www.vjcollection.com

While Roku’s Netflix device offers easy access to movies and does away with the long download delays, it still doesn’t offer the best-looking picture.

And look at the growing competition that’s swarming into the sector. Apple, Amazon, Microsoft’s
Xbox, cable companies, and Hulu are all out to use digital distribution to offer consumers instant gratification.

I’d be willing to pay a premium for that.

Reader, I don’t know about you but I’ll choose instant gratification over waiting for the postman every time. I’m a film buff. Why should I be forced to decide what I want to watch in advance? Let me push a button and choose whatever movie I want.

So why go back to charging users for each video they rent? They obviously are attracted to the all-you-can-eat model.

The Internet and movie rentals are supposed to be your turf.

Pachter disagrees with me. While he said he wouldn’t be surprised to see Netflix experiment with streaming new releases, he likes the current hybrid approach: offering catalog titles for Internet streaming and mailing new releases in the form of physical DVDs.

Netflix customers will gradually move to the Web

The Web hasn’t taken over yet. There’s plenty of time to boost the quality of Netflix’s streaming library and consumers may not fully embrace Internet video until it’s as good as watching a DVD.

“Why would anyone feel alienated by this?” said Michael Pachter, a financial analyst with Wedbush Morgan Securities. “You can’t get a better deal elsewhere. Netflix would be essentially giving you Apple TV without charging you for the Apple box.”

CEO Reed Hastings and his management team have hit a home run–or at least a solid run-scoring triple–by partnering with Roku, the company behind the Netflix Player. The $100 device enables customers to stream movies from the Web to their TVs. Most reviewers have applauded the device for its low cost, easy setup, and viewing quality (a good Internet connection means no stalling or long download delays).

But a month after the Netflix Player went on sale, I haven’t read a single review that hasn’t deducted points for the lack of films available with Netflix’s streaming service. It’s the biggest complaint from device owners I’ve spoken with.

Take a look at this excellent story from the Los Angeles Times. Executives at some of the major studios, who used to believe that the Web and VOD services could hurt DVD sales, are experimenting with limiting the time an outlet has exclusive access to films. Others studios are testing whether it pays to make Web and VOD rentals available when DVDs go on sale.

Here’s why they may have gone this way.

Mr. Hastings, you’ve done a good job by setting up your “Watch Now” streaming service with 10,000 catalog titles, but you need to go further. Let customers purchase new releases on a per-video basis if they want. Some might resent being asked to pay in addition to their monthly subscriber fees, but if you explain that Hollywood charges more for new releases, your customers will understand. Give us choice.

And remember that advantage Netflix enjoys by being able to mail DVDs a month before Internet or VOD distributors? It’s possible that might vanish soon.

But discs are not the future. And I’m not the only one who thinks this way. Hastings predicted last month that DVD rentals will peak within the next 5 to 10 years, yet Netflix is leaving the Internet delivery of new releases to Apple and other competitors.

“What Netflix is saying to customers is ‘We’re going to give you new movies on a disc and we’re going to give you as much catalog and streaming as we can possibly deliver to you for (the same monthly subscription),’” Pachtel said. “That’s a smart business model.”

Since then, Netflix has steadily grown and snatched market share. In the quarter ended March 31, Netflix saw net profits jump 36 percent to $13.4 million, or 21 cents a share. The number of subscribers grew 21 percent to 8.24 million.

Netflix doesn’t serve a la carte

Subscription fees have helped make Netflix the No. 1 online video rental service. Founded in 1997, the company started out charging customers on a per-video basis and switched to subscriptions two years later. Not long after that, Netflix began offering unlimited rentals for a flat fee.

news analysis Netflix, don’t take half steps with your digital-delivery service. Give your users what they want, and what they want is the latest hit movies.

So come on, Netflix. Spend big, move fast. Get your customers thinking of you when it comes to instant gratification. Gather expertise on streaming technology and pricing before your competitors.

Netflix buys physical DVDs as soon as they go on sale and, by law, Hollywood is powerless to dictate what the company does with its property. This means that by the time iTunes or VOD services are allowed to start renting movies, Netflix has been shipping those little red packages for a full month.

Early indications are that Web sales don’t eat into DVD sales.

The studios have a distribution structure whereby they cut deals to provide exclusive access to films for specific periods known as “windows.” Theatrical releases typically come first, followed by home-video release, then pay-per-view channels, then regular cable, etc. This is why Apple and VOD services must wait 30 days before distributing rentals.

Netflix executives said during the company’s investor day last month that most of the movies it rents are catalog titles.

(Credit:
CNET Networks)

It’s important to note that Netflix’s traditional mail-order business isn’t affected by the same 30-day restriction. This is one of Netflix’s biggest advantages over anyone delivering movies over the Web or on VOD.

But by ignoring the digital distribution of new releases, the company is leaving the door open to competitors.

But improvements in download and streaming technology are coming rapidly. The Roku device is perhaps the best example of this. Adoption of Internet movie rentals could occur faster than anyone realizes.

This means Hollywood could conceivably break down the walls and give VOD and Web-movie distributors access to films as soon as Netflix gets them.

The Netflix Player by Roku

This is an important comparison because Apple has already begun offering new releases for rent via iTunes. Trust me on this Netflix, you don’t want to fall behind to Apple. And let me be clear. Hollywood hasn’t barred Netflix from obtaining the latest releases. Netflix managers have acknowledged that they could have received the same deal as Apple. They chose not to, and I think that’s a mistake.

