Great profile of Reed Hastings by Ashlee Vance for Bloomberg Businessweek. Three standouts:
The master copies of all the shows and movies available to Netflix take up 3.14 petabytes of storage space. (In comparison, Facebook uses about 1.5 petabytes to store about 10 billion photos.) Hollywood studios used to send individual films and shows to Netflix on a disc or thumb drive; now they use a Netflix system called Backlot to send encrypted files via the Internet. Netflix then compresses the files and creates more than 100 different versions, each tuned for the varying bandwidth, device, and language needs of its customers. (An hour of video for the iPhone would be about 150 megabytes.) This compressed catalog comes to about 2.75 petabytes.
Wow — also, Pi.
Netflix began to experiment with cloud services from Amazon and Microsoft, where Hastings served as a board member. In 2009 he bet his company’s future on Amazon. Up to that point, nothing the size of Netflix had placed so much of its crucial technology on Amazon’s systems. Hastings sent an e-mail to Amazon CEO Jeff Bezos, announcing his plans. “I asked him if he was comfortable with that idea,” Hastings says. “If not, there was no point going forward.” Bezos gave the go-ahead.
That seems like a pretty large diss of a company where he’s a board member — especially when you consider that Amazon is now a very direct rival.
And finally, the best for last:
Qwikster was a fiasco, but far less threatening than a debacle that preceded it. In August 2008, Netflix’s technology infrastructure melted down. This was when the company was still known for DVDs-by-mail, and for three days it could not send discs because a crucial Oracle database kept malfunctioning. Reporters and customers took notice. Netflix traced the problem to an expensive, third-party storage system that went haywire after a software update. The incident still annoys Hastings. When the subject comes up in the watchtower, Chief Product Officer Neil Hunt, who’s also gathered at the table, suggests they not mention the storage-system vendor by name. Hastings responds, “Let IBM have it, baby.” (An IBM spokesman declined to comment.)
Said another way.
Andrew Wallenstein for Variety:
Netflix reported 29.17 million domestic subscribers in the first quarter of 2013, surpassing HBO for the first time.
You see that fire? That’s all of our collective money burning holes in our pockets just waiting for HBO to unleash Go without a goddamn cable subscription.
Peter Kafka for AllThingsD:
Good news for Netflix! The company streamed more than 4 billion hours of video in the first three months of the year, according to a Facebook post from CEO Reed Hastings.
BTIG analyst Rich Greenfield crunches those numbers (registration required), and concludes that this makes Netflix the equivalent of the most-watched cable TV network: He figures there are 28 million U.S. Netflix subscribers watching an average of 87 minutes of Netflix per day, or 43 hours per month. That puts it on par with the Disney Channel.
The future continues to reveal itself.
Willa Paskin of Wired dives into the business behind the resurrection of Arrested Development on Netflix:
Whatever our televisual drug of choice—Battlestar Galactica, The Wire, Homeland—we’ve all put off errands and bedtime to watch just one more, a thrilling, draining, dream-influencing immersion experience that has become the standard way to consume certain TV programs. We’ve all had the hit of pleasure after an installment ends on some particularly insane cliff-hanger and we remember that we can watch the next episode right now. It’s a relatively recent addition to the pantheon of slightly illicit yet mostly harmless adult pleasures, residing next to eating ice cream for dinner, drinking a beer with lunch, and having sex with someone you probably shouldn’t.
Yep. Also interesting:
Yet traditional television networks still apportion their series in weekly episodes over four to eight months, allowing binge-watching only in retrospect, even though, for an increasing number of viewers, binge-watching isn’t just a way to catch up on a season that has already wrapped but a better viewing experience altogether. Why let networks and advertisers get in the way of that? Which may explain what Sarandos says, that the audience for Breaking Bad is bigger on Netflix than it is on AMC. (One of the few hard numbers Netflix has shared is that 50,000 of its subscribers watched all 13 episodes of Breaking Bad’s season four the day before the new season premiered on AMC.)
The audience for Breaking Bad is bigger on Netflix than it is on AMC. Think about that for a second.
