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Netflix touts its hiring practices in a Wall Street Journal Online article today:

Five years after the dot-com bubble burst, job growth has returned to Silicon Valley. But it’s a different kind of growth than in past recoveries, favoring higher-skilled workers.

Netflix Inc.’s hiring shifts are typical. During the tech boom, the online movie-rental service created 100 customer-service jobs near its Los Gatos, Calif., headquarters in the heart of Silicon Valley. After the tech bust in 2000, Netflix eliminated half of those positions. But the total headcount at Netflix’s Silicon Valley offices has grown 20%, to nearly 200 staffers in the last few years.

That’s because Netflix, while shedding some lower-end jobs, has aggressively created new, higher-level jobs. It’s adding jobs in departments such as Web engineering and product development: That groups’ hiring of engineers jumped 20% to more than 50 people in 2005 alone. “Our new engineers have an average of seven to 15 years experience,” says Patty McCord, Netflix’s chief talent officer. “Five years ago, we hired people with three to five years of experience.”

Netflix and other tech-bust survivors helped make 2005 the first time in fours years that overall employment in Silicon Valley grew.

The article continues:

The shift highlights how Silicon Valley is working to establish a competitive advantage, as lower-cost geographic rivals chip away at its strongholds. The Silicon Valley region has taken the tack of moving up the skills curve before: As competition in chip making became more heated in the 1970s, Silicon Valley chip makers relocated their assembly and manufacturing overseas but retained their core design facilities in the region. Today these chip makers, such as Intel Corp., remain dominant.

Silicon Valley’s changing employment makeup does have its downside. Wages are once again creeping up, making it more expensive to do business in the already pricey area. Average annual pay in Silicon Valley hit $69,455 in 2005, up 2.7% from 2004, though it remains below the heights of the average $80,000-plus that the region’s workers earned in 2000, according to Joint Venture Silicon Valley.

What’s more, as operations and lower-skill tech jobs leave the region, Silicon Valley has a narrower base of industries. That makes the area more vulnerable should another downturn occur, says Steve Levy, an economist at the Center for the Continuing Study of the California Economy in Palo Alto, Calif. “Los Angeles has a far more diverse economic base, with Hollywood, biotechnology, plastics and toys,” says Mr. Levy. “But high-skill tech is all we’re left with.”

Back in January, we reported that the movie industry is planning a bit of budgetary right-sizing (as cool, hip business process re-engineering consultants called mass layoffs back in the 1990’s). We’ll see how that goes. For this summer, the slate is full with really expensive movies:

[C]onsider the outlook for studio chiefs in summer ‘06: The most expensive sequels and franchise movies in history are colliding on successive weekends from May through July.

Hence, though everyone (including the studio chiefs) acknowledges that the business model is broken, the movies of summer ‘06 have to produce record numbers or heads will roll. Last summer the insiders could complain that movie attendance was sagging. No excuses this year.

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To be sure, the product lined up on the runway bespeaks glitz and glamour. So much so that the clashes on several weekends will be downright Darwinian. “Mission: Impossible 3″ gets little breathing room before “Poseidon” floats by, to be imminently followed by “The Da Vinci Code,” “Over the Hedge” from DreamWorks and then Fox’s “X-Men 3.” The July 4 melee begins with “Superman Returns” and ends with “Pirates of the Caribbean II.” And so it goes all summer.

Rolling out the comedies is no laugh either. On June 2 Paramount’s “Nacho Libre” bumps into Universal’s “The Break-Up” with Vince VaughnVince Vaughn, and “Cars” is speeding up their driveway.

Some high-profile casualties inevitably will result from this combat — the production chiefs fully understand this. Given the extraordinary costs ($150 million and up) of summer blockbusters, they know that a major flameout will impinge on the bottom line of their parent companies. They also comprehend the implications of the “Kong” conundrum: Rich talent deals have triggered big paydays for the talent, leaving only distribution fees for the studios.

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While the studios fully acknowledge they’re making too many films — and too many expensive films — the number of these movies going head-to-head this summer will reach record proportions. Though everyone concedes costs have gone through the roof, the roof will be raised once again.

Will the onslaught of big-budget movies turn around ticket-sales and boost box-office recepits? Here’s the thing, though, looking back at last year’s crop of summer movies, I just don’t see a lack of expensive movies. What I do see is a lack of interesting or entertaining movies that compelled me to trek to the theater.

Remember the crappy Netflix class action settlement? Well, Netflix has modified it. Now, it’s impossible for customers to be billed for the better plan if they do not personally authorize Netflix to change their account type.

Netflix Inc. told a judge Wednesday that it would change the terms of a class-action settlement amid criticism that the online DVD rental company was going to use the accord to recruit customers.

The settlement calls for Netflix to offer a month of free or upgraded service to more than 6 million current and former customers. The Federal Trade Commission, however, criticized the company’s plan to automatically charge for the resumed or upgraded service unless recipients took steps to cancel after the free month. In response, Netflix dropped the plan for automatic charges.

“The company felt the settlement was in the best interest of customers and shareholders, but when the FTC objected we listened,” said Netflix spokesman Steve Swasey.

Click here for complete history and information on the settlement.

And finally some sad news. This will be my last post on Kiosk.net, as I have been federally banned from posting anything on the internet ever again. To find out why, you can read the contents of this blog. Although the Feds would appreciate it if you didnt.

Netflix has been flexing its mussels with new pricing plans recently. Perhaps initiating a new price war with Blockbuster, Netflix has begun offering a plan at $4.99/month. The plan offers 1 DVD at a time with a limit of two rentals a month.

Check out Hackingnetflix to see a graphic of the advertisement and sign up page. The price appears to be a lure that draws in page views and encourages switching to a higher priced plan.

Disney, who briefly tested their VOD service MovieBeam two years ago, is now giving the service a major launch with the help of some big investors, namely, Intel and Cisco. Disney is optimistic about the endeavor, but there are a few price points that may prevent the service from catching on in a big way.

First, the up front price of the box (after rebate and activation fee) is $230. That’s a lot of money for another box that sits on top of your TV.

Second, even after paying the up front price, there is a fee for every download. $3.99 for new releases, $1.99 for older titles. Add $1 for hi-def.

Third, at any given moment there are 100 movies to choose from (c.f. Netflix 50,000).

Fourth, Comcast Digital Cable offers an OnDemand service for free with many more titles (both films and TV programs) most of which are free to view.

On the bright side, the 100 movies are rotated on a weekly basis, 10 new films added while others are taken off. The real selling point is that the movies are new releases like you’d find at a local Blockbuster (or inside a Redbox Kiosk) without having to leave the comfort of your home. Execs say that most people do not have digital cable, and the endeavor would break even if only 500,000 people signed up for the service. The boxes themselves are being sold at a slight loss.

Most of the rental fee is paid to the content providers (studios), so I wouldn’t be surprised if the service strongly favored Disney releases. Incidentally, analysts say that it costs the company 70-80 cents for each transmission.

You may recall a similar service, Akimbo, launching with only moderate success. But, as more content was added to the service, it became more popular. Maybe the same thing will happen with MovieBeam.

Well, Bubble has come out with a little less of a splash than expected. The movie itself has met an udnerwhelming reception, and not just because of the threat it poses to theaters. Here’s a review (three stars out of five) along with a little bit of industry background.

It’s not really designed to go into theaters. It’s cheap. It uses nonactors. The story is wafer-thin.

Big layoffs over at Blockbuster. WFAA reports:

Industry leader Blockbuster said Tuesday that it would cut 300 corporate-level jobs as it tries to trim $75 million in costs this year.

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The current layoffs were expected and are part of a list of actions outlined last November by chief executive John Antioco.

Blockbuster renegotiated bank debt through 2007 and said it would close stores and sell smaller, noncore businesses such as Rhino Games and operations in the U.K.

Its 35-store Movie Trading Co. chain and a group of 70 independent video stores in upstate New York and Minnesota will be closed or converted to the Blockbuster banner in the next few months, Ms. Raskopf said.

200 individuals are being laid off and another 100 vacant jobs are being eliminated. 300 down, 1,000 to go…

Well, it seems like the indefinate hiatus that Netfix’s VOD service was taking is just about over. From two sources, Netflix job postings and an official statement at Netflix’ earnings call:

Netflix appears to be staffing up for its movie download service. The company’s Web site is advertising software engineer openings for an electronic delivery service.

According to the ad, Netflix is looking for engineers with experience “delivering high-quality consumer electronics such as PVR, DVD or STB products to the home market.”

The company postponed the launch of its movie download service last year, saying there wasn’t enough content available to offer consumers because of licensing deals with Starz! and HBO that can lock up movies for a decade.

However, at its earnings call last week, the company said it plans to be a leader in the digital movie download space and would spend between $5 million and $10 million this year on developing technology for downloads. No timeframe was given for when it would launch downloads.

Apple iTunes and Google have already launched video download services, stocked primarily with TV shows, and Amazon.com is expected to launch its own digital movie download service this spring.

Hallelujah! No word on if the venture will be a joint one with TiVo, though.

Growing independent film festival Cinequest is offering free downloads and podcasts through CinequestOnline. Over 21 features and 40 shorts have been posted for free download, with over 29,000 successful downloads since 2005.

The 16th annual Cinequest Film Festival brings 185 movies to downtown San Jose March 1-12, starting with “Thank You for Smoking.” But festival organizers are almost as excited about what will be happening off-screen, including podcasts and free video downloads of DVD-quality films to watch on home TVs, computers, cell phones and other handheld devices.

San Jose won’t be the center of the film world during the festival — there’s this little thing called the Academy Awards on March 5 — but that doesn’t bother festival organizers, who always have emphasized Cinequest as an alternative to Hollywood.

“The dream always has been getting films to film fans in a way that bypasses the Hollywood system,” says Jens Hussey, the festival’s publicity director.

For more on the festival, check out this article from Mercury News Online, and/or head over to Cinequest.org.

Not many surprises in the line up, but it looks like a healthy competition. Brokeback Mountain dominates the line up, Walk the Line and Capote also have strong showings. George Clooney has an impressive showing as well. One pleasant surprise was Harry Potter and the Goblet of Fire receiving a nod for Art Direction, which I feel is deserved.

And the nominees are…