When Netflix announced a 60% price hike for streaming and by-mail subscriptions, you'd have thought the sky was falling. More than 12,000 people left comments on Netflix's blog post that explained the changes; thousands more took to social media to complain; and every major media outlet covered the negative reaction to the news. (When has a $6 price change ever sparked such outrage?)
The Way We Live Now: Sportingly. We shall not behave as animals simply because the recession is ravaging our society, shall we? As long as we have sports, we shall always have dignity. Uh. Do we still have sports?
• Is NBC shutting down Jay Leno's 10pm show and moving him back to late night? Is Conan O'Brien out of a job? NBC isn't denying that a schedule change has been discussed, but it's not saying much more than that for now. [NYT]
• ABC News is reportedly in negotiations with Ted Koppel to bring him back to the network as the anchor of This Week on Sunday mornings. [Politico]
• CNN is handing over the 1-3pm slot to Ali Velshi starting on Jan. 18. [NYT]
• Forbes has sold off its landmark building on lower Fifth Ave. to NYU. [NYO]
• Despite the standoff between Cablevision and Scripps, ratings for the company's two cable outlets, HGTV and Food Network, are up. [AdAge]
• Tucker Carlson's new website, The Daily Caller, launches next week. [WI]
• Avatar's streak continues: It's now the No. 2 biggest movie ever. [THR]
• A Blockbuster video kiosk is coming to a Duane Reade near you. [NYCTB]
• Fox is delaying the start of its sketchy new reality show. [THR]
• Break out a tissue: The Hof is leaving America's Got Talent. [People]
• Lady Gaga was the special guest on Launch My Line last night. [Gawker]
• Did ABC News buy George Stephanopoulos a booster seat when he joined the Good Morning America team? That's the rumor, at least. [Popeater]
A tipster reports that Blockbuster is blast-emailing former customers to Total Access, its DVDs-by-mail Netflix knockoff. The offer: $25 if customers sign up again using PayPal. Odd, since Blockbuster CEO Jim Keyes recently bragged about how the company was cutting off online advertising for its money-losing rent-by-mail business in favor of promoting its stores. Has he not talked to his marketing department recently?
Blockbuster has abandoned advertising TotalAccess, its also-ran DVD-by-mail competitor to Netflix. CEO Jim Keyes would like you to think his company's still a contender, though, and PaidContent's Rafat Ali is happy to oblige in a softball interview. Ali's far-from-knockout closer: "This is a hypothetical one. Would you be ever interested in buying Netflix?" We won't bother giving you Keyes's pat response about how he doesn't need Netflix. Instead, we'll just point you to PaidContent's handy financial summary included in the post. Blockbuster is worth $312 million. At $1.93 billion, Netflix is worth six times as much as Keyes's company.
Thirty-two Facebook users signed onto a class-action suit against Facebook and several of its Beacon partners, including Blockbuster, Fandango and Overstock, Hotwire, STA Travel, Zappos.com and Gamefly. Facebook Beacon was the service that reported to a Facebook user's friends that user's activity on partnered sites elsewhere on the Internet. The suit alleges that between November 7, 2007 and December 5, 2007, Facebook did all this without asking first. Technically Facebook did ask, with little pop-up dialogue boxes on partner sites, but apparently they were hard to spot. Still, Beacon did spoil the surprise of a fair number of Christmas gifts, which, as we understand the tradition, are supposed to remain a secret until opened.The users want Facebook and its partners to delete all stored information, the return of any "ill-gotten gains" — of which we understand there to be none — and for the court to "award restitution." If the plaintiffs win the case it'll at least be interesting to see how much our justice system values a good Christmas surprise in monetary terms. Meanwhile, the technology behind Facebook Beacon is back, but now its called Facebook Connect and now its entirely opt-in.
The video-rental store is doomed, and even Blockbuster has figured that much out. That's why CEO Jim Keyes is trying to buy Circuit City for more than $1 billion? Blockbuster has become the RadioShack of its time, saddled with too many stores which are too small, selling the wrong thing. It jumped on the business of selling DVDs, instead of renting them, right as disc sales peaked and started to drop. Now, it hopes to sell, via Circuit City's larger outlets, subscriptions to its online video services alongside the devices used to play them. The vision is inspired by Apple, which sells iPods, Apple TV set-tops, and music and video through iTunes. Apple's iTunes movie rentals are a direct threat to Blockbuster's remaining rental business, and Apple is rumored, too, to be getting into the business of music subscriptions. One small problem: It's not clear how Circuit City helps Blockbuster.
