The present and future of post production business and technology | Philip Hodgetts

Archive for July 29th, 2010



The Real Cost of Netflix Streaming is the movie

The Real Cost of Netflix Streaming is the Movie, Not the Bandwidth

Despite my summary, it would not be feasible to distribute a blockbuster, like Shrek X , to everyone who wants it on release day. With the numbers that are typical for such a blockbuster release, it would take more than the world’s currently available bandwidth for several weeks.

Even Netflix continue to see growth in physical media delivery, expecting that to continue until 2014 before streaming takes over.

But it is an interesting data point that the costs of the rights are much more than the cost of the actual delivery of on-demand streams to subscribers.

But despite a huge increase in the amount of video streams it’s serving up through Watch Instantly, Netflix’s streaming costs haven’t increased proportionally. In the second quarter, the company said costs associated with delivery over third-party CDN networks only increased by $1 million versus the previous quarter. Netflix is benefiting from bandwidth costs continuing to fall exponentially as it grows its streaming business.

With the DVD side of the business, delivery costs outstrip programming costs:

But expenses associated with DVD delivery offset its reduction in purchase costs. According to Netflix, the costs of its DVD-by-mail business increased by $23.1 million in the second quarter. Due to the vast increase in its subscriber base, the number of discs shipped grew 9.3 percent, despite a 20 percent decrease in the number of DVDs per sub. Those costs could increase even further next year, as the U.S. Postal Service has announced plans to increase postage rates (again).



YouTube to increase upload limit to 15 minutes

YouTube to increase upload limit from 10 to 15 minutes

Overall an evolutionary move with YouTube, which has progressively increased the file size limit, the highest quality limit (although I don’t buy “4K”) and now an extended duration for those who aren’t YouTube Partners. YouTube Partners have been exempt from the duration limit for a while now.

Just think about it: the move would bring 50% more “haul videos,” from shopaholic teen girls; 50% more crazytime rants from random dudes; 50% more hamster montages; and 50% more double (whoah that’s almost a triple) rainbows.

Why now? I don’t know. Why not? But I’d put my money partially on the company’s recent win in the Viacom case, and a sense that they’ve now figured out more effectively how to help the big content owners (labels, movie studios, TV networks) identify infringing uploads, which might tend to fall largely in that longer-form category.

July 2010
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