Anthony Ha for TechCrunch:
Yet when I watched House of Cards, I really enjoyed the space between the episodes, when I could wonder about what happens next and anticipate the next time I’d have an hour or two to catch up. That’s not a new idea — in fact, it’s one of the main pleasures of television. But I think it’s something people lose sight of when they talk about bold new distribution models.
I agree, this topic is being lost in the larger debate. I believe I prefer the House of Cards model for the same reason I’ve long preferred watching shows on DVD rather than when they air — I like to binge.
But I do miss some of the “watercooler” effect of everyone talking about what just happened on Lost this week — something which the very existence of Twitter has essentially perfected. There’s still definitely a watercooler effect with House of Cards but it’s more about the show in general rather than specific plot points since we’re all likely at different parts of the show right now (unless we’re doing with season 1 already, of course).
Andrew Wallenstein of Variety reports on a panel featuring CAA TV literary agent Peter Micelli, who spoke about Netflix:
“The cheapest show is $3.8 million an episode,” Micelli told a crowd of more than 500 lawyers in the entertainment business. “‘House of Cards’ started at $4.5 million and (executive producer David) Fincher took it way above that.”
It ain’t cheap, but with Microsoft, Amazon, Redbox, Verizon, and others now getting into this game, there’s little question in my mind that this will be the future of television.
David Carr for NYT:
Netflix, which has 27 million subscribers in the nation and 33 million worldwide, ran the numbers. It already knew that a healthy share had streamed the work of Mr. Fincher, the director of “The Social Network,” from beginning to end. And films featuring Mr. Spacey had always done well, as had the British version of “House of Cards.” With those three circles of interest, Netflix was able to find a Venn diagram intersection that suggested that buying the series would be a very good bet on original programming.
Doesn’t this just reek of Firefly also making a comeback? I alluded to all of this a couple of years ago. And now it’s playing out…
Rebecca Greenfield for The Atlantic Wire looks at the economics of Netflix doing shows like House of Cards (which I haven’t started watching yet, but have heard some pretty good things).
Austin Carr for Fast Company looks back at the project that started as “The Netflix Player” but was eventually spun out into the Roku box/company:
It was December 2007, and the device was just weeks away from launching. Yet after all the years and resources and talent invested in the project (a team of roughly 20 had been working on it around the clock, from ironing out the industrial design and user interface to taking trips to Foxconn to finalize production details), Netflix CEO Reed Hastings was having serious second thoughts. The problem? Hastings realized that if Netflix shipped its own hardware, it would complicate potential partnerships with other hardware makers. “Reed said to me one day, ‘I want to be able to call Steve Jobs and talk to him about putting Netflix on Apple TV,’” recalls one high-level source. “‘But if I’m making my own hardware, Steve’s not going to take my call.’”
In hindsight, good call.
But ultimately, Wood says, “It was totally the right decision. Licensing [digital content] has been hugely successful for Netflix. [The Netflix Player] would’ve created tension with partners, and increasingly decisions would come up where Netflix would have to decide, ‘Should we make decisions based on what’s best for licensing, or what’s best for our own hardware?’”
Sounds eerily similar to the dilemmas that both Google (with Motorola) and Microsoft (with Surface) now face, no?
Ted Sarandos, Netflix’s chief content officer, speaking to GQ for a profile of Netflix chief Reed Hastings.
This will go down as the year that HBO either made the right choice or the wrong choice not to go after the stand-alone Netflix model. Netflix is coming out swinging with House of Cards and then Arrested Development. HBO continues to hide behind big cable.
Netflix at first paid for 5 million customers and they got 25 million. But now people are saying, ‘OK, you’re going to get 30 million customers, so you’re going to pay for 30.’ If Netflix can get 40 or 50 million, they’ll be fine. But if they don’t get to 30, they’re probably going to go pfft.
Dish Network head Charlie Ergen predicting the future for Netflix.
Keep in mind this is the guy who bought Blockbuster and spends the entire interview with Bloomberg trying to rationalize the move, suggesting that what was clearly a mistake was not a mistake — just a waste of time, and money. Right.