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Little Movie ‘Mojo’ at Netflix Streaming

24 Jan, 2011 By: Erik Gruenwedel



Netflix’s aggressive transition to all things streaming is literally ignoring the box office, according to a research report.

Of the top 100 theatrical releases in 2010, just nine movies are currently available for streaming to Netflix subscribers. Indeed, if you are looking to stream any of the top 50 titles from last year, your choices would be limited to: Alice in Wonderland (No. 2, Disney), Shutter Island (No. 19, Paramount), Dear John (No. 40, Sony Pictures) and The Bounty Hunter (No. 46, Sony Pictures), according to Tristan Louis, a technology consultant who compiled the data.

With nearly 20 million subscribers, Netflix has made no secret it believes the streaming future hinges upon TV programming rather than feature films. The company says nearly 60% of its subs stream at least 15 minutes of content monthly, which would appear to favor shorter episodic TV shows.

That said, studios are reluctant to make available new release movies to an "all-you-can-eat" streaming service such as Netflix due to the near non-existant margin for individual streams compared to transactional VOD, sellthrough or discs. It is because of this that Netflix's content acquisition costs going forward are expected to increase exponentially.

By comparison, Louis found that 74 of the top 100 movies are available for rent on disc (DVD or Blu-ray), 48 titles are available for transactional video-on-demand on Amazon VOD, and 46 are available on iTunes or Vudu.

Louis found that none of the VOD play¬ers appeared to have an advan¬tage over the other, with 45–50% offering top 2010 movies. Indeed, about 75% of the movies were avail¬able on DVD, giv¬ing discs a 33% advan¬tage over VOD.

Interestingly, Alice in Wonderland is only available on iTunes and Vudu for electronic sellthrough (EST), which also applies to Clash of the Titans (No. 12, Warner) at Amazon VOD. Shutter Island, Resident Evil: Afterlife (No. 54, Sony Pictures), Death at a Funeral (No. 73, Sony Pictures), Legion (No. 76, Sony Pictures), Daybreakers (No. 94, Lionsgate) and Dear John are for sale only at Amazon, iTunes and Vudu. The Social Network (No. 30, Sony Pictures), Hot Tub Time Machine (No. 65, MGM) and The Last Song (No. 51, Disney), Kick-Ass (No. 66, Lionsgate) and When in Rome (No. 88, Disney) are for sale only at iTunes and Vudu; Brooklyn’s Finest (No. 98, Anchor Bay) is only for sale at Amazon VOD.

Analyst Eric Wold with Merriman Curhan Ford in New York said he expects Netflix management to focus on streaming and related content acquisition costs at the expense of discs during the forthcoming Jan. 26 financial call.

“We continue to expect management to acquire additional streaming content in 2011 to increase the value proposition for subscribers,” Wold wrote in a note. “Not only do we believe the de-emphasis on DVDs will increase margins – providing additional funds for content – but we estimate the recent price increase could drive an incremental $250 million in revenue/profit this year.”

Wold believes Netflix added 2.64 million subs in the fourth quarter.


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