Netflix price increase - an experiment?

I have been surprised in reading all of the coverage of Netflix's new pricing scheme, that nothing I read  has pointed out a possible reason for the new structure -- to create two distinct products, one DVD-by-mail and one streaming.  This is one way, perhaps the only real way, for the company to really understand how consumers value the two offerings.

When Netflix launched streaming in 2007, it was positioned as added-value for the mail-based subscription offering.  This brought a number of benefits.  First, it created broad exposure to the service (because every Netflix subscriber has to have access to an Internet connection to manage one's queue, if nothing else).  Second, because the streaming offering was meagre at first, it wasn't a product that could really stand on its own anyway.  Third, when it was launched it only worked on Internet Explorer on Windows PCs -- Macs, Roku, Xbox, Playstation, connected Blu-Rays and TVs, iPhone and ubiquity came later (and added tremendously to the value). Finally, Netflix probably had no idea how popular the streaming option would be.

Watch Instantly became much more attractive with its deal with Starz in 2008, which brought Watch Instantly premium-window movies -- much higher profile content than its streaming offering had offered up to that point (and arguably the best streaming stuff on the service today).  The explosive growth of the service's subscriber base since 2007 certainly suggests that streaming has had a lot of value (end 2Q07 sub count was 6.7 million; end 2Q11 paid sub count was 23.3 million - yowzah!)

Now, by creating two different subscriptions, Netflix will get some real data on how its customers value the different offerings.   Right now, Netflix has extensive data in how they use the services (time spent watching streams, DVDs ordered per month, platforms used for watching those streams), but, as many people know, there is no test for how people really value a service than actually paying cash for it.

To the extent that Netflix wants to add live television channels (like, say Epix or Starz or Disney Channel, for starters -- ad -supported services will be trickier because advertising has different rights issues), they would prefer to have a subscriber count that does not include people who only use and value the mail-based service.

That said, an effective 60% increase for those, like myself, on the one-DVD-unlimited plan sure seems like a big, big jump.  But that is a discussion on which many others have already commented.

TWCable iPad App revised - what's new in 2.0

On 7 July 2011, Time Warner Cable released its second version of its popular and within-the-industry controversial iPad app.  The app take some major steps forward adding significant functionality, but seems very much like a work-in-progress rather that a polished piece of software.


The first noticeable change in the 2.0 TWCable TV iPad app is that its splash screen is now purple, unlike the avocado shade of 1.0 (my review here).  Branding people will note that TWC's web site is blue with a white logo, some of its trucks are painted with a lime-colored logo on a white field and this app has a white logo on a purple background.

The second change is the semi-persistent navigation below offers 4 choices:  Live TV, Guide, DVR and Settings.  Previously, the only function was Live TV.

Starting with the most mundane, Settings has 3 choices:  Favorites (your list of your favorite channels -- which starts out empty), Devices (which set top box do you want to control via the iPad) and Sign Out.

The Guide button adds new functionality -- the ability to use the iPad app as a remote control for a set top box.  The guide is the familiar scrolling electronic programming guide (EPG) from digital cable.  It launches on channel 1.  It is not the guide for the channels on the app.  When a channel is touched, the user is given the choice of "Watch Now" or "Add to Favorites".  The guide does not require that you look at all 1000 or so channels on the system, it gives a choice of 3 views:  All Channels, Favorites (more on this later) or just the HD channels.  One missing choice, that would seem to be an easy addition would be the list of the channels to which the users subscribes; this would also be much more useful than "All Channels".

DVR also adds new functionality -- the list of Scheduled Recordings on the connected cable box, but not what has already been recorded (and, there is no way to play those recordings via the iPad).  This functionality is provided on TWC's website.

Live TV works much as it did in 1.0, except that users have lost the "Last Five Channels Viewed" navigation option from the previous version.  That's a step backward -- it was one of the innovative navigation features (i.e., something other than a scrolling guide and channel up/channel down).  The Favorites list does not apply to Live TV viewed via the app, only to the set top box guide.

