Currently, there is no law or autonomous body governing digital content. In a gazette notification issued on Wednesday and signed by President Ram Nath Kovind, online films, digital news and current affairs content now come under the purview of the I&B Ministry headed by Prakash Javadekar.

This will give the government control over OTT platforms, which were unregulated till now. From time to time, the government had indicated the necessity to monitor these platforms. In October 2019, the government had indicated that it will issue “negative” list of don’ts for the video streaming services like Netflix and Hotstar. It also wanted the platforms to come up with a self-regulatory body on the lines of the News Broadcasting Standards Authority.

Anticipating the government’s intervention, in January 2019, eight video streaming services had signed a self-regulatory code that laid down a set of guiding principles for content on these platforms.

The code adopted by the OTTs prohibited five types of content. This includes content that deliberately and maliciously disrespects the national emblem or national flag, any visual or story line that promotes child pornography, any content that “maliciously” intends to outrage religious sentiments, content that “deliberately and maliciously” promotes or encourages terrorism and, lastly, any content that has been banned for exhibition or distribution by law or court.

The government had refused to support this code.

At present, the Press Council of India regulates the print media, the News Broadcasters Association (NBA) represents the news channels, the Advertising Standards Council of India regulates advertising, while the Central Board of Film Certification (CBFC) monitors films.

Mr. Javadekar did not speak on the issue or explain the implications of such an order. The Ministry has also remained tight-lipped on exactly what is in store for digital news media and OTT platforms. An official from one of the leading OTT platforms said that it was too early to comment since there was no clarity from the government on what this notification would finally lead to.

Founding editor of news portal The Wire, M. K. Venu, said the government had been giving enough hints from time to time that it wanted to regulate digital media but the exact nature of the regulation it wanted to bring was not clear. “There is no clarity on what they mean by digital media. The government talks about digital media and digital aggregators in the same breath but they are different things. Are they looking at licensing, are they looking at entry barriers, or are they looking at curbing digital media? We still don’t know,” Mr. Venu said.

So finds Hub Entertainment Research’s new “Evolution of Video Branding” study. Last month, Hub surveyed a U.S. census-balanced sample of 2,015 consumers ages 16 to 74 who have broadband access and watch at least an hour of TV per week. 

The survey, conducted annually since 2013, examines how consumers discover, choose and consume entertainment content, including awareness of various TV brands, how brands influence what viewers watch, and which are perceived as providing the best content and experiences. 

Asked which networks they would keep if they could only keep a limited number, 39% of viewers currently name Netflix. That’s 11 percentage points more than the runner-up CBS, but down significantly from Netflix’s 44% in last year’s branding survey. 

CBS’s 28% slipped just a point from last year, putting it in a tie for #2 with ABC (cited as indispensable by 28% both this year and last). 

Third-runner NBC declined to 26% from 28% in 2019, and ESPN declined to 22% from 24%. 

Could Disney+’s arrival already be affecting the scores? Possibly. The new streamer wasn’t around for 2019’s survey, but Hub notes that being considered indispensable by 14% of overall viewers surveyed, so soon in its lifecycle, is notable. 

Furthermore, Disney+ is even more influential among younger viewers — cited as indispensable by fully 25% of those between the ages of 16 and 34. While that’s still far below Netflix’s 53% among this group, it’s just shy of Hulu’s 26% and handily beats ABC’s 15% and ESPN’s 24%. 

However, as one might guess, Disney+ isn’t in the top five among older viewers. The leaders among those 35 and older are CBS (38%), NBC (35%), ABC (35%), Netflix (32%) and ESPN (22%). 

Importantly — as Netflix is well aware, judging from its huge production budgets — the SVOD’s popularity is strongly rooted in its original content offerings. 

Overall, nearly six in 10 (57%) of viewers say that the description of a show as “original” makes them more interested in watching it (with 16% and 41%, respectively, saying it makes them “a lot” and “a little” more interested). 

And Netflix leads by a long shot when viewers are asked which brands produce the best original shows: it is cited by 23%, versus just 6% for runners-up Amazon Prime Video and ESPN. CBS and HBO were cited by 5% and 4%, respectively, on this question. 

The power of hit — or at least visible — shows also continues to be clear, particularly among younger audiences. 

Fully 54% of those 16 to 34 report having signed up for a video service within the past year for the specific purpose of getting access to a show exclusive to that service. Nearly a quarter (22%) of those 35 and older say the same. 

Interestingly, a whopping 61% of Disney+ subscribers in the survey said they have signed up for a new service (not necessarily Disney+, but still…) for that reason. Could this have anything to do with “The Mandalorian”? Just asking. 

Asked what makes them most interested in watching a show, just 32% of the younger viewers — versus 44% of those 35 and older — cite the genre of a show. 

Similarly, 19% of the younger demo, versus 24% of the older, cite the network brand. 

Factors that — according to their self reports, anyway — are more influential among the younger than the older include access to all episodes at once; being recommended by the service provider; a show’s “buzz” quotient; big production values/budgets; and the ease of binge-watching a few episodes:

More evidence that viewers tend to underestimate the influence of network brands on their viewing choices: Just 25% overall say the network a show is on has a significant impact on their decision to watch (rating that factor between 8 and 10 on a 0-to-10 scale).

Another 22% say the network makes little to no difference (rating it between 0 and 2). The remaining 53% fall in between, offering a neutral response.

But the real influence of network brands is demonstrated by a follow-up question designed to tap into underlying perceptions. 

All respondents heard the exact same description of a fictitious crime drama, but different respondents were told different things about the identity of the network that will air the show (17 different sources were tested across the sample).

Result: Interest in watching the show varied significantly by the source it was associated with. Those told it would be a Netflix show were the most interested, followed by Fox, CBS and HBO.

“When it comes to viewing decisions, the impact of ‘brand image’ is a lot like the impact of advertising,” concludes Hub co-founder Peter Fondulas, who co-authored the study. “Most consumers reject the notion that their decision to watch a show is influenced by something as intangible as their general perception of the TV source airing it. But these results demonstrate that brand perceptions play a key role in helping viewers navigate today’s vast TV landscape and decide which shows are at least worth a try.” 

So much for branding’s “irrelevance” in today’s environment.

According to data produced by Gemius/PBI for Wirtualne Media, it had 3,418,684 real users, compared to Netflix’s 2,912,913.

Its reach was also higher (12.2% v 10.39%), though Netflix had almost three times as many opens (39,595,671) as vod.pl (13,527,594).

Netflix saw its user total fall, from 3,478,832 in July, while its reach fell from 12.45%.

Of particular note in the figures were falls by the long-established player.pl and ipla.tv, as well as strong performance by the newcomer chili.com.

Player.pl (TVN/Discovery Polska) andf ipla.tv (Cyfrowy Polsat) occupied sixth and eighth place respectively, with chili.com claiming ninth.

Cda.pl –premium was the third most popular service after vod.pl and Netflix.

Vod.pl is owned by Ringier Axel Springer Polska.

According to the research outfit, total video entertainment consumer spend in France is expected to exceed €7 billion this year, making France the third largest video entertainment market in Europe. Pay TV accounts for 64% of that but, despite the closure of CanalPlay, SVOD has started to gain traction, with SVOD revenues expected to pass €827 million this year. Netflix is the dominant player, with five million subscribers at the end of last year, accounting for half the market.

Only 40% of SVOD subscribers currently take more than one service. The demise of Canalplay means that Netflix lacks a serious local competitor.

“Despite the closure of CanalPlay, SVoD has started to take off in France driven by Netflix’s fantastic performance. They have acquired the rights to key local language shows, which have been well received and have created a buzz around the service. From 5 million subscribers at the end of 2018, representing half the market, we are expecting their subscriber base to grow further in 2019,” said Tristan Veale, market analyst at Futuresource Consulting.

“Over two thirds of Netflix users now say viewing on any TV is their most preferred way, with Smart TV’s in particular a key driver, a trend we are seeing in many other markets we survey.”

Futuresource’s analysis of the French video market follows a similar exercise on Italy, where it found that SVOD was growing strongly from a lower base, with a 65% uplift in revenues to €231 million last year.

Futuresource found that pay TV remains dominant within video spend among consumers, but falling subscriptions meant that the value of the market declined by 2% last year to €2.78 billion. The analyst outfit expects subscriptions to fall by a further 7% this year following Mediaset’s exit from premium TV.

“Netflix is a key driver of revenue, although TIMVision had more subscribers thanks to frequent bundling with broadband. In 2019, consumers are expected to spend €340 million on SVoD, up by 47%, with 5.3 million households subscribing to one or more services,” said Veale.

Furthermore, according to the findings of research undertaken by PMR and published by Wirtualne Media, it claims the most revenues as it has the highest prices.

Poland’s pay-TV and internet video content market was worth PLN6.95 billion (€1.61 billion) in 2018, or 3.9% more than year earlier. This was largely thanks to the performance of VOD, which accounted for around 12% of the entire market and saw its revenues grow by 25%.

All told, 2.7 million viewers paid a total of PLN854 million in 2018 to watch on demand content.

There were a total of 9.4 million VOD users in Poland in 2018, of whom 55% accessed AVOD/TVOD and 45% paid VOD services.

Almost half (46%) of VOD users watched services through operators’ channels, chiefly HBO GO.

Significantly, the research also shows that the majority of respondents (70.9%) would not drop their pay-TV service in favour of an on demand one.

Revenues from SVOD service are forecast to grow by an annual average of 7.8% between 2019-24.

At the same time, the number of SVOD users is forecast to grow by 1.6 million over the same period.

The world's largest online TV network late Monday reported its strongest year of subscriber growth to date. Netflix added 24 million customers in 2017, bringing its global total to 117.6 million. For the final three months of the year, the Los Gatos, California-based company crushed Wall Street estimates and suggested it will continue to do so in 2018

While rival media companies merge, fire staff and fret about the future of their businesses, Netflix keeps chugging along, adding customers at home, in Europe and Latin America. Fourth-quarter sales grew by a third to $3.29 billion, the company said, while earnings almost tripled from a year prior to 41 cents, meeting estimates.

