Kiosk.net

NBC Universal, the people that brought us the Walker Texas Ranger Lever, are now offering movie downloads over the p2p network Peer Impact.

For those of you who don’t know what Peer Impact is all about, here’s the skinny:

You download the software and use it to connect to peers. You are free to download whatever material you want from them at 99 cents a song, or whatever for other media. The files are all guaranteed by Peer Impact to be pristine, legal, and spyware free. Then, others are free to download from you. The nice thing is, whenever somebody downloads from you, money is credited to your account which you can use to buy other files. It works out nice that way.

So NBC is putting content on the network, not only full length movies from Universal Pictures, but also NBC content. Specials will be available for download, but no prime time content yet. The movies will be available 30-45 days after their DVD release (around when they go On Demand/PPV).

McGuire added that Universal’s move to distribute online made strategic sense. “Everyone’s getting into the distribution race,” he said, adding: “pretty soon, if you’re not distributing over every medium, there’s something wrong.”

What others are saying about Peer Impact.

What people are saying about me behind my back (jk).

From Hackingnetflix:

Video Business is reporting that Netflix is testing lower subscription prices. “[CFO Barry] McCarthy said that Netflix had no plans to raise its subscription fees if Blockbuster raises its fees.” Blockbuster is rumored to be exploring raising subscription pricing, and it would seem that Netflix is looking to start another price war.

One alert reader has already seen new Netflix pricing:

1 DVD at a Time - Unlimited - $7.99
2 DVDs at a Time - Unlimited - $12.99
3 DVDs at a Time - Unlimited - $15.99

Perhaps more evidence of Netflix going for the kill i.e. Blockbuster’s throat? Just a reminder of what they’ve said in the recent past about the issue “additional [Blockbuster] store closures would further increase Netflix growth for many years ahead.”

Also, if anybody knows how to actually get those prices, let me know. So far I can only find the standard prices listed in advertisements/the Netflix site. Possible the pricing test is only in selected markets or only be invitation? Comment below (who am I kidding?).

With talk like this, it’s pretty clear how Hastings envisions the future of the Netflix business model:

”We are seeing the beginning of things,” said Reed Hastings, of video on the web. ”Web 2.0 is broadband. Web 3.0 is 10 gigabits a second.” Hastings, chief executive of online DVD rental company Netflix, spoke at the TechNet Innovation Summit in San Jose.

Why, that’s just about the speed I’d want if I were to download a full HD movie on demand. I know, as long as studios continue to make the bulk of their revenue off of DVD sales it’s just a pipe dream, but you’ve gotta admit, it’ll be cool when it finally happens.

Of course there are many other applications for a 10gb/s broadband connection… this link does not go to porn.

TiVo is offering a free download-and-watch movie via its set top box. The movie, Red Trousers, is a documentary about a Hong Kong hero and Hollywood stunt man. Looks pretty bad ass.

Hackingnetflix.com suggests that this is the early manifestations of the TiVo/Netflix VOD deal, but I suspect it’s just TiVo trying to gain a competitive edge of its on volition. The same technology could be used for a Netflix/TiVo joint effort, but the same could be said for the TiVo/Yahoo partnership. In order to position itself as the leader, TiVo must offer exclusive content to its customers, and this is what it is doing.

The people at Blockbuster are giving a collective sigh of relief today after selling $150m worth of convertible debt. The stock sale has restored faith in their creditors and ensured a little more time for the sputtering company.

Blockbuster Chief Financial Officer Larry Zine told Reuters that the company felt “a sense of relief and optimism” at completing the offering.

Blockbuster had to raise at least $100 million through the offering in order for the new amendment to its credit agreement to take effect and said last week in a financial filing that it faced potential bankruptcy if it did not complete the offering.

Blockbuster has already obtained two waivers to its debt covenants earlier this year. The latest amendment suspends the requirement that it meet leverage ratios until 2008 and focuses on profit targets.

Officially, Blockbuster says they are in a “down cycle,” and as soon as they get the right product in stores things will pick up. Kiosk.net’s official statement: Enjoy it while it lasts, BB, and I hope you all have good severance packages.

Online DVD rentals in the US and especially in Europe are surging. In England, online rentals are expected to snag 60% of the market share by 2009, 5 times the current 12% share.

From Reuters:

Market research firm Screen Digest said on Tuesday that by the end of 2005, 6.3 million subscribers will have spent more than $1 billion renting DVDs over the Internet, with the market seen tripling to almost $3 billion in four years despite the growing threat of video-on-demand services.

“Our cash-rich, time-poor society values convenience very highly, and is willing to pay for it,” Screen Digest analyst Angus Wood said.

This comes to no big surprise to those of us who have been paying attention. No news as to whether Netflix will really hit 20,000,000 subscribers before the decade’s out.

