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Posts Tagged ‘Netflix

Netflix, Inc., the world’s largest online movie rental service, announces an agreement with Disney-ABC Television Group that will make several of ABC’s most popular TV series available to be streamed instantly from Netflix.

In its entirety, the deal will allow Netflix members to instantly watch the first five seasons of the hit ABC franchise “Lost,” seasons four and five of the pop culture phenomenon “Desperate Housewives,” season five of the critically acclaimed “Grey’s Anatomy,” and seasons one and two of the syndicated epic action-adventure fantasy series “Legend of the Seeker” from ABC Studios. Many of the episodes, including the first four seasons of “Lost,” will be available from Netflix beginning August 1. The remainder will be available in subsequent months, beginning in September.
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By: Julia Boorstin, CNBC

hollwood dvd

DVD sales used to be the bread and butter of the movie studios business, even more important to the bottom line than box office receipts. But thanks to shifting consumer patterns and the recession, home video sales are stuck in the kind of decline that’s making studio chiefs think about reinventing the business model.

Now some new data reveals just how bad the home video business is: DVD sales fell 13.5 percent in the first half of the year according to Digital Entertainment Group.

It’s not that piracy has replaced DVD sales — broadband capacity is still too limited for that — but people are opting to rent rather than buy.

Here’s the good news:

Movie rental revenue grew 8 percent in the first two quarters, which helps Netflix , Blockbuster and Redbox.

This makes sense: Americans are consuming more entertainment, staying home and avoiding shopping and travel, but they don’t feel compelled to add more DVDs to their library.

Blu-Ray sales rose 91 percent in the first two quarters, but that business is still very niche, just $408 million. Unlike the transition from VHS to Blu-Ray, we’re not going to see the same kind of purchasing.

Why not?

The answer is that DVDs don’t seem outdated, and there are plenty of digital distribution options, both legal and illegal.

On-demand movies, through cable or satellite video-on-demand or online streaming, grew 22 to $968 million.

Redbox1With more subscribers choosing DVD-by-mail service, Netflix Inc. is one of the few companies to prosper during the worst U.S. recession in 70 years. However, Netflix CEO Reed Hastings still has something to worry about: an even cheaper DVD rental service run by one of his former lieutenants.

Redbox has emerged as the largest operator of DVD-rental kiosks, with more than 15,400 vending machines set up to dispense $1-per-day discs in supermarkets and discount stores.

I remember when I first saw a Redbox machine outside of a McDonald’s. I thought, “boy, these guys will put anything, anywhere just to get a quick buck.” This is exactly what Redbox had in mind.

According to AP reports
, Redbox opens an average of one kiosk per hour to lure budget-conscious consumers, Hastings is concerned that this upstart might upstage Netflix, whose cheapest mail-order plan costs $5 for two movie rentals in a month.
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