Saturday, April 23, 2011

Netflix & the Death of Blu-Ray - Rise of the Machines meets Chicken Run


Afraid? Of whom am I afraid?
Not Death, for who is He?
The porter at my father lodge
As much abasheth me.

Emily Dickinson, Time and Eternity

It seems that may be the secret sing–song among the members of RIAA (Recording Industry Artiste Association) and the MPAA (Motion Picture Artiste Association), who still express strong faith in DVD Discs and the upcoming Blu-Ray Discs Technology.

78% of people still watch movies on DVD Discs based on the statistics by NPD. Blu –Ray Discs are just beginning to catch on to Blu-Ray Discs based on the statistics of Strategy Analytics Researcher Peter King, now three (3) plus years since Toshiba’s HD DVD Discs lost the Format Wars as stated in the article “Blu-Ray Discs's New Format: The Old School DVD Discs”, published Wednesday, April 20, 2011 at 6:40 pm By Ed Oswald, The Technologizer.

These sentiments are expressed at a time when evidence is emerging that suggests that interest in watching DVD Discs and the upcoming Blu-Ray Discs is waning, based on search engine requests as stated in the article “More Proof DVD Discs' are a Dying medium”, published April 22nd, 2011 3:05 PM By Ed Oswald, PCWorld.

According to the BTIG analyst Richard Greenfield in a recently published research note, more people are opting to stream movies via the various IPTV devices from Streaming services such as Vudu and Netflix.

In effect, he is suggesting that people are more comfortable with renting a movie than owning, a finding, if the researcher’s statistics bears truth, would mean that Netflix change of tactic from renting DVD Discs to IPTV Streaming was merely a change of delivery format.

Hence their expressed confidence in November 2010 when Netflix predicted the demise of DVD Discs as stated in the article “Netflix expects video Streaming to drown out DVD Discs'”, published Wednesday, November 24, 2010, The Jamaica Observer.

Alas, this is but a research note and a company expressing confidence in a phenomenon that is much chronicled but for which evidence is difficult to gather.

This as the phenomenon of people Streaming content as opposed to watching it as-broadcast (on Cable TV or Free-to-Air Television) or on stored media format such as DVD Discs and Blu-Ray Discs called Cord-Cutting is anything but a myth.

People choose to watch streamed content does not mean that they have cut the cord. If anything, they are choosing increasing to get their content more conveniently, opting to stream programming on their smartphones or their browser.

They, may however, opt not to watch as-broadcast TV but instead record programs on the DVR (Digital Video Recorders) as I used to do while I worked at Telecom Provider CLARO (2008 to 2009) and evidenced in the article entitled “Survey of viewers shows extent of TV time shifting”, published Tuesday August 17 2010, 6:53 am ET By DAVID BAUDER, AP Television Writer, Yahoo News.

Most people on reaching home, unless they are dedicated TV people, will fall asleep on breaching the doorway, hence the prevalence of DVR’s. Even Local Broadcaster Television Jamaica realizes this, thus offering archived content on their website for later viewing.

Hulu too, had been created on this premise!

Please note that the above phenomenon of “Cord Cutting” is peculiar to the United States of America! We do not have cheap affordable Broadband as yet or computers and smartphone, Netbooks and Laptops at lower prices to match the Working Class Pocket as evidence in the statistics laid out in my Geezam blog entitled “Jamaica's Low Net Penetration - Broadband Internet A Universal Right”.

The rest of us normal folk living in the Developed World still watch TV via DTT (Digital Terrestrial Television), Analog-Free-To-Air, Cable TV, mostly Triple Play Providers, such as FLOW and DVD Discs, which are cheap to copy, as there is a thriving illegal DVD Discs copying market in Jamaica that authorities are as yet to clamp down on.

Plus, Jamaicans are pragmatic: a CD/DVD Disc costs JA$50 retail and the illegally copied movies, which I used to purchase in Bargain Village May Pen, Clarendon cost only JA$100 to JA$200, depending on who you purchase them from on the road.

Blu-Ray Discs would also suffer the same fate, once Blu-Ray Discs Burners and Blu-Ray Discs Disc become available, which is allowed under the DMCA (Digital Millennium Copyright Act), allowing owners of their content, whether legal or illegal, to make backup copies or accept legitimate copies in the event their original media is damaged and rendered unreliable.

Why pay for Wireless Broadband Internet at prices as high as JA$3500 per month on Digicel Broadband via their WiMax 4G Mobile (IEEE 802.16d, e) Platform, a device which you cannot modify, and then pay for Streaming?

Ditto this sentiment for LIME ADSL (Asynchronous Digital Subscriber Line), as current Wired and Wireless Broadband prices in a Recession Battered Economy are just too high for any Jamaica to consider hooking up their TV to stream all their content online via these IPTV Streaming Services.

This is what is effectively killing Barbadian entrant to the IPTV market Net2Vu, as to pay for Internet and then for Streaming media is a double whammie very few but the Young and the Restless can afford.

Even previous articles I have written on the subject, such as my blog article entitled “FLOW, IPTV and the coming of Net2Vu - Johnny Mnemonic” suggest that people are ditching cable services here in Jamaica on Triple Play Provider FLOW are but mere speculation, as no solid evidence is emerging. Just “Anal”- yst’s Statistics.

