Netflix has announced that it will begin operating in The Netherlands later this year, further expanding its European footprint. The Netherlands, Netflix’s seventh European country, is a relatively small market for the streaming video service, but in keeping with Netflix’s more cautious approach to moving into new countries after its aggressive international expansion last year lost money.

After breaking into several international markets, including the UK, Ireland, Norway, Denmark, Sweden and Finland, in 2012, Netflix said in January that it would dramatically decrease the rate of its overseas expansion in 2013. During the past six months, Netflix has not launched in any new countries.

In its first-quarter earnings report this April, Netflix said that it expects a profit of up to $149 million from its U.S. streaming business in the second quarter, but losses of up to $81 million from its international streaming in 40 countries. The company’s U.S. business is also given a boost by its DVD-by-mail segment, which will contribute additional profits of up to $112 million.

Netflix now has 7.1 million international users in Canada, Great Britain, Ireland, Scandinavia and parts of Latin America and the Caribbean. The streaming video company currently has 29.2 million streaming subscribers in the U.S.

The company did not give any details about its catalog or pricing, but it did say that users in The Netherlands will get access to Hollywood-produced, local and global TV series and films, including Netflix Original Series “House of Cards” and “Arrested Development” on their mobile devices, PCs and game consoles. A site for The Netherlands is now open for notification sign-ups.

Article courtesy of TechCrunch

Following a bit of backlash arising from the loss of popular Viacom-owned children’s TV shows, Netflix today launched Netflix Families, which is essentially just a destination website designed to tout Netflix’s family fare. The site includes rows of Netflix recommendations for parents and kids, as well as tips on how to stream and other promotional content.

Amazon, not to be left unmentioned in today’s news, countered with an announcement of its own.

These moves come at a time when the war for streaming is heating up between Netflix and up-and-coming rival Amazon Prime Instant Video. Earlier this month, Amazon picked up the Viacom shows Netflix lost, including big-name kids’ TV brands like Dora the Explorer, Go Diego Go!, SpongeBob SquarePants, Blue’s Clues and several others.

Parents had earlier stormed Netflix’s consumer support site to complain about the losses, having already been burned by other ill-fated moves from the company in the past (like that Qwikster fiasco which became the symbol of Netflix “not listening,” CEO Reed Hastings once said.)

In addition to the new Families site, just yesterday Netflix also announced its largest original content deal to date with DreamWorks Animation, home to brands like Shrek and Kung Fu Panda. The deal involves some of DreamWorks Animation’s characters moving into TV (Shrek, most likely), in a branded collection of shows that will comprise more than 300 hours of new programming. The company also recently scored a content deal for other kids’ TV like “Jake and the Neverland Pirates” from Disney and Cartoon Network’s “Adventure Time”.

These titles, and more, will now be promoted on the Netflix Families website.

Not to be outdone, Amazon is also heading off this morning’s launch of the Netflix Families website with news of its own: the company released a progress report on Kindle FreeTime Unlimited, its optional service designed for parents with kids ages 3-8 which offers a variety of books, games, educational apps, movies and TV shows that play on Amazon Kindle Fire devices.

While FreeTime offers parental controls, Kindle FreeTime Unlimited is a paid add-on ($2.99 per child or $6.99 per family) which Amazon today says now combines over a thousand books, games, educational apps, movies and TV shows, including Disney’s “Where’s My Mickey?”, Warner Brother’s “LEGO Harry Potter Years 1-4″, “Dr. Seuss’s The Cat in the Hat Comes Back” from Oceanhouse Media, “Plants vs. Zombies” by EA, and Houghton Mifflin Harcourt’s “Curious George at the Zoo”.

Also added to FreeTime Unlimited? Yes, several Nick Jr. favorites – the recently acquired Viacom shows Netflix lost.