Netflix will plow all of that and more into new TV shows and movies. The company has said it will spend as much as $8 billion on programming this year, and disclosed Monday it will shell out another $2 billion for marketing. Netflix is also dramatically increasing its non-English programming, with plans to release 30 local language productions in 2018.

The shares rose as much as 13 percent to $257.71 in New York, marking a new high for the stock, which had already gained 19 percent this year through Monday.

Netflix signed up 8.33 million customers in the fourth quarter, surpassing analysts’ estimates of 6.34 million, thanks in large part to the popularity of the fantasy series “Stranger Things” and the new Will Smith movie “Bright.”

That success has inspired Facebook Inc., Apple Inc. and Amazon.com Inc. to try their hand at original programming. It has also spurred rivals like Walt Disney Co. to invest more in online services and acquire competitors. Yet Netflix enjoys a head start on all those players.

International Gains

International territories accounted for the bulk of the subscriber growth and hold the key to Netflix’s future, with additions of 6.36 million topping the 5.05 million average of analysts’ estimates. Netflix said Rodolphe Belmer, the chief executive officer of Paris-based Eutelsat Communications SA, will join its board.

The U.S. business, where growth had been slowing, also showed vigor. The company signed up 1.98 million new customers at home, up from a year ago and beating analysts’ projections of 1.29 million, according to Bloomberg data.

Netflix churns out a wide range of new shows every month to entice new viewers and keep old ones. In the latest quarter it also released “The Crown,” the first season of David Fincher’s “Mindhunter” and its first original German series, “Dark.”

“In only five years since launching our first original series, Netflix had three of the top five most searched TV shows globally for the second year in a row,” the company said in its letter to shareholders.

Netflix expects to add 6.35 million customers in the first quarter, more than the average 5.18 million projection of analysts. That includes 1.45 million new subscribers in the U.S.

Quarterly Profit

Splurging on new shows comes at a cost. Netflix will burn through as much as $4 billion in cash this year and said it will borrow again. Critical analysts continue to wonder when spending will level off. The company has stayed around break even for most of its existence, but continues to need cash because of lavish spending on programming.

Long-term debt stood at $6.5 billion at year-end, while long-term content liabilities totaled $3.33 billion.

The ability to raise prices could boost Netflix’s profitability in the long-term. The company’s October price increase -- $1 a month for the most popular plan -- had little impact, if any, on growth in the quarter. While a previous increase slowed subscriber gains, this one passed with less scrutiny or media coverage. The most popular plan costs $11.

While the company has continued to show growth with its existing strategy — investing a ton in its original content strategy in the hope that it’ll convert Emmy and Grammy awards into subscribers — it’s going to get more expensive. Netflix has basically acknowledged that as it says it’s going to ramp up its original content and marketing spend, and in October said it would raise up to $1.6 billion in debt. In short, its strategy that worked this year will, in theory, play out next year as it looks to continue putting out strong original shows

The company has said it expects to spend between $7 billion and $8 billion on original content, a clear sign that it’s going to double down on that strategy that seems to have given it a pretty successful strategy in 2017. It had to raise prices, which could create a bigger barrier to consumers. But if all goes well, a successful repeat of that strategy — which means it has to continue to come out with great shows — will help it continue to grow where it needs.

The company’s performance as a whole has made it look quite good for Wall Street. Netflix’s share price has risen more than 50% in the past year. That carries with it a whole batch of benefits: it looks great as a public barometer for the company, it means the company can woo talent with good compensation packages, and it keeps away activist investors that are looking to agitate change in the company. The whole time this is happening, Netflix’s content costs are ballooning, but that seems to have yet to faze investors. And that’s a group that, for better or worse, Netflix needs to keep happy. Netflix is going to have to grapple with an increasingly competitive group including Hulu and Amazon, which are now churning out shows that are getting similar accolades to Netflix’s best series. Hulu came out with The Handmaid’s Tale, which received high praise, showing that there’s an opportunity to go after Netflix’s sweet spot with its own original content.

If Netflix is going to have a repeat of 2017, it’s going to have to figure out how to both keep picking up users (with a strategy that seems to be working in place) and keep them from flipping to other services. Each service offers some unique original content, but they also have huge backlogs of content that serve as the backbone of a video streaming service. With rising prices, Netflix has to ensure that it makes good shows, but also ensure that it creates an experience that keeps people coming back to watch — whether that’s through improvements in its recommendation engine or a robust backlog of content that it can keep signing on.

Netflix passed a pretty significant milestone when it comes to its international expansion plans: (slightly) more than half of its subscribers now come from outside the U.S. Its users are watching around 1 billion hours of content per week (that’s billion-with-a-B). Its spending on original content appears to be working there, too, with internationally-oriented shows like 3%. Its user base appears to be growing, though it’s not clear when it’ll hit that absolute saturation point where it has to start figuring out what the next generation of products looks like. That may be something along the lines of allowing offline viewing of some shows, which it began in November this year, or it may be improved recommendation engines to help a user discover that they like Twin Peaks as much as they’d like American Vandal. Either way, it still seems like there’s an overhead that Netflix hasn’t quite hit yet as it continues to beat Wall Street’s — and its own — expectations for subscriber growth.

So we’ll see if the company is not only able to continue to churn out that content but also actually have the capital to stick to that aggressive spending plan it set for itself. That, and it probably needs to stop creeping on its members.

In the April to June quarter, Netflix pulled in 5.2 million additional customers, raising its total subscriber figure from nearly 99 million in the first quarter to a hair under 104 million. Netflix CEO Reed Hastings said Monday afternoon the addition figure was an “all-time record for Q2s.”

But that wasn’t the only milestone the company hit in the second quarter. Netflix also reported the number of international subscribers has surpassed domestic customer figures. Stateside, the company reports it has just under 51.92 million total memberships. That compares to a reported total of 52.03 million international memberships. The company indicates the latter figure is expected to grow by 3.7 million in the third quarter, and is forecasting “positive international contribution profit” for the full year 2017 — a first for its international segment.

According to Hastings, the growth continues to be driven by Netflix’s lineup of original content, including new seasons of fan favorites like “House of Cards” and “Orange Is the New Black,” and the debut of “13 Reasons Why.” All told, Netflix says it launched 14 new seasons of original series, 13 original comedy specials, six original documentaries, two original documentary series, nine original feature films, and seven original kids’ series in the second quarter.

That content, though, comes with a cost.

The company reported negative free cash flow of $608 million in the second quarter 2017 compared to negative $254 million the year prior and negative $423 million in the first quarter. The free cash flow shortfall is expected to rise from $2 billion to $2.5 billion by year’s end, Netflix indicates. But with “strong member, revenue, and profit growth,” the company says it plans to continue investing in content, particularly in owned originals. And Netflix isn’t expecting to come out of the free cash flow red anytime soon. The company’s second quarter note to investors says Netflix “expect(s) to be FCF negative for many years.”

Jumping back to that comment about revenue and profit growth, it should be noted that Netflix grew revenue by 32 percent to $2.79 billion in the second quarter and delivered diluted earnings per share of 15 cents. The revenue figure was slightly above analyst expectations of $2.76 billion, but EPS fell just shy of analysts’ forecasts of 16 cents.

The data from comScore was cited by MarketingCharts in its own report released this morning, and follows on earlier findings that the user base for subscription video services has now topped the cable TV audience, indicating a shift in how people in the U.S. are today watching television.

Netflix in April accounted for 40 percent of over-the-top viewing hours, compared with 18 percent for YouTube, 14 percent for Hulu, and 7 percent for Amazon Video. It also has the most monthly viewing days per household at 12.3 days.

But when you look at viewing behavior on a day-by-day basis, Hulu is far ahead of the pack.

On average, U.S. cord cutters are watching 2.9 hours of Hulu per day, which is ahead of Netflix (2.2 hours), YouTube (2.1 hours), and Amazon Video (2 hours).

Though MarketingCharts’ report didn’t delve deeply into why that’s the case, the primary reason is simply due to the fact that Netflix has higher penetration in the U.S.

However, the new figures may point to key differences in how consumers watch the different streaming services, too.

Netflix, for example, likely encourages more binge watching sessions, because of how it drops entire seasons of shows at once — like the recent release of Season 5 of “Orange is the New Black,” where a single event — a prison riot — is told across 13 episodes. The entire season feels like one, long story, not a dozen or so separate ones.

Meanwhile, Hulu’s partnerships enable streaming access to network and cable TV programming, which in turn has people tuning into its service on a more regular basis to see if new episodes of their favorite shows are available.

Or, in other words, Hulu is taking the place of traditional TV in the cord-cutting era, while Netflix has become associated with an entirely different style of viewing.

In fact, Netflix has been credited with the invention of this new storytelling “art form” — something that sits in between being a TV show but isn’t quite a film, either. Storytellers have adapted their content to cater to binge watchers, too, by telling these longer stories, and sometimes even crafting entire first seasons that function as the “pilot,” instead of just the first episode.

Plus, these TV stories don’t have to rely as much on things like manipulative cliff-hangers — a holdover from the network TV era where shows needed a hook to pull people back next week. Now, storytellers can instead count more on Netflix’s auto-play feature, which loads up the next episode immediately after the current one ends.

On Netflix, it takes more effort to stop watching than to keep bingeing.

The new data doesn’t definitively prove that these factors have contributed to why Netflix is capturing more viewing hours, but they likely play a role.

Netflix is looking at a possible limited theatrical run in France for its two Cannes Film Festival competition titles after protests from French exhibitors.

“We are exploring theatrical distribution of these two films in France, for a limited theatrical run, day and date with the films’ release on Netflix,” the subscription service said Wednesday.

It added: “We are thrilled to explore any and all options that will give these films an opportunity to be viewed by as large an audience as possible, on a variety of screens, because similar to French exhibitors, we want to continue to contribute to the development and financing of films.”

The French National Cinema Federation (FNCF), the lobby for the country’s cinema owners, cried foul, calling on Netflix to screen the two competition entries, the first-ever films the streamer is bringing to the Cannes lineup. The movies are Noah Baumbach’s The Meyerowitz Stories and Okjafrom Bong Joon-Ho.