In fact, the premise of the phenomenon of Cord-Cutting on Triple Play Provider FLOW was based on statements by President and CEO (Chief Executive Officer) Michelle “Dallas” English in an interview with Mark Titus, Business Gleaner Writer in which she made a passing reference to “Video products” as stated in the article “Flow Ja needs five more years to complete triple-play network”, published Sunday March 20, 2011, Mark Titus, Business Gleaner Writer, The Jamaica Gleaner.

Could be a rise in Broadband Internet usage as people ditch Cable TV and Triple Play Providers opting to Stream as would easily evidence by the traffic on their Network?

Or it could have been a reference to their new HDTV channels, which are no longer offered as separate bundles and can be ordered individually as stated in the article “More HD channels form FLOW”, published Sunday, April 10, 2011, The Jamaica Observer.

The above stated pragmatic question by Jamaica ringing in our heads, as many turn their noses as a desperate Telecom Provider Digicel has Customer Care Agents a walking around May Pen, Clarendon about trying to entice people to purchase their locked and un-modifiable WiMaX 4G Modem (IEEE 802.16d, e) modems, is one of the reasons behind the low Internet Penetration and computer usage in Jamaica.


The image of Technology and Gadget being playtoys of the privileged and wealthy in Society based on the people discussing Technology and Gadgetry is another nail in its coffin, making Technology appear to be expensive and out of the reach of regular citizens as stated in my blog article entitled “Senator Daryl Vaz and the WEO NRI - Bragging Rights and Broadband Rights Required”.

It may create desire, but thus Technology usage to create Wealth loses its appeal, becoming as mere “bling”!

Cable TV and Triple Play Providers may be bleeding customers as stated in the article “US Cable TV bleeds subscribers as online grows”, published Sunday November 28 2010 by AFP, Yahoo News.

More recent evidence points to declining growth since the Fourth Quarter of 2009 of Cable TV and Triple Play Providers and the rise of IPTV Streaming services such as Netflix as posited in the statistics of Stiefel Nicolaus analyst Christopher King in the article “Cord cutting Threat ain't Over Yet”, published March 14, 2011, 12:19pm PT By Ryan Lawler, GigaOM.

This as with 84% of the US market in Cable TV and Triple Play Provider’s hands, growth is constrained, so any new IPTV offering that coincides with decreasing prices of Wired or Wireless Broadband in the USA, which was around the Fourth Quarter of 2009, would logically spell doom for the Cable TV and Triple Play Providers.

For those with short memories, this coincides with Telecom Provider AT&T capping their Unlimited Data Plans in the Second Quarter of 2010 due to excessive usage on their 3G Networks by Apple iPhones, who consisted of only 4% of the Subscriber base as stated in my blog article entitled ‘AT&T and Capped Data Plans - Skype is no Longer Free”.

The First Quarter of 2010 showed signs of plans beginning to emerging for the push towards LTE as stated in my blog article entitled “The 4G Revolution and the Summer of 2010”. It was around this time after the Fourth Quarter of 2009 that Cable TV and Triple Play Provider began to under-perform.

The statements on the faltering of Cable TV and Triple Play Providers by Stiefel Nicolaus analyst Christopher King puts it best, quote: “Cable operators have been quick to point to housing and the anniversary of the nationwide digital transition in 2009 as reasons for recent subscriber declines; however, our analysis suggests that growth in the pay T.V. market has underperformed household formation in recent quarters and the impact of the 2009 digital transition should no longer be an issue.”

Hence the corresponding rise in Netflix thirty (30) Day subscriptions in Fourth Quarter of 2009 by two million four hundred thousand million (2,400,000) paying subscribers in the Fourth Quarter of 2009.

Netflix thus went on, driven by dropping Broadband prices, to add another six million, four hundred thousand (6,400,000) subscribers by the close of 2010. Netflix capping off a total subscriber base of eighteen million three hundred thousand (18,300,000) subscribers making them the 3rd largest Pay TV service trailing Triple Play Provider Comcast and Satellite TV Provider DirecTV.

A similar threat, however, does not yet exist for Blu-Ray Discs or DVD Discs, as their lower cost, the idea of owning the content with a Disc and being able to watch whatever, whenever independent of a Cloud that can fail as demonstrated by the recent Amazon Data Server failure as stated in the article “Amazon failure takes down sites across the Internet”, published Friday April 22, 2011 9:26 am ET By PETER SVENSSON, AP Technology Writer, Yahoo News are strong factors for Blu-Ray.

Plus, streaming Media is yet to be able to achieve the 1080p HD quality of Blu-Ray or even render 3D movies without significant increases in Broadband speed. Say 1GB speeds or even 1TB speeds as stated in my blog article entitled “Verizon, NEC and the Dawn of the Terabit Age - Audia's FlashDance and Surf's Up”.

Combine these with the above pragmatic question by Jamaicans mentioned earlier and they become strong factors that auger for the persistence or physical stored Media such as DVD Discs, Blu-Ray Discs and Hard-Drives, especially SSD (Solid State Drives) in the USA.

This is even if the entire country were to be covered by low-cost affordable Wired and Wireless Broadband, possibly seeing a revival if the unreliability of Wired and Wireless Broadband and Cloud Storage persists.

People may even see the Cloud as a precursor to the eyes of Big Brother or even Skynet Terminator 3: Rise of the Machines (2003) Style, as they play their illegal Blu-Ray Discs and thus may seek to escape the watchful gaze of Big Brother, Chicken Run (2000) Style.

Ditto too for Jamaica!
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