Other new arrivals include “Scribblenauts Remix” from Warner Bros., Disney’s “Puffle Launch” and “Toy Story Smash It! Classic”, EA titles like “Tetris”, “Bejeweled 2″, “Monopoly Millionaire” and “The Game of Life”, apps like “Curious George at the Zoo”, “The Berenstain Bears and the Big Spelling Bee”, “Mercer Mayer’s Little Critter and Triceratops Gets Lost from the Smithsonian Institution”, and more. (It’s a decent B-list of kids’ titles, for those without rugrats around to inform you).

Neither Amazon nor Netflix’s announcement today is the equivalent of what one would call major news, of course. One is a destination site to educate and promote Netflix’s children’s programming, while the other is an update on what’s available with Kindle FreeTime Unlimited.

What is interesting about the news is that both companies seemed to have decided that where the children go, so go the parents. The war for streaming is resting on families’ youngest members – a generation of viewers who have born into a world where tablets already exist, and who can navigate their way around the devices better than their parents in many cases. It’s these little ones the streaming giants will now be catering to.

Paying for a streaming video service on top of other in-home entertainment bills like cable TV and high-speed internet is still a luxury add-on for most families in a down economy like ours, and that means either Netflix or Amazon will win customers family by family, instead of counting on families to sign up for both. It’s also the same reason why other streaming video services, like Redbox Instant for example, have trouble getting off the ground.

Expect this battle to continue to heat up later this summer as well, when Netflix finally reveals its long-awaited user profiles, which will give kids and parents their own window into Netflix content, personalized recommendations, and more. And if Netflix is smart about things, hopefully it will also introduce parental controls and other Kindle FreeTime-like features, too.

Article courtesy of TechCrunch

There is no shortage of apps on the market to help users find new, interesting videos to watch and enjoy. But video discovery startup Squrl still thinks there’s work to be done. The company just released a new version of its iPhone and iPad app that provides new ways to share with friends and find content that is more personally relevant to them.

The new version of Squrl comes with a big redesign that breaks down the design and puts the content or categories that are most important on the front page of the app. There are now nine options available on the home screen, highlighting Featured videos and What’s Hot, as well as Channels, Recommendations and what users have liked, watched or added to their queues.

The typography has gotten bigger and there are simpler icons to click on. And once users have clicked on a certain icon, that icon changes dynamically to highlight content that viewers will see in that section. That gives a little bit of a preview into what’s available to users.

Those cosmetic changes are designed to simplify navigation throughout the app, but Squrl has done a lot more under the hood to improve recommendations and provide more relevant videos. The app combines the search and customize options so that users can customize the channels from within that screen.

There’s also been a big upgrade to its recommendations engine, which uses collaborative filtering and interest-based matching to serve up videos based on what its users have already watched. The app needs users to watch about four or five videos to get started, but once that’s happened, it creates a stream of videos that should interest viewers.

With the update, Squrl has also made its app more social. While it has always been easy for users to share with their friends and followers on Facebook and Twitter, they can now share content and communicate with others within the app, as well. It’s improved the Find Friends feature inside the app, and enabled private messages so that users can share videos and chat privately with each other.

Squrl provides access to videos from a whole bunch of on-demand and live aggregators, including YouTube, Netflix, Hulu, TED, Vimeo, Aol, and Blip.tv. Users who want to download the newest version of the app can get it here.

Article courtesy of TechCrunch

It’s a nuisance many Netflix users are familiar with–you log-on to watch something from the Criterion Collection, only to find that your recommendations are now littered with “Dora The Explorer” or “Say Yes To The Dress” because someone in your household with less erudite tastes in streaming entertainment used your account. Fortunately, Netflix Vice President of Product Innovation Todd Yellin confirmed at E3 that Netflix will launch separate profiles for people sharing one account this summer, giving each person customized recommendations.

In addition to making Netflix recommendations more useful for individual viewers, multiple profiles will also allow the company to take a closer look at user data. Without multiple user profiles, the mish-mash of information generated by accounts with several users amounted to “junk data,” but multiple profiles will allow Netflix to hone its recommendations and make better of it social-sharing features, which in turn will increase viewing hours and lure in new subscribers.