Netflix produced Okja and acquired Meyerowitz Stories just three days before the Cannes lineup announcement, when it was already tipped to be in the official selection.

In an interview with The Hollywood Reporter, Cannes head Thierry Fremaux hinted that Netflix had been looking at a solution for France and would make an announcement.

Under French law, SVOD services like Netflix must wait 36 months after a film’s theatrical release to stream a film. With both movies scheduled to be released on Netflix later this year, even an announcement of theatrical releases may not satisfy the French organization.

The FNCF said that by skipping theatrical distribution, Netflix was undermining the country’s cinema funding system and that without big-screen releases, it “calls into question their nature as a cinematographic work.”

Netflix will be applying for the films to be released under the National Cinema Center’s (CNC) temporary visa classification and bills this as a compromise solution to ease the concerns of exhibitors while allowing customers to be able to view the films when they are released to the rest of the world.

The temporary visa will be careful not to trigger the 36-month waiting period allowing the film to be released day-and-date to Netflix subscribers in France.

The global streaming giant said Tuesday that it has reached a content agreement with Beijing-based video service iQiyi. The deal was revealed Tuesday during the kickoff to APOS, an industry conference held annually in Bali, Indonesia.

“China is an important market for obvious reasons; it’s also a challenging market for obvious reasons,” said Robert Roy, Netflix’s vice president of content acquisition. “Right now what we will do is look to license content into China. We closed a deal with iQiyi, which is exciting.”

“For us, it does a couple of things,” Roy added. “It gets our content distribution into the territory and builds awareness of the Netflix brand and Netflix content.”

Netflix declined to share additional details of the deal, including which Netflix originals will be hitting the China market and when. But it’s understood that the service soon will make some Netflix originals available via iQiyi day-and-date with the rest of the world.

When asked by THR if full entry into the China market was something the company was still pursuing, Roy added: “We’d love to have direct relationship in China, and it’s just a matter of when and how, and that’s something that we’re trying to figure out over time.”

iQiyi, a subsidiary of Chinese search giant Baidu, began as an advertising-supported video platform, but it is in the process of transitioning to a subscription model similar to Netflix. Video streaming is among the most fiercely contested areas of the Chinese entertainment landscape. iQiyi is believed to have the strongest subscriber base and content portfolio in the market, but its deep-pocketed rivals include Tencent Video and Youku Tudou, owned by e-commerce giant Alibaba.

Strict protectionism by Beijing regulators has prevented Netflix and Amazon from entering the huge Chinese content arena; the territory is among the handful of countries where the two U.S. streaming powerhouses are not yet active. On an earnings call late last year, Netflix CEO Reed Hastings conceded that a full China launch was unlikely in the near term, and that the company would focus on licensing for now.

Netflix achieved some early licensing success in China with House of Cards, which became a viral phenomenon through a deal with local service Sohu. The show was even known to Chinese president Xi Jinping, who once joked about it during a press event. It was later pulled from local streaming services by regulators.

About 54% of U.S. adults said they have Netflix in their household — while 53% have a DVR, according to Leichtman Research Group’s annual on-demand study. It’s the first time that households with Netflix (including those that use shared accounts) have surpassed the level of those with a DVR in the history of LRG’s studies. In 2011, according to the research firm, 44% of TV households had a DVR and 28% had Netflix.

Netflix has now eclipsed DVR usage despite the latter having a years-long head start. TiVo’s first digital video recorder shipped in 1999, while Netflix debuted its video-streaming service in 2007 and started the shift away from its DVD-by-mail business. As of the end of 2016, Netflix had 49.4 million streaming subscribers in the U.S., up 10.5% year over year. LRG president Bruce Leichtman noted that Netflix’s penetration is boosted by password sharing, with previous surveys indicating nearly 20% of Netflix customers share account access with those outside their household.

About 23% of all adults in TV homes stream Netflix daily, according to LRG’s survey of 1,211 consumers 18 and older conducted in January 2017, compared with 6% who did in 2011. Overall, 64% of respondents said they get a subscription video-on-demand service from Netflix, Amazon Prime Video, and/or Hulu.

Meanwhile, Netflix’s stock was upgraded Monday by UBS analyst Doug Mitchelson, from “neutral” to “buy,” citing subscriber momentum in Europe and Latin America as well as remarks by Comcast CEO Brian Roberts who said last week at an investor conference that in a little more than 90 days since integrating Netflix into its X1 platform, more than 30% of X1 customers are using Netflix.

Comcast’s early results with Netflix on X1 are “encouraging,” Mitchelson wrote. “We expect ongoing churn reductions as Netflix adds more U.S. pay TV integration deals and as X1 penetrations rise.” Comcast has said about half its 22.5 million video subs have X1.

All that said, traditional linear TV is not dead in the water by any means. As Leichtman pointed out, 46% of adults say they often flip through channels to see what’s on TV./p>

Clarification: This article has been updated to note that Leichtman Research Group’s study included households that use shared Netflix accounts. According to LRG, previous surveys indicate that nearly 20% of Netflix customers share passwords with those outside their household.

On Wednesday, the company released business results showing that it is on its way to reaching those targets, even as competition accelerates from services like Amazon and Hulu.

Netflix added a record 7.05 million streaming members in the three months that ended Dec. 31, up from the 5.59 million net additions in the same period of 2015. That growth, in domestic and international markets, beat its forecast of 5.2 million new members for the quarter. Netflix now has a total of 93.8 million members.

Fueling the increase in subscribers was a rapid rise in Netflix memberships abroad. The company said it is learning “how best to match content with audiences tastes around the world.” It added 5.1 million international members in the quarter, and now has 44.4 million members outside the United States, more than than 47 percent of its total membership.

Netflix cited its original series “Marvel’s Luke Cage” and “The Crown” as worldwide hits. It said it planned to invest more than $6 billion in content this year, up from $5 billion in 2016.

Profits are rising steadily. Net income increased 56 percent to $67 million in the quarter from the same period in 2015. The company projected that profits would reach $165 million in the current quarter, up from $28 million in the period a year ago.

“We don’t really believe in hockey-stick businesses, like suddenly we will turn significantly profitable at 200 million members,” Reed Hastings, the chief executive of Netflix, said during a conference call. “We think it is much smarter to grow into that bit by bit.”

Competition in streaming television is becoming more fierce and remains a big challenge for Netflix. The company, a pioneer in the market, listed a number of competitors that are encroaching on its turf, including Amazon, which recently announced a global expansion, and YouTube, which leads online video viewing time worldwide. Meanwhile, satellite television companies and traditional television outlets are pouring more resources into streaming offerings.

“In short, it’s becoming an internet TV world, which presents both challenges and opportunities for Netflix as we strive to earn screen time,” Netflix said in a letter to shareholders.

Netflix’s stock price is typically volatile on days when the company reports earnings, and Wednesday was no exception. The earnings report sent shares up about 8 percent in after-hours trading. Netflix shares rose about 8 percent for all of 2016, after having surged 135 percent for 2015, as the top performer on the Standard & Poor’s 500-stock index.

The company predicted that subscriptions would continue to grow in the current quarter, although slower than in the period last year. It forecast that it would add 5.2 million members, 1.5 million of them in the United States and 3.7 million abroad. It attributed the slowdown to tough comparisons from the same period last year, particularly with the introduction of the service in 130 countries last January.

The quarter was the 10th anniversary of Netflix’s streaming service, which began with the vision that internet television would ultimately replace traditional television. But even as Netflix reported its biggest net addition of streaming members in its history, Mr. Hastings was not satisfied standing still. Asked about his ultimate vision for the company during the conference call, he said, “You never want to characterize something as an ultimate vision, because when you get there, there is always more you want to do.”

“Think of us as just continuing to iterate on the basic cycle of more content and better product, that combines at a great service at a great price,” he said. “Hopefully, with that we can attract many more people to join Netflix, and then that fuels the whole cycle. So we are just going to lather, rinse, repeat again and again for the next couple of years.”

Up until now, Netflix users on a long flight without internet access who hankered for a Netflix binge were out of luck. Ditto if they were somewhere like the subway or areas that just don’t have good broadband access. Rivals Vudu and Amazon Instant Video have ways to watch some shows offline after download, as do pay TV operators Comcast and Dish (via its HopperGO portable video device).

But back in 2014, Netflix indicated in an interview with TechRadar that offline viewing wasn’t part of its plans. However, according to some reports and rumors that thinking shifted earlier this year, and finally on Wednesday Netflix revealed it’s offering a way to download some of its shows and movies and then watch them later without internet access, at no extra cost. The new feature is included in all plans and available for phones and tablets on Android and iOS, according to the company.

“Many of your favorite streaming series and movies are already available for download, with more on the way, so there is plenty of content available for those times when you are offline,” Netflix reports in a blog. “For example, ‘Orange is The New Black,’ ‘Narcos’ and ‘The Crown’ are available for download today.”

The world’s largest video streaming service, Netflix, announced a new partnership today with movie chain iPic Entertainment that will bring new Netflix movies to local cinemas across the country.

And the theaters showing the Netflix movies are anything but ordinary.

Premium customers can enjoy first-class style seats that recline into flat beds, five star food and dining, and unlimited free popcorn.

The movie theater chain, iPic, operates 15 locations across the country, including New York, Los Angeles, Houston, and Austin.

IMAX Shift in Brooklyn, New York, has debuted a group cycling studio in front of a large IMAX projection screen, giving the rider a cinematic experience while working out.

“We are very excited to announce this significant game changer for consumers and fans, paving way for a new frontier in shared experience viewing of Netflix entertainment,” says Hamid Hashemi, President and CEO of iPic Entertainment.

Netflix’s new film "The Siege of Jadotville" starring Jamie Dornan (Fifty Shades of Grey) will be the first to debut on the big screen.

.A full 61% of American internet users subscribe to streaming video on demand (SVOD) -- far more than people in other countries. There are many local Netflix competitors around the world, but only 11% of French people, for example, subscribe to an SVOD service, according to a recent survey by Futuresource Consulting as highlighted by eMarketer.

Is such low penetration in international markets a sign of the huge opportunity ahead for Netflix, or is it an indication that demand for its product isn’t as great in markets outside of the United States?

