Netflix CFO to viewers in new markets: be prepared for the worst

Maybe first impressions don’t matter that much, after all: Netflix often underwhelms when it enters a new market, but wins consumers over by getting better in the following months, said the company’s CFO David Wells during an appearance at the Morgan Stanley Technology, Media & Telecom Conference. “Day one, it is the worst content offering we’ll ever have,” he joked.

Wells said some at Netflix believed the company would have to knock it out of the park on day one in terms of content line-ups, but quickly learned that a lean launch, combined with a commitment to grow the library over time, often does the trick.

Wells also argued that [company]Netflix[/company] was bound to disappoint when it enters new markets, where consumers often expect the service to be like Spotify, offering access to virtually everything for one low monthly fee. “You are not gonna get that,” quipped Wells. But many of these consumers would give Netflix another chance a few months later, and compare it to other online services, or even their local TV networks. In other words: When reality sets in, Netflix actually doesn’t look that bad.

That’s important because Netflix has very ambitious international expansion plans over the next two years: The company is going to launch in Australia and New Zealand this month, and has also announced that it wants to launch in Japan later this year. Wells said Wednesday that we will see additional, not-yet-announced international expansions this year as well. In two years, Netflix aims to be available all over the world.

PlayOn gets ready to launch a desktop app with ad skipping

Video streaming underdog PlayOn is getting ready to launch a desktop client for Windows in the coming months, which will allow users to play and record web videos from over 100 sources right on their computer. The PlayOn desktop client will also offer an option to skip ads on streams from major TV networks (think of it as a poor man’s Hopper), and users will be able to cast videos to a Chromecast streaming stick or Android TV.

playon Channels

[company]PlayOn[/company] has been around for years, and was initially trying to solve a simple problem: TV networks weren’t making all of their shows available for streaming on Roku boxes and other connected devices. That’s why PlayOn streamed them to a PC first, where videos were transcoded on the fly, and then relayed to the TV screen. The company eventually added video recording as well, essentially turning computers into DVRs for web video.

All of that didn’t go over so well with content providers, which didn’t like that PlayOn was undermining their streaming policies. As a consequence of this tension, Roku was forced to remove PlayOn’s public channel from its devices.

However, PlayOn CEO Jeff Lawrence wasn’t too concerned when I asked him about this during last week’s CES. PlayOn isn’t officially available on Roku anymore, he explained, but the company still has a channel on the platform: MyMedia allows Roku users to play content stored on their PCs, and a one-time in-app purchase adds the capability to play web videos as well.

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PlayOn’s desktop app promises to relay content to Roku as well and will also support casting to Chromecast. That’s notable because Google hasn’t actually released a Cast SDK for desktop apps — but PlayOn reverse engineered the protocol and made it work anyway.

That likely won’t help PlayOn to get any more popular with networks and device manufacturers, but it could be seen as a wake-up call for publishers that haven’t officially added casting to their media. In the end, users always find a way to play their favorite content on the devices of their choice — whether it’s officially supported or not.

Jason Kilar’s Vessel delays launch but opens up to creators

Vessel, the online video startup co-founded by former Hulu CEO Jason Kilar and former Hulu CTO Richard Tom, is going to launch in early 2015 with a unique proposition: Vessel wants to give consumers early access to videos that they’d otherwise watch on YouTube. From the announcement blog post:

“Early access on Vessel will be offered for only $2.99 a month, a low price made possible by incorporating a modest amount of advertising. For those not as interested in early access, we also have a free, ad-supported version of the service, where videos become available after their early access period.”

Vessel will offer paying subscribers a three-day early access window, but is also promising video creators that they will be able to publish their clips elsewhere (read: on YouTube) after those three days are over. Which makes you wonder: Will people really pay to get those clips three days early?

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Apparently, creators have been wondering the same thing. Vessel did reveal Wednesday that it is working with YouTube stars like Shane Dawson and Rhett & Link, and that the platform will also feature content from Machinima, Tastemade and others, but word has been that the company has had a hard time signing up creators for its model. That’s despite the promise to give them a lot more money. Again, from the blog post:

“Vessel’s business model (subscription + advertising) will deliver unusually attractive economics for creators, allowing them to pursue their dreams and share ever more ambitious work with their fans. During the early access period on Vessel, we estimate that creators will earn approximately $50 for every thousand views (up to 20x the levels earned from free, ad-supported distribution). After Vessel’s early access period, creators will continue to earn money through distribution of their videos on the free, ad-supported web – on Vessel and anywhere else they choose.”

Because of the sign-up challenge, Vessel had to postpone its launch. The company tried to get Vessel ready by the end of the year, and in fact, Vessel’s website promised that it was “coming in 2014.” Now, it is only opening up a sign-up phase for creators, and promises consumers to be ready by early 2015.

Vessel's homepage, up until recently.

Vessel’s homepage, until earlier this week

Netflix exec: we want to be everywhere in the world in five years

Netflix wants to be present all around the world before 2020, said the company’s Chief Content Officer Ted Sarandos during an investor event Monday. Speaking at the UBS Global Media and Communications Conference, Sarandos said: “Within five years, we’d love to see the product be completely global, available everywhere in the world.”

[company]Netflix[/company] stepped up its international expansion this year by entering six new markets in Europe, including France and Germany. The company also announced earlier this month that it wants to launch in Australia and New Zealand next April. That launch will bring the number of countries that Netflix is available in to over 50.

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Netflix still has a lot more subscribers in the U.S. than in its international markets, but the company is now growing twice as fast abroad. Netflix CEO Reed Hastings has said in the past that the company may eventually generate up to 80 percent of its revenue outside of the U.S..

IAC reportedly looking to sell CollegeHumor for $100 million

Barry Diller’s IAC wants to cash in on the online video boom: IAC is putting CollegeHumor on the block, according to a Fortune.com report. IAC is reportedly looking to make $100 million with the sale, after acquiring CollegeHumor for $20 million eight years ago. However, CollegeHumor isn’t the only comedy site looking for a buyer. FunnyOrDie and the Onion are also on the market, with FunnyOrDie reportedly looking to make as much as $300 million, and the Onion asking potential buyers for $100 million as well.

TV networks getting that sinking feeling

The networks generally insist that marketers are simply being cautious and that ad spending will ultimately pick up, but investors and analysts are clearly growing skeptical.