The company, which first unveiled its plans for personalized Netflix user profiles at CES in January, needs to keep users interested in content in order to convince them to continue their subscriptions. Multiple user profiles allows the company to not only offer more refined suggestions to individual viewers, but also allows users to broadcast better recommendations to their friends on Facebook, a feature Netflix spent a year hurdling legal blocks to get.

Article courtesy of TechCrunch

Last summer it seemed like the subscription video segment in Scandinavia was heating up, as both Netflix and HBO announced plans to make their services available in that market. Now, less than a year later, Amazon-owned LOVEFiLM is pulling out of the region, the company has confirmed.

According to local press, LOVEFiLM Sweden sent emails to users alerting them of the service’s planned shutdown there. It will cease services and shutting down its website within the next 30 days, and has asked users to return DVDs to the company.

LOVEFiLM, which started out as a sort of European Netflix, began offering DVDs by mail and eventually streaming video services in the U.K., Germany, and Scandinavia. The company was acquired by Amazon about two-and-a-half years ago, operating as a wholly owned subsidiary in those markets.

The company said it will close down operations in Denmark, Sweden, and Norway by August 11, after concluding a regulatory period of negotiation with employment unions for its employees. The company said that other Amazon services, including online retail and Kindle services, will not be affected by the LOVEFiLM shutdown.

That retreat comes in contrast to two other streaming competitors’ plans for the market: Last summer, both Netflix and HBO announced they would go after the Scandinavian market, by rolling out streaming video offerings in Norway, Denmark, and Sweden.

LOVEFiLM issued the following statement about its operations in the region:

LOVEFiLM has concluded a regulatory period of negotiation with employment unions on behalf of its employees in Sweden.

Staff at its Swedish offices – responsible for running LOVEFiLM’s Scandinavian service in Sweden, Norway and Demark – have been informed that the company will close its operations by August 11, 2013.

LOVEFiLM customers will be informed in good time of closing dates and provided with final payment details, guidance on streaming availability, and any other necessary information.

The closure of LOVEFiLM will not affect the availability of other Amazon services (e.g. online retail, Kindle Fire) to customers in Denmark, Sweden and Norway.

Article courtesy of TechCrunch

Warning: this post contains minor spoiler alerts — mainly that the penultimate episode of season 3 of Game of Thrones contains something major, worthy of a true spoiler alert. Something which you probably already know if you’ve used the internet this past week. So, if you’ve been alive.

Last week, I did something I don’t normally do — I watched the latest episode of Game of Thrones right around the time that it was actually airing on HBO. You see, I don’t have cable, so I can’t get HBO. But each week, these episodes tend to find their way to me anyway, as they spread around the internet like wildfire around Blackwater Bay. But I digress…

I managed to watch an episode of Game of Thrones in real time. And thank god I did.

With my mouth still ajar after the episode, I opened up my laptop. What I found was nearly as shocking as the ending of the “The Rains of Castamere”: every single social network had erupted with reactions to this episode in a way I had not seen before.

While this is commonplace for pretty much every television show on Twitter — yes, actual people apparently watch NCIS, not just empty rooms filled with Nielsen boxes — you rarely see this spill over to the other social networks. There will be a post here and there for big episodes of Breaking Bad or Mad Men, but it’s pretty easy to avoid friends talking about entertainment on anything other than Twitter. But again, last week was different. Not only did all the social networks feature reactions to Game of Thrones, it was pretty much all each of those networks featured.

And the result of that was amazing to behold. I saw the episode spoiled over and over and over again on each one of these networks. People couldn’t help themselves. They just had to talk about it. And they couldn’t pussyfoot around the spoiler. I repeat: thank god I had already watched the episode.

But many people had not. (Or, of course, read the books on which the show is based.)

Even the next day, when I figured anyone alive had already had the episode spoiled for them a hundred times over, I posted something spoiler-y to my blog and got a few nasty messages as a result. When I responded to one asking how on Earth they had avoided the ruination for that long, they responded that they had completely avoided all the social networks — but figured my blog was safe. Whoops.

