Netflix Finally Responds to Angry Customers

Yesterday, Netflix had an earnings release. The company reported better-than-expected earnings at $1.26 per share and a 52% revenue increase. According to “Netflix addresses customers ‘upset’ with price hike” by Julianne Pepitone of CNNMoney.com their earnings report dealt with angry subscribers and it sent a gray cloud over the release.

A few weeks ago Netflix announced they would be charging more for DVD subscribers; the new price for DVD and online subscription is $15.98 which is almost the same as paying for each subscription, DVD and online, separately. That subscription includes only having one DVD out at a time and for more than one, the price is higher. Netflix received a lot of anger considering the previous subscription price for both services was $9.99. That is almost a 60% increase. 

The response from Netflix:

“It is expected and unfortunate that our DVD subscribers who also use streaming don’t like our change, which can be as much as 60% increase”

“…some subscribers will cancel Netflix or downgrade their Netflix plans, we expect most to stay with us”

The optimism behind the second quote could be inspired by the fact that “75% of Netflix’s new customers during the quarter signed up for streaming-only plans”. It could be that the price increase is Netflix’s way of phasing out DVDs although they claim they are standing by the DVD division. But the problem is whether phasing out DVDs or trying to cater more to online subscribers, Netflix has drastically pissed off some customers. And now the anger is going to affect earning expectations.  

For Netflix to say it’s “unfortunate” that people are angry is ridiculous. I could understand a gradual increase but 60% price increase is really testing the loyalty of customers.  Netflix should have done a price increase when they had no competition. Now, customers can jump ship and they won’t drown. With more competition and media content expected to get more expensive possibly meaning less content on Netflix, Netflix needs the support of its customers and their forgetting the customers that helped them with their success.

Kim Kardashian Sues Gap Claiming They Hired a Look-alike

Did you know Kim Kardashian did a commercial for Old Navy? Oh, my mistake, it’s her look-alike according to Kardashian herself.  According to “Kim Kardashian sues Gap over look-alike model” by Steve Hargreaves from CNNmoney.com, she sued Gap Inc yesterday claiming the model is purposefully a Kim Kardashian look-alike. The statements quoted in the article from her lawyer and her:

“Old Navy used Kardashian’s likeness in the form of a celebrity look-alike, and styled the infringing ads to evoke Kardashian’s identity and persona”

“Kim Kardashian is immediately recognizable, and is known for her look and style, her identity and persona are valuable. When her intellectual property rights are violated, she intends to enforce them”

“I’ve worked hard to support the products I’m involved in and personally believe in”

Borders Shutting Down - Liquidation Could Start Friday

Despite filing for bankruptcy and putting themselves up for bid, Borders is shutting down its remaining stores. “Borders Forced to Liquidate, Close All Stores” by Mike Spector and Jeffrey A. Trachtenberg of WSJ.com reports the company will be asking a judge “to approve a sale to liquidators led by Hilco Merchant Resources and Gordon Brothers Group.” The article also reports,

“Liquidation of its remaining 399 stores could start as soon as Friday, and it is expected to go out of business for good by the end of September.”

I previously wrote in February of Borders filling of bankruptcy. I wrote the chain suffered from three problems: competition from major retailers entering the book market, the delay of Borders entering the e-book market, and the change of executives. The companies plans were to close some stores down and ask Publishers they owed to give them more time - but neither planned worked.  The final solution seemed to sell the company and up until last week that seemed to be a possibility – but that fell apart also. The response from Borders President Mike Edwards about the closing announcement:

“Following the best efforts of all parties, we are saddened by this development… We were all working hard toward a different outcome, but the head winds we have been facing for quite some time, including the rapidly changing book industry [electronic reader] revolution and turbulent economy, have brought us to where we are now.”

Are You Ready for "Wall $treet Wives"?

Reality show entertainment is obsessed with the lives of housewives, or at least wives of interesting men such as mob-affiliated criminals or basketball stars. Devon Fleming wants to know if the reality housewife brand can expand to Wall Street. According to “Searching for the Wives of Wall Street” by Kevin Rose, Devon Fleming is a wife of a Deutshe Bank wealth manager and introduced “Wall $treet Wives” as an idea in 2007.