From Hackingnetflix:

Wow. The cost to download a tv show went from $1.99 to 99 cents, and now to free — in about a month. The Washington Post is reporting that AOL will have 4,800 reruns available for free:

Company officials, scheduled to announce the service today, said the shows will be available on demand, meaning computer users who search six new Web-based television channels on AOL.com will be able to choose when they watch the shows and which episodes to view. The companies, both part of media giant Time Warner Inc., will profit by sharing revenue from advertising, including banner ads and four 15-second streaming video ads per 30-minute episode.

Sure, the first shows to be available will be reruns of programs like “Welcome Back Kotter,” but this is a huge step in the right direction towards Internet TV and movie downloads.

I guess that since Nick at Night updated their format to include “The Fresh Prince of Bel-Air” those “F-Troop” reruns had to go somewhere. This is a huge step in the right direction. As far as I’m concerned, reruns are one of the only things I would download, that is, specific episodes of specific shows. The bigger the catalogue becomes, the more appealing it becomes. In a perfect world, all shows would be back-catalogued ad infinitum and ready for download.

In other news (same article, other news) AOL/Time Warner are also flirting with both Microsoft and Google as advertising partners. The free TV content is part of AOL’s new business model of generating more ad revenue, and MS and GOOG want to be on the cutting edge of online advertisement. It looks like Google is winning AOL’s heart so far, being already integrated into AOL’s search engine. Maybe Google will launch a new service soon, GoolgeTV that let’s you search synopsis of huge rerun catalogues to find a specific episode? Simpsons +Krusty -Rabbi -Camp? or Happy +Days +Fonzie +Shark +Motorcycle?

According to an article on Business Week Online, Amazon has been rumored to have offered Netflix a 50% premium to buy the company, $42 a share, or $2.2bn. Neither company has commented on the rumors.

This comes from the school of “if you can’t beat ‘em, buy ‘em.” Wal-Mart and Block Buster have both failed to make a dent in Netflix, Wal-Mart giving up the ghost before things got really ugly and BB practically bankrupting itself in the effort to compete. As of yet, Amazon has not started an online DVD rental service in the U.S. They’ve seen the writing on the wall. But a service like Netflix is also in direct competition with Amazon’s DVD sales. The more Netflix customers there are, presumably, the fewer people will be buying DVDs on Amazon.

However, a $2.2bn price tag might be setting the bar a little high. Netflix has forecasted 20,000,000 subscribers in the next 5-7 years, but that’s certainly not set in stone. Either way, it will likely take Amazon 20 years to make up the difference.

Finally, it may also be more valuable to wait a couple years before making Netflix an offer, because the competition from Comcast and other On Demand video purveyors may drive prices down once again. Also, it may not be Amazon making the offer; it might be a cable operator.

How has Blockbuster lost money? Let me count the ways:

1) They posted a loss in the third quarter of $491.4 million.

2) After shuffling around some cards, namely by excluding a $347 million charge in the latest quarter for lost goodwill from former parent Viacom Inc’s purchase of Blockbuster, Blockbuster lost 24.6 million this quarter (13 cents a share).

3) How sad is it that compared to last year that doesn’t sound so bad? “For the first nine months of the year, Blockbuster lost $606 million or $3.30 per share, compared to a loss of $1.25 billion or $6.91 last year. Revenue was flat at $4.33 billion.”

Naturally, they’re selling off assets, cutting costs, and raising cash any way they can. Still…

The company said it could be forced into bankruptcy protection if a new credit agreement with lenders doesn’t become effective or if lenders recall loans because of failure to meet debt covenants — typically things like exceeding debt ratios.

Uh oh. (Link contains sfw audio)

NBC recently announced that it would be offering $.99 downloads over DirecTV DVR boxes. Call me crazy, but isn’t this a step backwards for DVR owners, who can already record any show for free? Either way, this is a clear reaction to ABC’s Apple iTunes partnership. As you probably know, Disney/ABC are currently offering TV content over iTunes for $1.99 per show.

In related news, CBS followed suit, except with Comcast Digital Cable On Demand service. The downloads are still 99 cents.

“Beginning in January, Comcast Digital Cable customers in markets served by CBS owned-and-operated television stations (including the top 7 US markets)will be able to view episodes of CSI: Crime Scene Investigation, NCIS, Survivor and The Amazing Race on Comcast’s ON DEMAND service. The on-demand programs will be available as early as midnight following their broadcast on the CBS television network. Each episode will cost 99 cents, and customers will be able to view the episodes anytime they want for up to 24 hours from the time they order them. Certain Comcast systems also may make CSI and NCIS available ON DEMAND in high-definition for customers with HD-enabled Comcast digital cable set-top boxes.”

This makes a little more sense, as most On Demand users do not own DVR boxes, and might actually appreciate the ability to buy a show they missed. Up until now, most On Demand features have been free to use. For example, if you’re an HBO subscriber, you can watch The Sopranos On Demand for free. It would be amazing if networks did the same thing, but I doubt their sponsors would like that much.