Plenty of us know of the unspoken rule of avoiding Twitter at certain times if there’s a show or sporting event you don’t want spoiled. But again, the epidemic is now spreading far beyond Twitter. You have to basically avoid the internet entirely, lest you destroy your chances of delayed enjoyment. And your smartphone with its push notifications can turn into a not-so-silent assassin of your evening.

This reality coincides with two trends unfolding in Hollywood. On one side, content providers like Netflix are putting up whole seasons of content all at once. On the other side, networks are trying to keep alive the notion of real time, coordinated viewing.

The Netflix experiment made watching House of Cards strange. It was great being able to binge-watch. But it was weird not being able to tweet knowing that others were watching the same episode (or even the show itself) at the same time. The result was less spoilers overall, but also decidedly less of the “watercooler” effect, for a show tailor-made for such chatter. At the very least, the chatter was severely disjointed.

On the more traditional distribution side of things, networks are starting to employ smart tactics to get people watching the show when it actually airs (something they still care about greatly to ensure the commercial revenue keeps flowing in). This includes talent live-tweeting alongside episodes. And the use of hashtags to create the real time watercooler about a show is something both the networks and Twitter are undoubtedly going to dive deeper into.

But I almost wonder if the networks shouldn’t simply resort to scare tactics to get people watching shows as they air. “Watch it now, or don’t bother using the internet for the next few days.” That kind of thing.

Ultimately, I think it’s inevitable that the delayed viewing and Netflix models push the prime-time schedules towards extinction. But until that happens, those of us without cable have to be increasingly careful. Spoilers are becoming so prevalent that the old “spoiler alert” etiquette is becoming passé, almost redundant. If you happen to be on the internet tonight after 9 PM, consider your browser window (or that app you’re using) to be one giant spoiler alert for the Game of Thrones finale.

And in our Netflix future, it could actually be worse. Using the internet at any time could be navigating a minefield of spoilers, depending on when someone you follow happens to be watching a show.

TweetDeck and Tweetbot filtering capabilities are helpful, but the situation is untenable. Tumblr was almost a Red Wedding flip book last week. Same with Flipboard — complete with the flips!

I’m posting this now because I plan to stay off the internet starting at 6 PM PT (when Game of Thrones will be airing on the east coast). Lest one of my friends stabs me in the back like ******** does to ******** during the Red Wedding.

[image via Game of Thrones Tumblr]

Article courtesy of TechCrunch

“Haunting Melissa” wants to challenge the boundaries of filmmaking by putting a ghost in your (iOS) machine. Created by Neal Edelstein, producer of “The Ring” and “Mulholland Drive,” and Hooked Digital Media, the app-only horror film’s aim is to create a visceral reaction in viewers as soon as they see a push notification for a new chapter on their screen.

About a young woman plagued by mysterious noises and apparitions after her mother dies, “Haunting Melissa” delivers episodes of different lengths on a sporadic schedule. Some chapters are just a minute long, while others are 20 minutes. Viewers never know when they will get a push notification to download a new segment, mirroring the uncertainty faced by the movie’s protagonist.

As a horror movie fan, I was unsure at first if “Haunting Melissa” would be able to recreate the delightfully creeped-out feeling I get when in a darkened theater. But watching the chapters in the dark with headphones on and my face a few inches away from a small screen reminded me of reading ghost stories while sitting alone in my house late at night, a feeling Edelstein says was deliberate.

“You’re holding a window in your hand and for me, it influenced me to tell a story, but you have to change the way the story is told. You have to think about it from other perspectives. Yes, it’s linear, but it’s not a movie in an app. It’s not going to be Netflix or something of that nature,” he says. “I wasn’t trying to jam it into an app and have it digested in one story. I wanted to structure the story differently and challenge technology and challenge how people consume content.”

To keep viewers hooked on “Haunting Melissa” even though there isn’t a regular schedule, the creators developed technology to allow them to add dynamic story elements to each chapter. In other words, if viewers re-watch a chapter, they see or hear different things that add new layers to the narrative and help set the atmosphere of the ghost story.