The real competition in Europe

Streaming video on demand may not have caught on as much in European countries like France (11%), Germany (30%), and the U.K. (33%) because pay-TV operators are offering their own over-the-top services. As of the end of 2013, almost all of Europe’s broadcasters had developed their own online streaming service for catch-up viewing. Pay-TV operators also run their own platforms for on-demand viewing.

“In Europe we have seen pay-TV operators’ own services becoming increasingly strong and well-programmed,” Richard Broughton, a research director with Ampere Analysis in London told Bloomberg.

After seeing the impact Netflix had on traditional TV distributors in America, many operators in foreign markets wised up. As a result, not only do they have a better competing product with regard to streaming video, networks have strategically held back content from services like Netflix.

As a result, the SVOD services in Europe simply aren’t as good as Netflix in America. That includes Netflix itself, which doesn’t have the same rights in other countries as it does in the United States, and its local programming in some countries is lacking.

International growth isn’t there yet

Netflix can’t just waltz into a new market and expect to grow extremely popular. It needs its product to be just as compelling as it is in the United States.

While Netflix saw exceptional growth in international markets during the first quarter, adding 4.5 million subscribers, it was largely due to pent-up demand and free trials.

International subscriber growth fell to 1.5 million in the second quarter, down from 2.4 million the year before despite the more than 130 new markets it added since then. That number reflects higher churn from the influx of free trials in the first quarter and a price increase in more established markets.

Moreover, management expects to add just another 2 million international subscribers this quarter, down from 2.7 million last year.

What Netflix has to do to win Europe

What Netflix has to do in order to accelerate its growth internationally is to establish a better product than currently exists. That’ll be more difficult than it was in the United States, since it’s facing more competition and its suppliers -- television networks -- are warier of Netflix than they were just five years ago.

To that end, Netflix is investing in original programming in more than a dozen countries including Germany, Spain, Italy, Korea, Japan, France, Brazil, and Cambodia, according to Chief Content Officer Ted Sarandos. But Netflix is being selective in the foreign-language original projects it pursues.

Broadly speaking, Netflix says it doesn’t “plan on trying to outcompete local TV networks in local content in every nation of the world.” Instead, it will rely on English-language content in most countries. To its credit, Netflix does offer dubbed versions of its English-language originals.

Netflix’s international appeal will likely be limited by its willingness to spend on local content. The good news for investors is that’s a factor that’s mostly within management’s control, so if it makes economic sense to invest in a new market, Netflix will pursue that opportunity.

With the relatively low penetration of SVOD services in international markets, Netflix still has a big opportunity to make an impact.

Wall Street has chimed in on the significance of a multiyear worldwide deal between John Malone’s Liberty Global and Netflix that will see the international cable giant integrate the latter’s service in more than 30 countries across Europe and Latin America.

The partnership follows the successful U.K. launch of Netflix on Liberty Global-owned cable giant Virgin Media in 2013, which marked Netflix’s first integration of its streaming subscription VOD service into a pay TV offering. Netflix has since launched in most countries of the world.

Morgan Stanley analyst Benjamin Swinburne in his report’s title summarized the deal this way: “Liberty Global Distribution a Nice Addition.”

He wrote: “It is no secret that recent European launches by Netflix have been slower than earlier waves. To that end, expanding Netflix integration from Liberty’s U.K. footprint to its about 24 million-25 million global video footprint is a long-term positive to growth.”

Discussing the size of the opportunity, the analyst wrote: “We estimate that the immediately (next 12 months) addressable subscriber base for Liberty’s Netflix set-top box integration is approximately 3.5 million-4 million next-gen video subs outside of the U.K.”

Swinburne added: “Liberty’s footprint in Germany, Belgium and Switzerland are likely to be the most important markets near-term, given Netflix’s lower broadband household penetration in those countries. In particular, Liberty has about 6.5 million video subscribers in Germany, which has not ramped as quickly as earlier wave European markets for Netflix, so the vast majority of those customers are not Netflix households today. … We think set-top integration, including co-marketing and promotional plans and reducing friction for usage, have proven very helpful in many international markets.”

Swinburne concluded the broader takeaway from the deal, saying: “From foe to friend, big cable is embracing Netflix, OTT.” He added: “We expect Netflix integration in the U.S. with Comcast, likely by year-end, on its next-gen service X1, and ultimately Charter as well.”

Drexel Hamilton analyst Tony Wible called the Netflix-Liberty Global agreement “a big deal” for the same reason. “The deal is more important as its signifies a shift in [pay TV operator] focus, changes the competitive advantages for other [pay TV companies] and perpetuates a vicious cycle for TV networks that will help Netflix over the long run,” he wrote. “We increasingly see some of Netflix’s competitors becoming distribution partners.”

The most underappreciated aspect of the integration deal may be the effects on viewing, Wible suggested. “We see Netflix use spiking in integrated homes as its content becomes more accessible. This would hurt TV ratings, pressure ad revenue and perpetuate the vicious cycle that helps propel Netflix’s business. The weaker TV networks become, the less they have to pay for content and the more dependent they are on Netflix for monetization. It also pushes more consumers to cut/shave the cord (more discretionary money for Netflix) and incentivizes [pay TV operators] to emphasize their data business.”

FBR analyst Barton Crockett addressed whether the news would boost Netflix’s stock price. “Our main caveat is that this kind of news is arguably already embedded in a stock that is expected to be adding over 10 million new subs internationally per year,” he wrote.

Not many months ago, an original series landed on Netflix to some critical acclaim. Viewership, of course, was a mystery, but the launch seemed to make some noise. Yet the show’s creator — hardly a no-name player — began to fret. There had been no congratulatory call nor even an email from anyone at Netflix.

That’s a far cry from the way relationships long have been managed in Hollywood, but sources who do business with the streaming service say the silence was not atypical. “Really celebrating or valuing some of their successes — they just don’t do that,” says one agent.

Still, at a time when business is tough all over in the entertainment industry, there is a lot of gratitude for a deep-pocketed buyer that is snapping up an array of material, much of which might not find a home elsewhere. Netflix and its chief content officer Ted Sarandos are at once a savior, offering a giant gush of money to license shows that in some cases were past their prime or even out of production, and a terrifying competitor to studios.

The SVoD service’s second stage of growth is built around a constant refresh of its TV catalogue, with original commissions and high-profile acquisitions replacing older titles.

Exclusive data, provided by research firm Ampere Analysis, reveals that Netflix refreshed an average of 10.6% of its titles each month between July 2015 and March 2016. That rate jumped to 13% of programmes in April 2016.

This turnover comes alongside a huge cull in titles more than two years old. Netflix UK cut its catalogue by 490 TV and film titles from December 2015 to June 2016, from 2,502 to 2,012.

This echoes similar moves in the US, where the firm reduced the total number TV shows on offer from 1,609 in January 2014 to 1,197 in March 2016. It has also reduced its libraries in France and Germany.

Netflix previously relied heavily on geographic expansion for overall growth, but is now changing its content strategy to counter slowing subscriber take-up — it added a below-forecast 160,000 new subs in the US and 1.52 million around the world in its last financial quarter.

Ampere Analysis research director Guy Bisson says: “That road has run out. Netflix must now focus on refining its offer and profile in order to sustain growth within each market, rather than looking to new ones.”

This refinement process has been helped by a ballooning number of original commissions, including the Winona Ryder-fronted horror series Stranger Things, Baz Luhrmann hip hop drama The Get Down and Judd Apatow rom-com Love.

Globally, it has grown its originals, which also include feature films from Ricky Gervais and Adam Sandler and docs such as sports series Last Chance U, from 633 hours in December 2015 to 863 hours in May 2016 — a 36% rise in five months.

Its originals are going to become even more relevant to a UK audience later this year with the launch of Left Bank’s The Crown.

Despite this originals boom, Netflix still relies on thousands of hours of acquired programming. Shows made in-house by the BBC, such as The Wrong Mans, Luther and Life, account for 3% of the service in the UK, making the division now known as BBC Studios its seventh biggest supplier in the UK.

BBC Studios sits below US giants, including Spongebob Squarepants producer Viacom and Better Call Saul producer Sony, and the top 10 producers account for more than a third of titles across Netflix ‘s UK catalogue.

While the BBC is a significantly bigger supplier to Netflix UK than any of its domestic rivals, another 7% of the SVoD service’s UK library is produced here, taking the total to 10%.

Meanwhile, Netflix has been prioritising global acquisition deals such as its purchase of CBS’s digital reboot of Star Trek and Constantin Film’s The Shadowhunters: The Mortal Instruments.

Earlier this year, Netflix chief creative officer Ted Sarandos said that “every year the exclusions of different countries in our licensing agreements will become less and less”.

However, this has not quite happened on a large scale. “There’s definitely evidence that, when it comes to acquired content, global deals are limited,” says Bisson. “Netflix ‘s global rollout earlier this year relied heavily on its own productions and the few high-profile global acquisitions it had made.”

Whereas many traditional television execs initially pegged Netflix as a platform or operator, Bisson says it is better characterised as a channel, albeit one without a linear schedule.

He compares its global rollout to US cable networks such as MTV or Discovery, which initially launched internationally with older catalogue content. “As local expectations matured, they localised and developed their offers and began to invest in original content,” he says. “What we are seeing now is a natural progression of a strategy that is genetically identical to any channel business.”

Netflix, a company that is built on data algorithms, will continue to evolve as it becomes more of a mainstream mover.

“With the access to customer data that Netflix has, it is able to continually tweak its production and acquisition strategy down to a single-country level,” adds Bisson.

The average Netflix UK subscriber is aged between 18 and 34 and pays for a multitude of contract-free online services, with a large proportion having young children.

Ampere Analysis data shows that of the SVoD giant’s 6.1 million UK subscribers, more than 3.3 million (55%) are aged between 18 and 34.

This is significantly higher than the 37% of internet users in the UK who sit in that age bracket.

Netflix users also watch much less linear television than the UK average. Time spent binge-watching episodes of House Of Cards, Arrested Development and Orange Is The New Black means that this group are likely to watch 15% less linear TV — a blow to terrestrial broadcasters looking to snag lucrative millennial eyeballs.