When not bawdlerizing movies or trying, and failing, to kill Netflix, Blockbuster has been busy planning to develop and ship a set-top box that will allow customers to download movies at home. The company purchased online movie download service Movielink for $6.6 million last August. But it still hasn't integrated Movielink into Blockbuster.com after seven months. The chances they can come out with an inexpensive, easy-to-use hardware device in the foreseeable future seems slim — look for the company to partner with or acquire an existing manufacturer, such as struggling startup Vudu. (Photo by AP/Ron Heflin)
Stock traders weren't blown away by Steve Jobs's Macworld announcements, sending Apple shares down 5 percent. Rivals faired even worse, however. From the numbers, they expect Apple's movie-rental service with support from all of the major studios to pummel brick-and-mortar competitor Blockbuster, and to a lesser extent Netflix. Blockbuster is trading down more than 15 percent in after hours while Netflix is down 3 percent.
Viacom is determined not to fall into the music industry's technophobic trap. Instead, it's embracing the online-video frenzy by releasing Jackass 2.5 directly onto the Web next week. Initially offered as a free streamed video on Blockbuster's Movielink, it will eventually move to pay outlets like iTunes and, yes, DVD — which is where this on-the-cheap knockoff probably would have landed just a couple years ago.
DVD rent-by-mail operation Netflix may be kicking rival Blockbuster where it hurts, but all is not well with the company. According to the U.S. Postal Service, the ubiquitous red return envelopes used by Netflix, hailed for saving the company millions of dollars, are prone to jamming mail sorting machines. The USPS estimates the cost at $21 million per year. To recoup that amount, the postmen propose a 17-cent surcharge per mailer. Such a charge would cost Netflix two-thirds of its operating income and lower its monthly profit per subscriber from $1.05 to $0.35. Netflix is likely to redesign its return mailer, yet again, to mitigate the burden. A company so vulnerable to the price of postage must be thinking that video downloads are looking better and better.
Through-the-mail movie rental outfit Netflix has been very aggressive in fighting Blockbuster's competitive advances — and winning. Analytics firm Compete has a rundown of Netflix vs. Blockbuster and lists Netflix.com as having four times the visitors Blockbuster.com does. Also, Netflix's download strategy seems to be having some success with 450,000 "Watch Instantly" users in November. Blockbuster is still attempting to roll out a download service it gained from its purchase of movie download site Movielink. Good luck to both of them. Apple is rumored to be introducting movie rentals to iTunes. Will they be battle-tested veterans by the time Steve Jobs shows up — or so bloodied from fighting each other they'll fall victim to his shiny white-plastic machine?
Here's what no one's saying about Blockbuster's acquisition of Movielink, the Hollywood-backed movie-download site: It's a desperate move to shore up Blockbuster's online failures. Blockbuster, remember, has been promising video downloads for most of this decade. First came a deal with Enron's broadband division, and, well, we all know what happened there. Since then, Blockbuster has said that video downloads would be coming soon for years. But Hollywood studios, burned by past negotiations with Blockbuster for sharing video rental fees, are understandably loath to cut favorable online deals with the video-rental chain. And it's hard for Blockbuster to compete technologically with the likes of Apple, Amazon.com, and Netflix. Buying Movielink gets Blockbuster deals with studios and ready-made tech — all of which gives it merely a place at the online-video table, not the ability to eat everyone else's lunch.
Microsoft is looking to put Blockbuster out of business. How? Having added 100 gigabytes of storage to the Xbox videogame console, enough to store dozens of high-definition movies, it's now undercutting Blockbuster's rental fees for download-to-rent movies. Microsoft's rental charge — about two bucks — is low enough that some think it will hurt DVD sales, too. [MonstersandCritics.com]
Remember, fondly, the time when companies were moderately coy about viral marketing? When there was at least a small degree of modest subtlety involved in deceiving consumers? Those days are long gone, as demonstrated by this Monster ad by Blockbuster for a "Blog/Viral Mkt Manager." The ideal candidate shall:
