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Netflix Says No More Qwikster

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Netflix will keep the DVDs after all-- and abandons the controversial plans to spin off DVD rentals into "Qwikster," resulting in... no more changes (other than the previous unpopular changes to pricing structures).

NetflixThe news comes through a surprise blog update from CEO Reed Hastings.

"It is clear that for many of our members two websites would make things more difficult, so we are going to keep Netflix as one place to go for streaming and DVDs," Hastings writes.

Announced just 3 weeks ago, the plan was to have "Netflix" handle streaming video-on-demand, while "Qwikster" was to handle DVD-by-mail-- a move described as either a stroke of genius or simply idiotic, depending on who you were talking to.

Can we conclude Netflix will arrive on European shores in complete form once it launches over here in 2012? No word about that yet, unsurprisingly.

Go DVDs Will Be Staying at Netflix.com

Go Netflix Splits in Two

Control4 Changes Leadership

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Home control system maker Control4 announces a change in leadership, naming Martin Plaehn president and CEO following the retirement of ex-CEO and company co-founder Will West.

Martin PlaehnPlaehn is a former RealNetworks executive, with whom he has 7 years experience in leadership roles including its gaming and SaaS (Software as a Service) business units.

He also served as CEO at cloud computing firm Bungee Labs and 3D digital content creator Viewpoint Digital.

West will step down to serve as chairman and Chief Strategic Officer.

Under Plaehn Control4 hopes to continue pushing the home control envelope, as well as taking the platform to both high-volume service providers and the cloud.

Go Control4 Names Martin Plaehn President and CEO

DECE’s Ultraviolet Makes its Move

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UltravioletAfter launching its licensing program this summer, this autumn consumers in USA will be able to buy select movies and TV shows with UltraViolet rights.

According to the consortium Digital Entertainment Content Ecosystem, UltraViolet combines cloud access with multiple content services for devices. If successful, UltraViolet will carry over into AV integrator’s use of content for certain corporate situations, product demos, cinema, staging, and in some specific cases in digital signage.

This unified set of standards for the digital distribution of premium content, branded under UltraViolet is supported by Sony, Intel, Cisco, HP, Microsoft, Adobe, Comcast, Fox, NBC Universal, Netflix, Warner Bros. and more.

Who’s against it? Apple, of course. And Disney (who has its own propriety system).

Ultraviolet supportersThe Advanced Television Systems Committee (proposed ATSC standard for delivery of non-live content to both fixed and mobile broadcast receivers) says receivers will now be built to support different codecs, compression, and container file formats that define how video, audio and subtitles may be stored (and played back in sync) via compliant files like AVC, MP3 and DTS-HD audio— and now UltraViolet’s Common File Format (CFF)

The UltraViolet CFF may look like just another format (like MPEG, AVI, Quicktime) but it carries encryption for use with multiple DRM systems: from the device, it can manage and protect rights, control content usage, and authentic/authorize devices.

Companies like DTS (multi-channel cinema system) and Digital Rapids (software-downloads industry) will start providing Ultraviolet-compatible content development tools.

Does Ultraviolet have the industry support and technology to change how content is protected? We are close to finding out…less than a year, in our opinion.

Ultraviolet light is electromagnetic radiation (wavelength shorter than visible light, but longer than X-rays) with frequencies higher than those that humans can identify as the color violet. Presumably the brand Ultraviolet should imply the technology is embedded and invisible to the user (unless content rights are “ultraviol-ated.”)

Ultraviolet radiation is invisible to the human eye, so most people don’t know the benefits and are only aware of UV from sunburn. DRM works in kind of the same way as UV spectrum: content users don’t often see the benefits (but there are many) and are only aware when they themselves get burned.

Go Our Earlier Article Explaining Ultraviolet

Blockbuster Strikes Back

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Blockbuster hits back at Netflix as it announces Blockbuster Movie Pass, a DVD-by-mail and video streaming service in collaboration satellite TV provider Dish Network.