Kids’ content

More than a quarter of Netflix’s customers have young children who are increasingly comfortable finding their favourite episodes of Peppa Pig, Horrid Henry and Fireman Sam on their parents’ tablets.

Some 12% of Netflix’s UK catalogue, which includes 546 original TV shows and 2,173 movies, is kids’ content, with classic titles such as Danger Mouse and Japanese cartoon Glitter Force among its most popular. Netflix chief content officer Ted Sarandos said earlier this year that it would “double down on kids and families”.

In addition to acquiring more high-profile, first-run family-friendly content, it plans to increase its original kids’ commissions from 15 to 35 by the end of 2016.

Ampere Analysis research director Guy Bisson says that parents with young kids are a “key driver” for “next-generation” services such as Netflix. “Content connoisseurs represent the future of TV because nearly every defining characteristic of the way they engage with entertainment favours the new over the old,” he adds.

Netflix’s tech-savvy young audience is, as expected, app-friendly. Some 18% of Netflix subscribers watch video content on Facebook, while 11% watch on Snapchat.

However, the average Netflix viewer is digitally promiscuous. They are more likely to pay for other subscription services, with Now TV’s flexible sports pass, Disney Life and Spotify the most popular.

They are also more likely than non-Netflix subs to have pay-TV and, perhaps most surprisingly, more likely to subscribe to Netflix rival Amazon Prime Instant Video.

“The typical Netflix customer is not looking solely to Netflix to fulfill all of their content needs. Increasingly, it will be important for the industry to think of Netflix as one element of an overall home-content offer. Netflix and SVoD customers in general, frequently buy multiple OTT video services, make copious use of free catch-up from the major broadcasters and bundle in streaming music services,” says Bisson.

“At the moment, Netflix has 79.9 million total paying subscribers,” Irina Kornilova, senior analyst at IHS Technology, reports. “By 2018, international subscribers will overtake the number of subscribers in the U.S. for the first time, and by 2020, Netflix will have 75 million international subscribers.”

The research firm says the total number of Netflix subscribers grew 30 percent between 2014 and 2015 and forecasts it to bloom 21 percent in 2016 as territorial expansion reaches its peak. By 2018, IHS predicts Netflix will cruise past the 100 million-subscriber mark. The number of Netflix International paying subscribers should grow 38 percent in 2016, with more than 2.8 million of these new paying subscribers coming from the new markets that Netflix launched in at the beginning of this year, IHS says.

By 2020, Netflix global revenues are expected to reach $13 billion, according to IHS forecasts, with 53 percent accounted for by Netflix International markets. Domestic streaming revenues are expected to hit $6.2 billion by 2020, and international revenues to reach $7 billion.

Western Europe, with strong U.K. (more than 6 million subscribers by the end of 2016), Netherlands and Nordic (5.4 million subscribers combined) markets, will be the leading region for Netflix outside the domestic US subscriber base, an IHS report says. Germany, despite strong competition from Amazon Prime and free TV, is expected to reach 2.2 million paying subscribers by the end of 2020.

The research firm also expects Poland and Turkey to help drive further uptake in the Central Europe region, but the effect of the localization will not be felt immediately, IHS Technology says.

“With the worldwide launch, Netflix has launched a platform upon which it can build and differentiate the service to fit specifics of every region in the future,” Kornilova notes. “Netflix is starting this localization process in Poland and Turkey this year. Subscribers in these countries can expect an addition of local languages to the user interface, subtitles and dubbing of content. This will help drive new subscriber numbers dramatically.”

Netflix will continue with localization and development of new territories through 2017 and 2018. As a result the new territories are forecast to grow their paying membership base by 133 percent and 62 percent in 2017 and 2018, respectively. By 2020, IHS expects subscribers in countries rolled out in 2016 will represent a quarter of all international subscribers, reaching 19 million.

Reviews are currently mixed across the web about how cool the VR trailer actually is, but the sci-fi horror promo bringing a scary 1980s Indiana to virtual life could indicate an interesting move for Netflix as it dips its toe into the VR arena.

You can view the clip here.

“We are growing, but not as fast as we would like or have been. Disrupting a big market can be bumpy, but the opportunity ahead is as big as ever and we continue to improve every aspect of our business,” the letter to shareholders reads.

As for Q3, Netflix name-checked Comcast as causing a potential impact from the Rio Olympics, on par with what was experienced for the Games four years ago. For Q3, Netflix is forecasting U.S. net adds of 0.3 million. “We expect U.S. contribution margin to improve year over year in both Q3 and Q4 and we anticipate meeting our 40 percent U.S. contribution margin target by 2020, or even earlier,” it says.

Trying to stay on the sunnier side, Netflix pointed out it has partnered with more 40 MVPDs across the world to make it easier for consumers get Netflix, including recent news about Netflix being available via the Comcast X1 set-top box later this year.

Netflix concluded the letter with optimistic predictions: “We are in the very early days of the shift from linear television to on-demand viewing and there are nearly 1 billion pay TV subscribers worldwide who will migrate to Internet TV over the coming decades.”

“Comcast and Netflix have reached an agreement to incorporate Netflix into X1, providing seamless access to the great content offered by both companies,” a joint statement from both companies splashed across the internet said yesterday (and first reported by Recode). “We have much work to do before the service will be available to consumers later this year. We’ll provide more details at that time.”

Comcast is now among the many pay TV operators buddying up with OTT providers to make things more seamless for cable subscribers. Netflix gets access to more customers, and Comcast subs won’t have to search as hard across platforms for content.

“From open internet to interconnection policies, we advocated for a foundation that enables over-the-top content and traditional video to grow together, rather than apart,” Chip Pickering, CEO of INCOMPAS comments. “These smart policies, led and adopted by the FCC, have been hard fought victories that have knocked down many walls and are good for competition, consumers and free markets. We encourage and support policies that help make search, discovery and access to all over-the-top content easier.”

About 27 million of Netflix’s U.S. streaming subs have either been subject to the price increase to $9.99 per month for the most popular two-stream HD plan, or will see it later this year, according to Nomura Securities analyst Anthony DiClemente. The price hikes could result in 480,000 customers cancelling their service, he estimated — while at the same time leading to about $520 million in additional annual revenue for Netflix.

“We note that this has long been a tenet of our investment thesis on the domestic business, as slowing subscriber trends are more than offset by increased monetization,” DiClemente wrote in a research note Monday. The analyst arrived at the estimates by assuming a 2% churn rate for subscribers on the receiving end of a $2-per-month price increase and a 1% churn rate for those whose plan would go up by $1.

Netflix ended the first quarter of 2016 with 81.5 million streaming subscribers worldwide, including 47 million in the States.

Netflix Standard Plan Rising to $10 for All Subs Starting in May

In the U.S., Netflix in May began raising the price of the standard HD service for those previously paying $7.99 monthly by $2, to $9.99 per month. Customers who signed up for the HD plan at $8.99 following the May 2014 price increase will be rolled over to $9.99 in October. Alternatively, the affected customers will have the option of continuing at $7.99 for a single-stream, standard-definition plan.

The company has told investors that it expects “modestly increased churn” because of the price changes this year, and said the higher subscriber fees will let it boost content spending — projecting that to rise from $5 billion this year to more than $6 billion in 2017 on a profit/loss basis.

“We will phase out this grandfathering gradually over the remainder of 2016, with our longest�-tenured members getting the longest benefit,” Netflix CEO Reed Hastings wrote in a the quarterly letter shareholders in April. “We are rolling this out slowly over the year, rather than mostly in May, so we can learn as we go.”

On Monday, DiClemente cut his price target on Netflix’s share price, from $125 to $115 per share, after reducing Nomura’s estimates for international subscriber growth in the second half of 2016. The analyst lowered his estimate for net new international subscribers to 2.35 million (down from 2.87 million) for Q3 and to 3.23 million (down from 4.04 million) for Q4.

“Thematically, international net subscriber additions headwinds may be somewhat offset by a better narrative surrounding revenue benefits from price increases in the U.S. throughout the remainder of 2016,” DiClemente wrote.

Netflix is scheduled to report Q2 earnings on July 18 after market close. For the second quarter of 2016, which is historically weak for the company, Netflix in April said it expects to add 500,000 subs in the U.S. and 2.0 million internationally; analysts are now forecasting net adds of 520,000 U.S. subscribers and 2.1 million overseas in Q2.

Netflix and other internet companies have made major inroads in the television industry worldwide, disrupting business models and keeping old media companies up at night with their direct-to-customer online video offerings.

But old TV can resist the Netflix attack, according to Christoph Mainusch, CEO of Central Europe Media Enterprises, the largest broadcaster in Central and Eastern Europe.

In his keynote address opening the 2016 NEM media conference in Dubrovnik, Croatia on Tuesday, Mainusch told the audience to not believe that hype.

“Linear TV is stronger than ever! 90 percent of TV viewing (in Central and Eastern Europe) is still linear!” Mainusch said, pointing to figures that show that traditional TV players have so far been the winners in the digital revolution.

He noted that in the six Eastern European countries where CME operates, total TV usage has actually gone up in the past 10 years, to 244 minutes a day, from 216 minutes, a 13 percent jump. Pay TV penetration of CME channels has gone up from 39 percent to 65 percent over the same period. CME’s share of the total advertising spend in its region has also increased, from 48 percent in 2005 to 54 percent in 2015. The increase in online revenue, he said, has come at the expense of print advertising, not TV.

Eastern European channels have, so far, been able to resist Netflix & Co. because they are still relatively cheap and because they offer local content the local audience wants, Mainusch argued.

It’s true that while Netflix and Amazon have invested heavily in big Western European territories — financing series such as Marseille, The Crownand Black Mirror(Netflix); or Peaky Blindersand car show The Grand Tour (Amazon) — they have not made similar local investments in the less lucrative markets of Eastern Europe.

Mainusch sees a window of opportunity for big regional players to diversify the business and establish online and on-demand offerings before the big boys truly arrive in force.

“If we don’t offer these (online and on-demand) services, the consumer will turn somewhere else to get it,” he said. “You have to fragment yourself before the others do it for you.”