Another challenge was how to create a mood for viewers watching the film alone on their iPad or iPhone. Edelstein and his team focused on sound, testing for iOS devices and outputting for stereo instead of 5.1 surround sound systems. ”Haunting Melissa” is like a technologically updated “The Blair Witch Project,” in that it derives much of its atmosphere from the POVs of characters filming or using video chat on their own mobile devices. Edelstein says he was inspired by the 1999 film, as well as “Lake Mungo,” another horror mockumentary. 

“We had to work to set the tone and suck people in. For me, there was the question of emotional connectivity,” says Edelstein. “When people put headphones on and sit in a dark corner, are they going to be frightened?”

Hooked Media Digital will continue to produce app-only films, providing financing for filmmakers, says Edelstein. The company is developing freemium revenue models that will allow them to avoid in-app advertising. Viewers can see chapter 2 for free if they share it on Facebook and a season pass is $6.99. While Edelstein says a horror film was the ideal format to experiment with dynamic storytelling elements, he’s looking forward to working with filmmakers in different genres to see how far the app-only format can be taken and has deals with household names in the works.

“We want to empower creative filmmakers to use these devices and this technology. We will help them with that and financing,” says Edelstein. “I think it’s an interesting time in Holly wood because not as many films are getting made, but people are looking for different opportunities. We’re perfectly positioned to take advantage of that.”

Article courtesy of TechCrunch

Google has just announced via its official Google TV blog that Redbox Instant by Verizon is arriving on the platform today. The newly launched app provides Redbox subscribers access to streaming movie and TV content, depending on their subscription package, as well as purchase and rentals from the Instant store and the ability to reserve physical discs for pick-up at the closest Redbox kiosk.

Supported Google TV devices include select LG smart TVs, the NETGEAR NeoTV Prime, the Sony Internet Player NSZ-GS7 and the Vizio Co-Star. It’s a limited pool to begin with, and eschews first-generation Google TV devices altogether, but expect it to be compatible with future hardware boasting Google TV as well.

The launch on Google TV marks the next stage in the continued expansion of Redbox Instant, the would-be Netflix competitor that first debuted in beta at the end of 2012. Redbox Instant has become available for some device-specific smart TVs, after first arriving only on mobile devices including iOS and Android-powered smartphones and tablets. Back when he first trialled the service, Ryan Lawler noted that it isn’t really a Netflix competitor, and is rather a way to get more revenue out of heavy users of its existing services, rather than something that puts streaming first. He said at the time that the real value in the service is for DVD renters who would get a bit more value out of streaming, but probably wouldn’t get many to switch.

Redbox Instant arriving on Google TV is a bit of a case of two platforms struggling to find audiences joining forces, to the delight of… well that’s the problem. Google TV, despite continued commitment and investment by Google, has not caught fire in the way some imagined it would. And Redbox Instant seems like a reactionary move designed to curtail Netflix’s success, but Netflix already appears on Google TV, and is arguably one of the main reasons to use it; it’s unclear how much this arrangement will help either party with their ongoing struggles, if at all.

Article courtesy of TechCrunch

In a major win for Amazon (at least in parents’ eyes), the company announced today that it has signed a multi-year licensing agreement with Viacom, which brings to its Prime Instant Video service the popular kids programs Netflix recently lost, after allowing its Viacom deal to expire. Amazon’s deal, a multi-year, multi-national licensing agreement includes Nickelodeon and Nick Jr. fare like Dora the Explorer, SpongeBob SquarePants, Bubble Guppies, The Backyardigans, Fairly Odd Parents, Fresh Beat Band, Team Umizoomi, Blue’s Clues, iCarly, Victorious, and more.

For older viewers, the deal also includes MTV and Comedy Central programming like Awkward, Tosh.0, Key & Peele, Teen Mom 2, and Workaholics. In total, the deal includes over 250 TV seasons and more than 3,900 episodes.

