription, 42% said they would be relying on Redbox in the future, 17% would turn to Hulu plus, and a small percentage would switch to iTunes or Blockbuster for their movie needs

This seems to work out in a predictable manner. More people are planning on cancelling the DVD portion of their plans as opposed to the streaming. This confirms the eventual goals of Netflix. In the earnings call, he dropped the stat that almost 75% of new subscribers are going streaming only.

Of course there are some people who will hang on to the physical DVDs for a while – hence the 34% who said they would cancel streaming. Netflix’s streaming catalog is not extensive enough right now to carry the entire business. People will want more. Netflix will be hard at work in the upcoming months licensing new content.

In other Netflix news, the company is making some strides in their Non-American markets. Yesterday, they announced that they will offer Facebook integration in Canada and Latin America (the U.S. integration is being held up by a legislative decision). And today, they announced a new streaming deal that brings Showtime and CBS shows to Canada and Latin America.

[Lead Image Courtesy Cheezburger Network]

If you’ve been living under a rock for the past couple of weeks, a rock that is not located on the internet landscape, here’s a brief recap of the Netflix hullabaloo:

The company announced earlier this month that they were doing away with the unlimited streaming / DVD combo plan in favor of separate plans for streaming and DVDs. Each will cost $7.99. Users that were paying $9.99 for unlimited streaming and 1-DVD-at-a-time rental will now pay $15.98 for the same service.

It should come as no surprise that people were a bit incensed after hearing this news.

But according to Netflix CEO Reed Hastings, people weren’t as pissed off as he thought they would be.

During Netflix’s earning call yesterday, Hastings had this to say about the backlash from the price hike –

Believe it or not, the noise level was actually less than we expected, given a 60 percent price increase for some subscribers. We knew what we were getting into, we tried to be as straightforward as we could, and that has worked out very well for us.

So Hastings knows that it was a huge change. That fact isn’t lost on him. But he seems to think that they can weather the storm. Maybe so – Netflix has a loyal following. But how loyal? Could people possibly jump ship to Redbox, cable providers or Blockbuster? A recent report shows a plunging brand perception following the price hike. Should they be worried?

To this writer, it seems as though Hastings knows that the price change was necessary in order to achieve a long-term goal: to phase out physical DVDs altogether. Here’s some more from the earnings report, where they discuss declining DVD interest and their focus on streaming –

We’ve spoken frequently of how we are directing savings generated from declining DVD demand into additional streaming content and marketing. During the quarter, we substantially increased sequential spending on streaming content as titles from our new content deals (discussed below) became available for streaming. At the same time, though, we maintained a disciplined approach to what content we license and at what price, spending somewhat less on streaming content than we budgeted for in the quarter. Also, DVD shipments came in even lower than forecasted, in part due to the popularity of our streaming only plan.

I plan to deal with the Netflix price change by dropping my DVD plan entirely and going streaming only. Netflix doesn’t even get most new releases until a month after they come out anyways. Any DVDs i need I can grab from Redbox. I’m sure many others share my decision.

Streaming is the future. Do you agree? Let us know in the comments.

It’s also not news that Netflix is changing the way people watch movies.  And the rise of a major streaming service is of course going to cut into the market share of hard-copy options like DVDs and Blu-rays.  But new internal search data from Google paints a pretty bleak picture for Hollywood and their reliance on DVD sales as a major source of revenue.

BTIG Research analyzed a research note published by Google earlier this month and found that searches for Netflix are shooting through the roof.  On the other hand, DVD related queries like “New Releases DVD,” “Movies on DVD,” “DVD rentals” and just plain “DVD” are very low in volume – and declining.  So if you go by search, the DVD is on its way to the grave, and going there fast.

A couple of notes about the entire BTIG report, from All Things Digital:

• Google says query volume for “Netflix” peaked in February 2011, but grew more than 90 percent in both 2010 and 2009.
• That growth isn’t simply a result of Netflix adding more subscribers–it’s the result of Netflix subscribers using the Web more frequently. Google says queries per subscriber grew more than 40 percent last year, presumably as people looked to see what they could stream.
• DVD sales finally peaked in 2007, but Google queries kept climbing through 2008. Google’s explanation for this is confusing: “The shift in online behavior driven by the increased ability to buy and research DVDs via the Internet compensated for the decreased desire to own physical DVDs. The result was strong growth in search activity for terms including ‘DVDs,’ ‘new movies on DVD,’ ‘new DVD releases,’ among related other generic DVD terms.”

From the looks of this, Hollywood is going to have to fully embrace the world of streaming video.  The most recent discussion of this is with Premium Video on Demand, the $30 a pop service where major studios are offering not-yet-on-DVD films to families for a hefty price.  The availability and affordability of streaming content has grown in the past couple of years, and movie-watchers have embraced the change.  It looks as though physical possession of films is not that important anymore, and if that trend continues the DVD is destined to quickly go the way of the CD.

One of the more interesting things about the above chart is the sharp decline in “Free Movie” terms that includes searches for torrents.  In no way do I think movie downloading in on the decline.  This decline in search probably just means that people aren’t searching for places to find torrents.  They already have sites that they trust, and they start from there when searching for a specific torrent file.

Reuters is reporting on comments by Aaron Greenberg, group product manager for the XBox 360, that Microsoft is not currently in talks with Sony or the Blu-Ray Association to integrate Blu-Ray into the XBox 360.

This is disappointing.

With Netflix and other major retailers offering Blu-Ray discs it’s unfortunate that in order to watch them you won’t be able to do it on an XBox 360 Media Center Extender anytime soon.

The beautiful thing about the XBox 360 is the consolidation that it represents into a single box. DVD player, extender unit for your TV and DVR, game machine, photos, music, etc. All in a single box connected to your television. A single box solution. No other set top box can do all of that. Certainly consumers want high def DVDs. The fact that Microsoft previously developed an add on for HD DVD speaks to that. The fact that there now seems to be no plans to integrate Blu-Ray, after that format has proved to be the survivor, seems short-sighted.

Comments

The contract between the 12,000-member Writers Guild of America and the Alliance of Motion Picture and Television Producers lapsed on October 31. Negotiations that started this summer did not make much progress on the writer’s request for a larger portion of DVD profits and revenue from the distribution of films and TV shows on the Internet.

Writers and producers met for negotiations Sunday at the request of a federal mediator. The two parties were in talks for close to 11 hours before East Coast members of the writers union said via their Web site that the strike had started for their 4,000 members. Producers said writers turned down a request to "stop the clock" on the strike while negotiations continued. Producers called the writer’s decision to strike unfortunate and irresponsible.

Writers said they dropped a proposal requesting a larger share of revenue from the sale of DVDs that had been an issue for producers. They added that proposals by producers about the Internet reuse of TV episodes and films were not acceptable. "The AMPTP made no response to any of the other proposals that the WGA has made since July," writers said.

This is the first strike by writers since 1988. That strike lasted 22 weeks and cost the industry over $500 million.

Programming that will be immediately affected are talk shows like "Late Night with David Letterman" and "The Tonight Show Starring Jay Leno" which will begin airing reruns today. Next to feel the impact would be sitcoms and soap operas, followed by dramas.

Movies will not feel the impact of the strike for several months, but the strike could stall production for movies that are scheduled to be released in 2008.

Toshiba spokeswoman Jody Sally said that Kmart has decided to carry HD DVD instead of Blu-ray because of its lower price according to Home Media Magazine. The Toshiba HD DVD player sells for $299 but is available for $198 at a number of retailers including Wal-Mart and Circuit City.

Kmart will continue to sell the Playstation 3, which has a Blu-ray player inside, but its marketing will be concentrated on HD DVD. The least expensive Blu-ray player retails for $499 and Sony says it will launch a $399 Playstation 3 next month.

Craig Kornblau, president of Universal Studios Home Entertainment, which supports HD DVD said the $200 price will help to reach a mass audience. Sally agreed that the lower price would help sales.

"There was no official move on our MSRP, but I’m happy to see the strong sales momentum on our players," Sally said. "We experienced a great lift in player sales when Transformers (Paramount) was released, and the strong momentum continues."