Blockbuster Dish Network saved Blockbuster out of bankruptcy court for $234M 5 months ago.

The timing for the Blockbuster comeback is perfect-- Netflix currently flouders due to the unpopular change in pricing structures (increasing prices by 60%) before dividing into 2 separate businesses, with "Qwikster" handling DVD-by-mail.

Analaysts predict Netflix will lose around 600000 US customers by October 2011.

The Blockbuster-Dish Network package costs $10 monthly (the older Netflix subscription price), only with a catch-- customers have to be Dish Network pay-TV subscribers.

All this before Netflix makes it over here-- which it should be doing at around January 2012 (at least in the UK and Spain)-- while we have no word yet whether Blockbuster has plans to offer a similar deal in Europe.

Go Blockbuster Movie Pass

Go Netflix Splits in Two

Netflix Splits in Two

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CEO Reed Hastings splits Netflix into separate businesses: "Netflix" dedicated to streaming video and "Qwikster" to handle DVD-by-mail.

NetflixThe announcement follows the unpopular recent change in pricing where subscribers don't get automatic access for both mail and streaming services-- an announcement some customers describe as a "confusing mess".

Other customers simply cancelled their accounts in anger.

Hastings explains the change as evolution, saying "companies rarely die from moving too fast, and they frequently die from moving too slowly".

By isolating the cost structure in the DVD-in-the-mail business, Hastings can prepare for a worst case scenario of the Blockbuster-variety, protecting the family jewels in a separate ring-fenced company. Public controversy about the move asks if Hastings is being hasty? Either he is a genius or an idiot, declare some of the blogs.

But no one knows which it is. At the core of the controversy is a very important question: are these two different customers (DVDers vs streamers) or the same consumer who just uses different priority for different video usage?

No mention yet if Netflix will use separate names once it (eventually) arrives in Europe-- something it should be doing in 2012, at least in Spain and the UK. But based on this decision, you might expect the DVD-in-the-mail model might get left behind.

Go Netflix: An Explanation and Some Reflections

Go Netflix Customers Respond With Confustion (The Wall Street Journal)

Go Spanish Eyes for Netflix

EU Cable Market Grows On

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IHS iSuppli reports the European cable market continues growing in 2010, with EU revenues reaching €18.7Bn and 7.9% Y-o-Y growth.

The analyst attributes the growth to strong growth in digital TV, broadband and telephony subscribers-- with individual service subscriber contracts reaching 101.1M (up by 3.2% from 97.9M in 2009).

Cable Revenues EU

Digital subscriber numbers for 2010 grow by 15.8% Y-o-Y, telephony subscribers by 10.8% and internet users by 10.5%.

Such numbers show the European cable market resisting the "cord cutting" trend according to iSuppli, where customers cancel their pay TV services in favour of internet-based alternatives.

However cable providers should not rest on their laurels-- the numbers are also a reminder of the importance of investments in  fiber-rich, high-speed networks.

Go IHS Screen Digest European Broadband Cable 2011 Report

Mobile Devices: Eating into TV Panels

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Reuters reports LG Display will cut its 2012 capital spending by 25% (making it the lowest in 4 years) as mobile device demand eats into that for TV panels.

LG DisplayThe situation results in the company ending up with excess capacity for over a year-- with no relief in sight.

Analysts describe the outlook for the next 9 months as "dreadful"-- weak PC and TV demand especially in Europe and the US and global Q2 2011 LCD TV shipment growth reaching record lows (6% Y-o-Y).

LG Electronics (the world's no. 2 TV maker) cuts its TV sales targets by 20%, while Sony braces for weaker sales and Philips hives off its loss-making TV division.

Prices are also heading downhil, with 40-42" LCD TV panel prices dropping by over 10% in 2011.

LG Display is the first major LCD maker to cut its capex-- even if one can expect Samsung to make a similar announcement in the future. LG Display and Sharp together make 50% of the global LCD flat-panel industry.

Go LG Display Cuts Capex (Reuters)