Outside the U.S., LOVEFiLM customers in the U.K. and Germany will get some of the same shows later this summer.

“Kids’ shows are one of the most watched TV genres on Prime Instant Video,” said Bill Carr, VP of Digital Video and Music for Amazon in a release. “And this expanded deal will now bring customers the largest subscription selection of Nickelodeon and Nick Jr. TV shows online, anywhere.”

The news of the agreement comes at a time when a number of upset parents stormed Netflix’s Get Satisfication consumer support site to complain about the Nick titles going missing. In fact, Amazon has already been benefitting from Netflix’s loss ahead of this new agreement – several of the shows Netflix had lost were available on Amazon, and were trending in the top 10 most popular shows list on Prime shortly after their removal from Netflix.

Netflix certainly wants to bring those programs back – but only if it can do so on its own terms. As CEO Reed Hastings has explained before, the goal is to have relationships with content owners on both side where both sides benefit. In Netflix’s case, it would rather pay highly for individual top-rated series, rather than buying bundles of shows.

In addition, though Netflix lost Viacom kids’ shows, it added other programming like  like Jake and the Never Land Pirates from Disney and Cartoon Network’s Adventure Time. But while young children are generally placated by any cartoon you put in front of them, Netflix may have under-estimated the draw that particular well-known and well-loved character brands have for children and their parents alike. (There’s a reason entire toy empires are built on top of these things.) Plus, parents know you can get Jake for free in the Disney Jr. iPad app, so it’s not as big a win.

Amazon says that some of the newly added Viacom shows will be available in Kindle Free Time Unlimited, the kid-friendly service that lets children safely explore books, games, apps, movies and TV, while parents can control access and time limits.

The company is now promoting its Viacom shows directly on the homepage of Amazon.com, which says something about the size and importance of this deal.

Its Prime Instant Vidoe service now includes over 41,000 movies and TV shows for members, which stream to video consoles, smart TVs, iOS devices, and Kindle Fire/Fire HD tablets. Unlike Netflix, which charges a monthly subscription service to access its video content, Prime Instant Video is a perk of Amazon’s larger Prime membership program, which also includes free two-day shipping, and access to the Kindle Lending Library.

Article courtesy of TechCrunch

It has only been a few days since the release of Arrested Development on Netflix, but the fourth season of the series has already exceeded the company’s expectations. In an interview at the D11 conference, CEO Reed Hastings and Chief Content Officer Ted Sarandos talked about the company’s plans for more original programming, as well as its relationship to other content providers and distributors.

Arrested Development, of course, has been popular on Netflix for years. It’s been one of the all-time top-rented DVD programs and highly viewed streaming options, thanks to a rabid — and growing — fan base over the years. It was that existing viewership that gave Netflix confidence that a new season of the show could be a hit on the service.

While it’s still early, Hastings said that the reaction to the show has been great. “We had high expectations for Arrested Development, but so far it’s exceeded them,” he said. But Arrested Development is just one part of a new programming slate that has Netflix on the road to becoming a serious player in original content.

Onward and Upward With Originals

Part of Netflix’s success in recent years has come from making the transition from “rerun TV” — showing syndicated TV shows and second-run movies — to a place where users can discover new programming they can’t see anywhere else. That move started with the launch of Netflix’s first streaming original, the mob fish-out-of-water story “Lillyhammer.”

But its original programming has been picking up steam, with the launch of Kevin Spacey-led political drama House of Cards, as well as the Eli Roth horror series Hemlock Grove. And, of course, Arrested Development.

Next up is Weeds creator’s Jenji Kohan series “Orange Is The New Black,” which is based on Piper Kerman’s memoir of spending a year in minimum-security prison. Netflix also has licensed a sci-fi series being created by the Wachowski Brothers, the guys behind the Matrix trilogy, and a kid-focused series called Turbo in conjunction with Dreamworks. In addition to those new shows, Netflix will start to stream second seasons of Lillyhammer and House of Cards as it seeks new original programming.