He noted that in the Czech Republic, CME’s largest TV market, the number of channels has almost doubled in the past 10 years. But because the main three TV networks successfully fragmented themselves, starting up their own new free and pay-TV channels, they have kept more than 90 percent of their total audience.

Going forward, Mainusch predicted the battle will be for top live content — particularly sports rights —which have proved to be a strong driver of audience figures even in a fragmented market, such as the huge ratings traditional TV networks have garnered for the Euro 2016 soccer championships, which kicked off on Friday.

DEADLINE: I have covered festivals like Sundance and Cannes, and the markets, for material for a long time, and the biggest disruption has been how companies like Netflix and Amazon have supplanted studios as the main buyers of big properties.

SARANDOS: We’re not the same.

DEADLINE: These are different mousetraps for sure, but among other films this Cannes, they took the backers of Woody Allen’s film out of a risk position, then found a distributor and put it on Amazon’s service.

SARANDOS: They put themselves in the place of Sony Pictures Classics. That’s not really a disruption, as much as it is a replacement. What I’m trying to do is take the benefits and the beautiful byproduct of the internet, which is all about consumer choice, and apply it to movies where no one else has. The theatrical movie window is the only window that really still exists. Every other form of entertainment is pretty much available to consumers where and when they want it. Perpetuating the movie window—adding new money to perpetuate the old system—I don’t think is really that interesting.

DEADLINE: There are clear distinctions, but much like Screening Room, you are all disruptors trying to find niches in a changing landscape.

SARANDOS: If Screening Room happened, that would be real disruption. I love those guys [at Amazon] by the way. Bob Berney did one of our first streaming deals, for a Susanne Bier movie called The Heartbeat. That was disruption back then, almost nine years ago, to take a movie and open it on Netflix. That was really bold back then.

DEADLINE: DEADLINE: It doesn’t seem that long ago we were all putting DVDs in red envelopes and mailing them back and forth to Netflix. Blockbuster had all these brick and mortar outlets, and you proved they weren’t necessary. Back then, how much of your current business was a realistic goal, where you would be financing star caliber movies and TV series for members around the world?

SARANDOS: I met Reed Hastings in 1999 and our discussions then were about Netflix, almost exactly like it is now. Except it was downloading. That’s why he didn’t call it DVDflix or DVDmail or Mailflix or anything like that. The eventuality was all about the content, that every piece of film entertainment would come into the home by the internet. That was Reed’s belief in 1999. That week that I met him, my first internet transaction was to buy that plane ticket, and that week someone emailed me a video clip of South Park. It felt like it took a month to open, so it didn’t seem to me that this was the common belief. It was a pretty bold abstract, and he was 100% that Netflix would be a pure digital company. If he was wrong about anything, it was that we’d still be shipping DVDs in 2016.

But the key was the global platform, the idea that physical distribution is fragmented out of necessity and that the internet would remove that necessity because it’s a form of distribution that doesn’t need to be fragmented. There’s no physical supply chain. So the idea that you could do something on a global platform was impossible then and more than possible right now—and the norm. Netflix now, we’re in every country in the world except for Syria, North Korea and China. When we launch our movies and TV shows, we launch them everywhere at the same second. When we buy a movie at Sundance, it’s available to the whole world. SARANDOS: Perhaps the most disruptive thing you’ve done so far was commit $90 million toBright, the David Ayer-directed Max Landis-scripted film that stars Will Smith and Joel Edgerton. Studio execs groused and said they need to turn a profit on each movie and couldn’t spend that much; they said your concern was Netflix’s Wall Street valuation so you can overspend. How does Bright serve your model?

SARANDOS: We don’t spend any time talking about Wall Street when we do content acquisition deals. It serves our model probably in the same way it does to make a season of House of Cards. It’s about making content that people love, value and associate their Netflix membership with. So when they say, “I’m a subscriber to Netflix because I loveOrange is the New Black,” or, “I can’t wait to see The Crown,” they know they can’t do it anywhere else. Movies, it’s tough to have the same economics because it’s two hours of watching instead of 13 hours. But Bright is a movie that they would have seen in the theater, yet because they’re Netflix members they get to watch it whenever they want, wherever they want, at the same moment. There’s no window, no waiting. The producers will make money, and they chose this over the other models. They didn’t do it because they had a point to prove or they had any interest in Netflix’s value market gap. They did it because this was a more profitable way to make and release movies. Our first ambition is that it becomes like a major studio slate.

DEADLINE: And you want to be in on these movies really before they go into production, not on an acquisition?

SARANDOS: By the time they get into production they’ve sold off territories.That doesn’t work for us. We want to be global with the films. That isn’t to say we don’t buy individual territories—we do opportunistically—but for the most part our original features initiative is about hitting the globe and improving distribution. So when I say I think about it as a slate, I think about it both in volume and scope from a couple of tentpoles, some nice films in the middle, and some great independent.

DEADLINE: How are directors taking to the idea of streaming over theatrical?

SARANDOS: It’s funny. A lot of directors will come in and they will talk about the movies that they saw, and these are the movies that influenced them and made them want to be a filmmaker, and in almost every case they watched them at home on a VHS tape. There’s a romantic notion about the film being on a big screen. There’s definitely something about a premiere at Eccles that you can’t replicate—that I can’t replicate—but the fact is, that happens for a couple hundred people once a year. We’re doing it every day for the world. People who are discovering a movie that might change their life; that’s who they’re talking to. We have to get rid of the romantic part. I don’t really think that they’re mutually exclusive. I think over time that these films will get booked into theaters at the same time they’re on Netflix.

DEADLINE: As you continue to evolve, how important is re-upping your content deals with the likes of Miramax and TWC? The old films versus the original films you’ll make.

SARANDOS: We said in the US, which is a meaningful part of our business, we have output deals. The Disney deal starts this year and the Weinstein deal starts the end of the year, and those will be our output deals. In the last round of renewals, we weren’t even bidders, and we won’t be bidders in future single-territory output deals. What I’m really excited about is our original films that we’re producing. The ability to buy the pay-TV window worldwide like we did with The Big Short, so that movie will be available with a slightly accelerated window, but available the same time around the world. I think that we can be involved in business that will accelerate the windows and line up geographies over time to complement the original features as they roll out, and also beyond those we’re also doing the festival pick ups and preemptive buys; pre-festival, when movies are in the development stage.

DEADLINE: How important are those to you? Like for instance The Birth of a Nation, where you came in with a superior bid but they chose to go the Searchlight route.

SARANDOS: I think Nate [Parker] is a tremendous talent. That’s a very important movie. We had a very aggressive bid on the table and we just had a differing view of the kind of movie it was. I think there are people that think a movie is not a movie unless it’s in the theater, and there’s a generation just behind us that thinks it’s not a movie unless they can stream it. With that movie it was very important to reach young audiences, too.

DEADLINE: What have been the big lessons you’ve learned along the way with all of this?

SARANDOS: I just feel like everything is such a work in progress, and every day there’s big setbacks and big triumphs. You just have to take them all in balance. What’s cool is we can bring a global footprint to local storytellers like nobody else. In the past, somebody said that, because we’re doing so much original content, we were going to run out of writers. And I said, “If you think the only writers are in America, then yeah.” You might run out of writers in America, but the world is full of great writers and great storytellers.

Netflix plans to have close to 600 hours of UltraHD 4K content availability by the end of this year, according to a press release announcing the content additions.

“As the cost of 4K TVs continues to decrease, consumer adoption of and interest in Ultra HD technology becomes more widespread,” said Vivek Khemka, DISH executive vice president and CTO in the press release. “We’re making every effort to provide our Hopper 3 customers with additional access to 4K programming as it’s made available.”

DISH already features a Netflix channel and subscribers can access Netflix content through the program guide, or through search results. They can also access Netflix through an app on the Home screen of their Hopper 3 user interface. UltraHD 4K content will be designated through a 4K or UHD icon.

Netflix recommends at least a 25 Mbps home Internet connection to view 4K content. Viewing of 4K content also requires a 4K compatible TV and a $11.99 monthly subscription applies for Netflix.

Market research firm IHS recently predicted 4K TV penetration will reach one-third of U.S. households by 2019. DirecTV is launching 4K content as well.

Starting in May, the No. 1 streaming service’s standard HD service for those previously paying $7.99 monthly will increase by $2, based on member billing periods. Customers who signed up for the HD plan at $8.99 following the May 2014 price increase will be rolled over to $9.99 this October.

“Impacted members will be clearly notified by email and within the service so that they have time to decide which plan/price point works best for them,” Netflix said in a statement.

Later in April, Netflix customers in the U.K. will begin to be “ungrandfathered” from previous pricing plans, and will be charged �7.49 per month (currently about $10.57) for the two-stream HD service.

Netflix previously announced that starting in the second quarter of 2016, a “substantial number” of U.S. subs will see the price hike. They will have the option of continuing at $7.99 for a single-stream, standard-definition plan, or keep the HD service for $9.99 a month.

“Given these members have been with us at least two years, we expect only slightly elevated churn,” Netflix CEO Reed Hastings and CFO David Wells wrote in a letter to shareholders in January.

In October, Netflix boosted the price of the two-stream HD plan to $10 for new members in the U.S., Canada and Latin America. Even at $9.99, Netflix’s standard plan is cheaper than Hulu’s commercial-free subscription tier ($11.99 per month), as well as HBO Now ($14.99) and Showtime’s over-the-top service ($10.99).

Netflix also has offered an $11.99-per-month plan that provides up to four simultaneous HD streams since 2013.

About 17 million Netflix subscribers will be affected by the HD plan price hike that commences in May, according to UBS analyst Doug Mitchelson. But the firm’s research indicates Netflix “has strong pricing power” and “We believe incremental price increase churn will be low (3%-4% of the cohort over 2Q/3Q),” Mitchelson wrote in a research note earlier this week.

Netflix ended 2015 with 74.76 million streaming customers worldwide, including 44.74 million in the U.S.

In the first quarter of 2016, the company expects to add a net 4.35 million international subs and 1.76 million in the U.S. UBS’ estimates are in line with those forecasts, projecting 1.75 million U.S. net adds and 4.35 million overseas. For Q2, the firm projects 450,000 total net U.S. subscriber additions and 2.9 million net adds internationally.

While 41% of respondents in UBS’ November 2015 survey said they were not willing to accept any price increase for Netflix, Mitchelson expects churn to be relatively low given customer loyalty and the relatively modest $2 increase. “Consider pay TV costs have been rising 3%-5% annually and the industry is now losing only ~1% of customers each year, relative to 68% of pay TV customers in our survey indicating no tolerance for price increases,” the analyst noted.

Netflix is scheduled to release Q1 earnings results on April 18 after market close.

Had you invested in the business in the depths of The Great Recession of 2008 and held until today, your stake would be up more than 20x your initial investment (a venture capital-worthy return that happened in the public markets). In that period, the company outperformed the NASDAQ as a whole by more than 12x. Just astounding.

But as tremendous as their financial performance has been, what’s equally as impressive has been the boldness and consistency of their product execution.

The achievements include: (1) navigating the transition from their initially revolutionary analog DVD rental business to a digital subscription (rememberQwikster?); (2) breaking device and platform silos to offer its content as one of the first true web services; (3) pioneering the concept of quality “original content,” driving consumer satisfaction, stickiness, defensibility, and stronger long-term operating margins; (4) pushing consumers expectations of what streaming video fidelity…

While it’s catalogue often still is missing the specific movie that you’re looking for, the company has clearly established itself as a fountain of consistent entertainment and a partner to those looking for a cozy lean back experience (75 million of them!).

So when Netflix announced its plans at CES in January to expand to an additional 130 countries overnight, you’d expect that people all over the world would have been celebrating in the streets.

A recent story, however, on NPR called “Is Netflix Chill? Kenyan Authorities Threaten To Ban The Streaming Site” got me to see the company in a different light. The piece describes the reactions of Kenyan consumers and local entertainment industry.

Local consumers, on one hand, appeared overjoyed. For years, they have been finding clever hacks to tap into “sugar bowl” of Netflix-style content. But the site’s formal domestic launch took the hassle out of access, and allowed locals to feel like participants in the global media community conversation.

On the other hand, those?—?like actors, directors, and producers?—?with hands in the creative process of making local content were up in arms. They fear that Netflix’s content, capital, technology, and product are so strong, that they will locally not be able to compete for domestic consumer interest. And as such, the indigenous stories and sensibilities will struggle to survive.

There is truth to both sides here.

Entertainment is one of America’s largest global exports. Maybe that’s because we are a nation of immigrants, and so are maximally relatable. Maybe it stems from something aspirational about the stories we tell. But no matter the reason, it’s clear that Netflix is a crucial new piece of infrastructure, paving the way for the migration of our talent and stores.

To the extent that local businesses are economically suboptimal mechanisms for global storytelling, as painful as the transition may be, I support the market efficiency Netflix facilitates. If local creatives can partner with Netflix to develop and distribute their content, and do so more cheaply and effectively, that’s great.

I fear, however, that the first content to be successful locally on the Netflix platform will be non-local content, capturing imagination and attention.

These are existing shows like Narcos, House of Cards, and Orange is the New Black. While this might be the most profit-maximizing strategy for Netflix, as it continues to pour billions into original content, I very much hope that the company reaches into the local countries and cultures it touches to bring out their own stories.

While internet connects us and unites us, it also has the potential to facilitate a kind of imperialism and monoculture.

Beyond Netflix, as companies like Facebook, Twitter, and even Medium continue to go global, they should work to preserve the unique local flavors that make the world a truly interesting place to explore.

You too can watch the latest releases on your TV at home, but only if you can pay a hefty $35,000 for the privilege of having a Netflix Prima Cinema TV box sitting next to your big screen TV.

Netflix is well known for its initiatives in attracting new customers, and this particular offering will definitely draw the richer crowd.

Many of us prefer not to go to the theater to see the latest releases. What with the crowds of people, the long queues to get a ticket, the knees prodding the back of your seat and that tall person sitting directly in front of you, it can be an annoying experience. Add to that the overpriced popcorn, soda drinks and candy, as well as the ticket price and it’s not exactly a cheap form of entertainment.

With services like Netflix giving you a video library right at your fingertips, often it is worth the wait to see the latest films at home and in comfort. The ability to pause while you head to the bathroom or to the kitchen to prepare snacks makes it even better.

However, having seen the theatrical trailers, many of us can’t wait to see the latest releases, and now the facility is in place to watch those movies at the time they hit the theaters with the Netflix Prima Cinema movie player.

To the average person, the $500 price tag per film would make the expensive popcorn worthwhile, but to those who can afford to buy the box at $35,000 and cough up the necessary $500 for each movie they watch, this is no problem at all.

Reportedly, you can only buy the Netflix Prima Cinema TV box through an authorized dealer, and according to the International Business Times, to ensure full security, you will need to scan your fingerprint into that box every time you want to download and watch one of the latest releases.

Netflix boasts that the new service offers a video quality “twice the sharpness of Blu-Ray,” as well as uncompressed, cinema-quality surround sound. They are also planning on offering Dolby support and 4K formats in the future.

According to Prima Cinema, the company behind the box on offer from Netflix, it was created as an alternative to the exclusive Hollywood film clubs, where members get to watch the latest theater released films at home (these clubs include A-list celebrities and movie industry insiders as their members). However, the common, every day movie lover will be hard-pressed to afford the cost of the Netflix Prima Cinema TV box at $35,000 a pop as well as the charge per film.

With the new box, users can browse film libraries under the categories of “new releases” and “coming soon.” As they make their preferred selection, they will be prompted to pay a fee of $500 for the privilege of watching the newly released epic. Rather than suffering through the often irritating effects of buffering while viewing, the film is reportedly downloaded onto the Netflix Prima box in encrypted format, making for ease and pleasure in viewing.

You can also take your time choosing which movie to watch that evening, as the box can store up to 50 full-length films, working out at around 75 hours of blockbuster viewing pleasure.

Obviously, the downloads are a fair size, so Netflix recommends a minimum connection speed of 10Mbs, but Prima Cinema does say 20Mbs or more works much better.

According to iDigital Times, the library of movies available through this service on the Prima website is quite extensive, with the latest upcoming films and blockbusters just waiting to be watched, sometimes before they hit the cinema screen.

Volume-wise, the new Netflix Prima service probably won’t compete with services like Amazon, but the exclusiveness of the whole deal is definitely worth the price to those who can afford it.

Netflix Prima Cinema’s website has the message: “Before Prima Cinema, only invited Hollywood insiders were able to view theatrically released films at home. No longer. Prima Cinema is the first premium entertainment company that delivers Hollywood films directly to your private home theater.”

They go on to ask you to imagine never missing that critical opening scene ever again by arriving late at the cinema, and the opportunity to watch any film, at any time.

So there you go. If you have the necessary cash, enjoy the new Netflix Prime Cinema service to its fullest.

Wealthy and westernized, Australia and Japan (where Netflix debuted in 2015) are worlds apart from India, which boasts a huge English-speaking population and a fanatical film culture, but has poor broadband connectability and a host of formidable local players. In other high-income territories such as Hong Kong and South Korea, audiences have strong preferences for local-language programming.

Netflix will either have to dedicate a great deal of management time to Asia or accept that progress will be modest. Leaving out China, where Netflix is not yet launching, analysis firm Media Partners Asia estimates the company will have 9 million subscribers by 2020 in a region that stretches from Japan to Australia and India.

The streaming giant has decided on a pricing strategy comparable to its existing plans in North America and Europe. That makes it more expensive than many local competitors, and leaves piracy an attractive option. On its Jan. 19 earnings call, Netflix admitted the approach may limit its uptake to the affluent middle-class, rather than winning over the masses.

Competition from local and regional services is significant and growing. Hong Kong-based PCCW’s Vue is now in Singapore as well; Singapore-based SingTel’s Hooq serves India, Thailand and the Philippines; HBO Go is in Hong Kong and the Philippines; and Iflix, which includes MGM as an investor, is operational in Malaysia, the Philippines and Thailand.

Chinese video platforms are also beginning to expand into Greater China and Southeast Asia, even as China blocks access to foreign media groups. China-based LeEco (formerly LeTV) is in the vanguard of expansion into Hong Kong.

Among the strengths of the existing ventures in Asia are their lineups of local content. Hollywood movies are niche programming in several Asian markets, and local platforms are involved not just in producing movies and TV shows, but in developing talent and user-generated Web content. In India, Bollywood (and regional-language) movies are a must-have that pay-TV and satellite groups Star VideoCon (Fox), Sony and Tata Sky have already locked in. While Netflix’s own content is a strength in North America, much of it has been licensed to existing platforms, and will not be available for the company’s use in Asia for at least three years.

Regulatory risk is a challenge Netflix appears to have sidelined for now, brazenly adopting the strategy of launch now, face the consequences later. Clashes appear inevitable: Indonesia’s censorship agency noted that Netflix is unlicensed in the nation, and that much of its content cannot be shown in cinemas and is unsuitable for local audiences; Vietnamese regulators have spoken of banning the company on similar grounds; and Muslim Malaysia is likely to require that Netflix follow its content controls. In Singapore, local video-on-demand rivals complain that the U.S. newcomer isn’t subject to the same censorship laws they face.

Region-wide, there is the sense that the playing field is uneven. “They sit in Silicon Valley, open the gusher, and the sweet crude flows all through the global network, just like that?” says John Medeiros, chief policy officer at the Cable & Satellite Broadcasting Assn. of Asia. “Maybe that happens (for a while) in a technical sense, but in a commercial sense, you still need access to customers and to their payments, and the governments that you’re flipping off might have something to say about that.”

Yet some feel that the arrival of Netflix could be a positive. Vivek Couto, exec director of Media Partners Asia, reckons it will stimulate the subscription VOD industry. “It is going to help establish the value (point) for SVOD,” he notes, adding that could be a catalyst for evolution in business models, content production, industry alliances and regulation.