According to Fleming, “They all wanted this ugly cat-fight scenario”, which is a common feature in the reality TV housewife brand. It’s suggested that Fleming turned down the offer in 2007 but decided to re-pitch the show and is now casting. Fleming and Sammi Mendenhall, friend and co-producer, want the show to exhibit “fabulous lives”, “intelligent women who hold it down” and “women behind the men of Wall Street, some of whom were victims of the recent financial crisis”. The article mentioned other examples of Wall Street reality shows: “Wall Street Warriors” which I have watched and the first season has a cast displaying different roles from Wall Street; and Bravo is “developing ‘The Women of Wall Street’”, a behind-the-scenes show of women on Wall Street.

Google Reports 10 Million Google+ Users & 36% Increase in Profit

Google is having a good week. After recently introducing Google+, David Goldman of CNNMoney.com reports the new social network has 10 million users. While the Goldman’s article reports the figure as “1% of Facebook’s reported users” and the network is closed off during it’s trial phase, 10 million users is an impressive figure. Larry Page, CEO of Google, report additional figures: 1 billion items being shared and the “’+1’ button has been clicked 2.3 billion times a day”.

The 10-million accomplishment is part of Google’s attempt to become bigger. After introducing mobile payment services, Google has been on a hiring surge, spending heavily on its infrastructure, selling “its Chromebook line of laptops aimed at current Microsoft corporate clients” and launched a cloud music service. Larry Page is very optimistic that the recent moves are the best for the company –

“Our focus is more wood behind fewer arrows…I’m very happy with our progress”

Competition against Netflix May Lead to Higher Media Content Prices

Netflix is enjoying their sweet position as the leader of media streaming. Now companies are entering the streaming business, movie studios are embracing this new industry, and studios are expected to charge more for their content. “Netflix’s vanished Sony films are an ominous sign” by Julianne Pepitone of CNNMoney.com reports, when Netflix’s contracts run out the cost of content will “increase more than tenfold”.

Netflix recently lost Sony content because of a streaming cap in Sony’s contract with Starz. The article reports that the Disney catalog could possibly suffer the same fate. These contractual problems are leading to the fact that studios see the value of their content in the streaming industry.  With Google, Amazon, and Hulu getting into the industry, studios see reasons to charge more. The article reports analyst Michael Pachter “predicts Netflix’s streaming content licensing costs will rise from $180 million in 2010 to a whopping $1.98 billion in 2012” and he goes on to say,

“The content owners realize they can’t give Netflix all the leverage… Netflix had the power when they were the only bidder. But you don’t have as much leverage when you suddenly have competition”

News Corp Moves Quick to Close News of the World Over Hacking Scandal

In a crisis management move to separate itself from scandal, “Tabloid to Close Amid Scandal” by Paul Sonne, Cassell Bryan-Low and Russell Adams of WSJ.com reports News Corp. is shutting down News of the World, a U.K. Sunday tabloid. Recently, the tabloid has been accused of hacking into phone records and voicemails of murder victims.

The paper has always had an aura of controversy for its speculated “use of private detectives to break into the mobile-phone voice mail of celebrities and political leaders”. The recent scandal exposed this week:

“…in 2002, the paper accessed the voice mail of an abducted 13-year-old girl who, it turned out, had been murdered. Other allegations then surfaced of hacking into phones tied to other child-murder victims, as well as the families of war dead and of victims of 2005 terrorist attacks in London”

No More Google Realtime Search - Their Contract Ended w/ Twitter

I am an avid user of Google Real-time search or should I say was. For the past couple of days, I tried to use real-time to check if Hootsuite was having problems and I found the option gone. Google has gotten a recent update, maybe to integrate Google+, so I assumed the feature was lost in the update. But according to “Google shuts down Realtime Search as Twitter deal expires” by Laurie Segall of CNNMoney.com, the real-time option has been eliminated from Google.

Google and Twitter’s contract to having the real-time option has expired on the 2^nd ending the two-year deal. The statement from Google about the expiration:

“Twitter has been a valuable partner for nearly two years, and we remain open to exploring other collaborations in the future”

“We’ve temporarily disabled google.com/realtime. We’re exploring how to incorporate our recently launched Google+ project into this functionality going forward”

Twitter:

“We work with Google in many other ways”

CNNMoney is reporting that Google+ might be the reason behind the contract expiration; the new social media is supposed to have its own real-time option. As Google put it,

“Out vision is to have google.com/realtime include Google+ information along with other realtime data from a variety of sources”

Hopefully, some sort of real-time twitter related search will be at Google. I tend to use real-time search to find out news or problems (of course, by first checking the actually news first) such as tech problems, phone app outages, traffic accidents, etc. If the feature is going to be available via Google+, it’s probably time for me to make a Google+ profile.