According to Sarandos, the company has deliberately sought out a variety of programming for streaming, seeking to appeal to a wide and varied audience. “Our subscribers have very diverse tastes, so want to touch on each of them,” Sarandos said.

It’s no coincidence as well that the shows it has picked have so far done well with international audiences. Only about 35 percent of the dialogue in Lillyhammer is in English, for instance, and it has done well in Netflix’s recently launched Nordic region. House of Cards has a U.K. pedigree, as it was originally based on a miniseries about British politics. And Hemlock Grove, while filmed in English, has done well in Latin American markets, where the horror genre is more popular on TV, Sarandos said.

Licensing the content users want

On that front, Netflix has earned more power in its ability to negotiate deals with content owners. The company’s licensing fees have become an important part of studio’s P&L sheets, and as a result, Netflix has gained a little bit of leverage in its licensing talks. But Hastings said that the goal is to continue having a good partnership with content owners, in which both sides benefit.

“I don’t think about this as a zero-sum game,” Hastings said. “We’re growing the market so that they have incremental revenue and we have incremental subscribers.”

That said, the company has become more discerning about what content it’s willing to pay for — and at what cost. At the same time that Arrested Development was coming online, Netflix was seeing some of its most popular kids content disappear. Shows from Viacom-owned cable network Nickelodeon have recently been taken off the online streaming service, after a few years of being available to subscribers.

While it’s true that Nick content — like Dora the Explorer and Spongebob Squarepants — is gone, the company has added other children’s programming, like Jake and the Never Land Pirates from Disney and Cartoon Network’s Adventure Time. The reality is that Netflix isn’t going to have everything, Sarandos said.

The ability to discern the value of content based on its popularity and the value that it provides in growing Netflix’s subscriber count has increased over time, and as a result the company is being more picky about how it spends its licensing dollars. That’s changed its relationship with some of the major content creators it works with.

When it just started out licensing content for its streaming service, the studios and networks had a tremendous amount of bundling power, Sarandos said. In a hunt for titles, Netflix ended up licensing large amounts of content. But as time has gone on, the company has decided it’s better to pay a premium for individual series that it wants to have on the service, rather than spending on a bundle of shows that had lower viewership.

Don’t Call It A Comeback

Netflix, of course, has been on a tremendous comeback, after stumbling during its plans to separate its DVD and streaming businesses. In the process, it raised the price of the combined service by about 60 percent, and it announced a new company, called Qwikster, which it eventually walked away from.

Since that initiative, Netflix has seen a gradual decline in DVD users, but that’s been more than offset by an increase in the number of domestic streaming subscribers. The company now has about 30 million subscribers in the U.S., and another 7 million in international markets.

“Streaming has grown steadily for seven years. Our membership count has grown every quarter but one,” he said. “If you look at the business, every quarter we’ve been growing, but the stock price has gone up and down, up and down.”

The stock market has also responded. After Qwikster, the stock fell precipitously — from a high of nearly $300 a share to a low of $53 last summer. And yet, it’s been on a remarkable rise since then, as Netflix’s earnings and subscriber numbers have defied expectations. After hitting a 52-week high near $250, the stock has settled in at around $225 per share.

Hastings attributed the volatility to a misunderstanding in business any time a company like Netflix does anything new. He said that the market was skeptical when it moved from DVD-by-mail to streaming, but the company has tremendous faith that’s where the overall market is going.

“Most consumers want on-demand video, and what the internet has to offer. We have confidence that in five to 10 years, it will all be Internet TV, and these apps will be on all kinds of devices,” Hastings said.

While Netflix considers itself just another network that will operate in that all-IP ecosystem, it doesn’t have any plans to be distributed in the traditional pay TV structure. It’s committed instead to marketing directly to subscribers both in the U.S. and international markets.

“We’re really focused on the straight-to-consumer market,” Hastings said. That will include expanding to new countries, as well as expanding the amount of original content that is available to its subscribers.

Article courtesy of TechCrunch