In January, Apple cut a deal with the movie industry that allows iTunes to rent new releases 30 days after the flicks become available for sale on DVD. It would be nice to get them sooner, sure, but Apple is providing an option that Netflix is not.

(Credit:
eCost)

I know memory cards are boring, but it just blows me away to see 8GB SD media selling for $29 when a few years ago you’d have paid hundreds for a card with half the capacity.

This is a Transcend Secure Digital High Capacity (SDHC) card, meaning it should be compatible with all devices (smartphones, digital cameras, etc.) that meet the SD 2.0 standard. It includes a lifetime warranty, and best of all: no rebate. Alas, you’ll pay about $9 for ground shipping, which is ridiculous given the size and weight of the product. But even at $38, this is still a pretty sweet deal.

Find more deals, coupon codes, and bargains on CNET’s Shopper.com.

(Credit:
Apple)

It's Apple special event time, which means it's live-blogging time as well.

Apple is planning one of its trademark special events for Tuesday, starting at 10 a.m. PDT. I’ll be inside the Yerba Buena Center for the Arts in San Francisco–home to Apple’s 2006 iPod event–live-blogging the action with a host of other CNET folks.

Start those finger-stretching exercises now to stay on top of
Apple’s iPod event Tuesday with our live blog.

Make sure to follow the action here on our One More Thing live blog, and come back to CNET News later in the day for video and detailed photos of what we expect will be a new lineup of iPods. Donald Bell of CNET Reviews will also be on hand to post his initial thoughts on the new iPods soon after the event ends.

BG: Well, I’ve been on the JasperSoft board for more than two years, so I came to the table in many ways ready to go. I think JasperSoft’s opportunity is in its ability to offer choice and flexibility in a market where customers are facing the realities of hegemony: fewer choices, higher costs and little innovation. It’s true that choice and flexibility are inherent features of open-source software, but in the BI market, where consolidation is at an all-time high, it’s more relevant than ever.

We’re all addressing a multi-billion dollar annual market opportunity, not competing with other open-source slices in the BI software stack. Customers understand more and more that open source takes the risk out of BI and puts the right economics in. Open-source BI tools are easier to use and enable better access to the right data, which fuels better business decisions. The JasperSoft community has unparalleled depth and vibrancy. All in all, these are the reasons for my bullishness.

BG: I just came from Informatica and have also worked for Brio Software. I also spent a number of years at both Sun and Apple working with the developer communities at each company.

I recently caught up with Brian Gentile, JasperSoft’s new CEO, to get his take on the rampant industry consolidation in the Business Intelligence world, where JasperSoft competes. I also asked him about his favorite open-source software (shouldn’t have, as you’ll see and whether open-source interoperability is a “must have” for his customers.

Q: What are you hearing from your customers?

BG: Consolidation is nothing new in software but today it has different consequences for consumers of technology given the presence and maturity of open source software. Customers and contributors will flock to open source BI to get the choice, flexibility and innovation that has been stripped from their grasp without their consent by the legacy proprietary vendors. One of the great things about open source is that it’s bigger than any single vendor.

With more than 2.5 million downloads worldwide and more than 7,000 commercial customers in 96 countries, JasperSoft is on a roll. But with Pentaho getting $12 million more in funding, there’s no easy sailing for JasperSoft. I wanted to see how Brian was planning to navigate the difficult dynamics of his industry.

BG: The reason open-source companies have become serious acquisition targets is customers are increasingly validating the model. The companies that will be the most sought after will have the largest, most loyal communities and existing contracts with major customers. Certainly, there a number of targets about which to speculate, not the least of which is one I think you’re quite familiar with – Alfresco.

BG: I know this has been a highly-debated topic, especially on your blog, but I have to say that customers tell us they need interoperability among open-source applications. They get why open source make sense in their environment, and they no doubt enjoy the low cost, but as they use more open-source point solutions, they need them to work together. There are a number of ways to address this; I think one of the most compelling ways is to foster community overlap – some call it “meta-communities” – at both the developer and business-user levels. This is an area I’m especially interested in.

BG: I’m a huge Drupal fan and believe that having the ability to build a more sophisticated, richer-media-based web site and then manage it well is surely a natural next step for so many net citizens who have already embraced blogging, forums, video sharing and so on. I expect this will be the next frontier of authorship, really. So, watch out Matt – you’ll have even more editorial competition on your hands with tools like this!

So, my focus has been on how to work with the JasperSoft community and our partners’ communities to deliver new value to customers who are increasingly considering the open source BI alternative.

It’s great to see Brian’s experience being put to use by JasperSoft. He’s a great addition to the open-source business community. Welcome!

Q: Who’s the next open-source acquisition target?

BG: I would argue that the “winner takes all” philosophy transcends the open-source arena. From a vendor economics view, Microsoft seems to have done fairly well in the operating system and office productivity categories. Of course we think there’s really only one open-source BI company, and it’s JasperSoft. But there’s plenty of room for competition from companies such as Pentaho that can offer pieces of the BI stack.

Q: I recently wrote a post about “winner takes all in open source,” where I made the point that there is only room for one open-source company in each category. How do you respond to this considering you share your space with Pentaho?

Q: You joined JasperSoft just a couple of months ago. What have you been working on?

Disclosure: I am an advisor to JasperSoft.

Q: What open source tools are you using and tinkering with?

Q: Thanks for the plug. (Bids start at $1 billion. But what about all the consolidation going on in the business intelligence space? Is this good or bad for JasperSoft?

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Q: What did you do before?

And to think we were getting along so well up until that point.