There is significant latency in switching channels.  The app also seems buggy, it crashed twice on me in a short period of time.

There are 15 new channels on the app:  Africa, Cooking, Discovery Health & Fit, DIY, ESPN Classic, Gol, Gospel Music, Great American Country, Jewish Life, Mav, Shop NBC, Smithsonian, Tennis, Universal and Word.  Seven of these are SD, the other eight are HD.  Live sports events have been beefed up with Gol and Tennis, previously only Golf was in that category (ESPNews and ESPN Classic don't show live events).

In terms of new programming ground, the app now contains HD-only services (Smithsonian and Universal), the previous version did not.  The other broad categories of what is not carried continue to be:

• any broadcast channels
• any premium channels (e.g., HBO, Showtime, Starz)
• anything from Viacom (e.g., Nick, MTV, Comedy, Spike)

Channel list in the order they appear in the app is below (which is slightly changed from before).  By my count there are 83 channels.  For those scoring at home, 22 are SD (at least 3 of which are carried in HD on the system - Bloomberg, Cooking and Sundance).  Time Warner Cable is claiming that there are more than 100.  The reason for the discrepancy might be that some of the channels are not available on my system and that I do not subscribe to some of the channels (although I get most everything TWC offers in Northern Manhattan).  I have confirmed that TWC only provides access to services which the subscriber receives on TV. The new additions are in italics:

1. A&E HD
2. ABC Family HD
3. Africa Channel HD
4. AMC HD
5. Animal Planet HD
6. Bio HD
7. Bloomberg (still SD)
8. Boomerang (SD)
9. Bravo HD
10. Cartoon Network HD
11. Chiller (SD)
12. CNBC HD+
13. CNBC World (SD)
14. CNN HD
15. CNN International (SD)
16. Cooking Channel (SD)
17. C-SPAN HD
18. C-SPAN2 HD
19. C-SPAN3 HD
20. Current TV (SD)
21. Discovery Channel HD
22. Discovery Fit & Health (SD)
23. Disney Channel HD
24. Disney XD HD
25. DIY HD
26. E! HD
27. ESPN Classic (SD) - this service is not on the WatchESPN app
28. ESPNews HD
29. EWTN SD
30. Food Network HD
31. Fox Business HD
32. Fox News HD
33. FX HD
34. G4 HD
35. Galavision HD
36. Gol TV HD
37. Golf HD
38. Gospel Music HD
39. Great American Country (SD)
40. GSN (looks like HD)
41. Hallmark Channel HD
42. HGTV HD
43. History HD
44. History International HD
45. HLN HD
46. Home Shopping Network HD
47. Hub HD
48. IFC HD
49. Investigation Discovery HD
50. Jewelry Television by ACN (SD) -- the weird branding continues
51. Jewish Life TV (SD)
52. Lifetime HD
53. Lifetime Movie Network HD
54. Lifetime Real Women (SD)
55. Mav TV HD
56. Military Channel (SD)
57. MSNBC HD
58. Mun2 (SD)
59. National Geographic HD
60. National Geographic Wild HD
61. NY1 News HD
62. NY1 Noticias for Time Warner (SD) -- odd "for TW" branding continues
63. Oprah Winfrey Network HD
64. Ovation (SD)
65. Oxygen HD
66. Planet Green HD
67. QVC HD
68. Reelz Channel HD
69. Science HD
70. Shop NBC (SD)
71. Sleuth (SD)
72. Smithsonian HD
73. SoapNet (SD)
74. Style HD
75. Sundance (still, oddly SD)
76. SyFy HD
77. Tennis Channel HD
78. TLC HD
79. Travel Channel HD
80. TruTV HD
81. Turner Classic Movies HD
82. TV Guide HD
83. TV One HD
84. Universal HD
85. USA HD
86. WE tv HD
87. Word Network (SD)

No longer on the app -- Wedding Central, which was shut down on July 1, 2011.  This review is of the Version described in the iPad Settings section as "Developer Build", for reasons that are unclear to me.  It is Version 2.0.0 in iTunes.