Rivals in Japan — Amazon, Avex, Hulu (bought by Nippon TV in 2014), Gyao and Rakuten — have all scaled up their SVOD offerings, and become more aggressive with acquisitions and first-window terms. Japanese producers also recently launched their own platform, Bonobo.

If Netflix’s first few years in Asia are certain to be peppered with regulatory disputes and content tussles, one of the most interesting sideshows will be the reaction of Hollywood studios and global content groups. Will they sell everything to Netflix or favor regional services in order to stimulate competition? Or will they launch their own OTT services in Asia, as they are doing in the U.S.?

HBO has a head start, with HBO Go. Fox, one of the biggest channel integrators in the region, has been talking about its own platform for years. Observers will just have to wait and see.

Looking ahead, Netflix expects to grow by more than 6 million subs in Q1 2016 following its **recent expansion into an additional 130 countries** (but not yet China).

Following the release of its Q4 numbers, Netflix stock jumped 8.22% ($8.77) to $116.76 each in early after-hours trading.

Netflix posted total Q4 streaming revenues of $1.67 billion, a smidge above the company’s forecast of $1.66 billion, and a contribution profit of $270 million. It expects total streaming revenues in Q1 2016 of $1.81 billion, and a contribution profit of $302 million.

The company added 1.56 million U.S. streaming subs, below an anticipated 1.65 million, expanding its total in the category to 44.74 million. Netflix said it expects to add 1.75 million U.S streaming subs in Q1 2016.

Our high penetration in the US seems to be making net additions harder than in the past,” Netflix said in its **letter to shareholders (PDF).** “New credit/debit card rollover continues to be a background issue.”

On the global front, Netflix added 4.04 million international streaming subs in Q4, beating an anticipated 3.50 million. It ended Q4 with 30.02 million international streaming subs, and sees that total rising to 34.37 in Q1 2016. International streaming revenues in Q4 reached $566 million, expected to rise to $653 million in Q1 2016. Netflix’s international efforts also swung to a loss of $109 million in Q4, a figure expected to widen to $114 million in Q1 2016.

Netflix noted that it’s seeing “increased adoption” of an $11.99 per month plan that provides access to a growing library of titles in Ultra HD format.

The company warned that it will be releasing a “substantial number” of U.S. subs in Q2 and Q3 from price grandfathering on the HD plan — they will still have an option to stay on a plan that’s $7.99 per month, but it will convert to SD, or get HD for $9.99 a month. “Given these members have been with us at least 2 years, we expect only slightly elevated churn,” Netflix said.

Netflix reiterated its plan to launch more than 600 hours of original programming in 2016, up from 450 hours last year — including new seasons of about 30 original series, eight original feature films, 35 new seasons of kids shows, a dozen documentaries, and nine stand-up comedy specials.

Netflix also **readdressed third-party research** on usage and ratings that suggest that Netflix’s impact on traditional TV models has been minor.

“The growth of Netflix has created some anxiety among TV networks and calls to be fearful,” the OTT giant said. “ Or, at the other extreme, an NBC executive recently said Internet TV is overblown and that linear TV is ‘TV like God intended.’ Our investors are not as sure of God’s intentions for TV, and instead think that Internet TV is a fundamentally better entertainment experience that will gain share for many years.”

On that point, Netflix said traditional media players are already shifting their strategies and using revenue from Netflix and other SVOD services to shore up OTT plays, citing examples such as NBCU’s Seeso, Hulu, CanalPlay, HBO Now, and CBS All Access, among others.

And here’s a stat to close Netflix’s book on 2015: Subs streamed 42.5 billion hours last year, up from 29 billion hours in 2014.

Netflix has long been aware of this practice and has in the past indicated that it has no plans to ban individual users caught engaging in such behavior. What it will do, however, is take steps to make it much more challenging for users to skirt around regional content restrictions.

In a blogpost published earlier today, David Fullagar, Netflix’s VP of Content Delivery Architecture, said that the streaming video giant in the coming weeks will take measures to try to curb unauthorized access to content.

“Some members use proxies or “unblockers” to access titles available outside their territory,” Fullagar writes. “To address this, we employ the same or similar measures other firms do. This technology continues to evolve and we are evolving with it. That means in coming weeks, those using proxies and unblockers will only be able to access the service in the country where they currently are. We are confident this change won’t impact members not using proxies.”

Sadly, Netflix’s hands are pretty much tied here. While the company said that it’s working diligently to have its content be universally licensed across the globe, it’s still caught up in an antiquated geography-oriented licensing system that wasn’t designed for the digital age.

Netflix didn’t go into detail about what technologies or methods it plans to implement in order to stymie proxy access (aside from titling its post ‘Evolving Proxy Detection’), but we’ll probably start hearing some rumblings about the efficacy of its efforts in the weeks ahead.

Investors were reacting to news from CEO Reed Hastings who announced during a Wednesday CES keynote that the streaming video service has expanded into India.

As of 9:37 a.m. CT on Thursday, shares of Netflix were up 1 percent to $118.90.

Netflix on Thursday announced that it had launched its service globally, bringing its streaming service to more than 130 new countries around the world.

“Today you are witnessing the birth of a new global Internet TV network,” Hastings said. “With this launch, consumers around the world -- from Singapore to St. Petersburg, from San Francisco to Sao Paulo -- will be able to enjoy TV shows and movies simultaneously -- no more waiting. With the help of the Internet, we are putting power in consumers’ hands to watch whenever, wherever and on whatever device.”

While largely available in English in most new countries, Netflix added Arabic, Korean, Simplified and Traditional Chinese to the 17 languages it already supports.

“From today onwards, we will listen and we will learn, gradually adding more languages, more content and more ways for people to engage with Netflix,” said Hastings. “We’re looking forward to bringing great stories from all over the world to people all over the world.”

Netflix will not yet be available in China, though the company continues to explore options for providing the service. It also won’t be available in Crimea, North Korea and Syria due to U.S. government restrictions on American companies.

Since Netflix launched its streaming service in 2007, the service has expanded globally, first to Canada, then to Latin America, Europe, Australia, New Zealand and Japan to include 60 countries.

Encouraged by these results, as well as months of additional testing, Netflix now has begun to embark on one of the biggest changes to its streaming technology since it launched its online video service in 2007. If all goes according to plan, the switch could help consumers get better-looking streams while also saving up to 20 percent of data — which is significant in North America, where Netflix usage single-handedly accounts for more than a third of all data consumed during peak times, and an even bigger deal in all those countries with relatively slow internet speeds that the company is looking to enter in 2016.

Netflix has been working on this new technology since 2011, when members of its video algorithms team realized that they had gotten it all wrong. Like practically everyone else in the online video world, Netflix had been preparing its video files for streaming based on the bandwidth available to consumers. Some Netflix subscribers were accessing the service with slow DSL connections, others had faster cable connections, and a lucky few were already online with super-fast fiber speeds.

Based on these use cases, Netflix’s video algorithms team had developed a number of quality levels, or recipes, as they’re called in the world of video encoding. Each video file on Netflix’s servers was being prepared with these same recipes to make multiple versions necessary to serve users at different speeds. At the lowest end was a file encoded with a bitrate of 235 kbps, which would work even on very slow connections, but also only deliver a resolution of 320 by 240 pixels. Somewhere in the middle was a 1750 kbps file for a resolution of 1280 by 720, and the best quality was a 5800 kbps version for a great-looking 1080p experience.

Netflix’s service has been dynamically delivering these versions based on a consumer’s bandwidth needs, which is why the quality of a stream occasionally shifts in the middle of a binge-watching session. But across its entire catalog of movies and TV shows, the company has been using the same rules — which didn’t really make sense. “You shouldn’t allocate the same amount of bits for ‘My Little Pony’ as for ‘The Avengers,’” explained Netflix video algorithms manager Anne Aaron.

That’s because a show like “My Little Pony” is not at all like the ‘Avengers’ — especially to a computer in charge of preparing media files for streaming. Animated shows like “My Little Pony” can be reproduced with relatively little data. An animated sky, for example, tends to be filled with the same shade of blue, and an animated pony that just stands around talking isn’t very complex to a computer either. The “Avengers” on the other hand is full of fast-paced action, which plays out in front of cityscapes and other environments with lots of visual details. And, of course, explosions, rubble, smoke, and lots of it. Or as video engineers like to call it: noise. “Noise is hard to encode,” said Aaron.

It’s a much more complex movie, at least from a purely visual perspective. This means that Netflix’s encoding servers have to work a lot harder to get it down to the same file sizes as they do with “My Little Pony,” leading to more compression and possibly more visible artifacts at low bitrates. That’s why in 2011, Netflix’s video algorithm engineers realized that they shouldn’t apply the same encoding rules to these two very different titles. “A one-size-fits-all model doesn’t give you the most optimal quality,” said Aaron.

Instead, they decided that each title should get its own set of rules. This allows the company to stream visually simple videos like “My Little Pony” in a 1080p resolution with a bitrate of just 1.5 Mbps. In other words: Even someone with a very slow broadband or mobile internet connection can watch the animated show in full HD quality under the new approach. Previously, the same consumer would have just been able to watch the show with a resolution of 720*480, and still used more data.

But Netflix’s new per title approach doesn’t just improve things for animated TV shows. Fans of other fare are also set to benefit, and see significant bandwidth savings when streaming the highest quality 1080p video. Netflix’s video algorithms team set up a test for Variety in its offices in Los Gatos last week, streaming two episodes of “Orange is the New Black” in 1080p on two TVs mounted side-by-side, similar to the tests the company has been doing with its employees. The images on both TVs looked virtually identical — but one streamed with 5800 kbps, using Netflix’s legacy encoding scheme, whereas the other displayed the show with 4640 kbps. The difference? 20 percent in bandwidth savings.

Over the past couple of years, Netflix’s video algorithm engineers have worked on perfecting this more flexible approach towards video encoding. Initially, they assumed that they would just have to categorize all of their titles to develop new encoding rules for animated shows, action movies, slow indie dramas and so forth. But they quickly realized that no two indie movies are alike, and that there can even be considerable visual differences within a season of the same TV show. “Each episode could be very different,” said Aaron. The result is a true title-by-title approach, where every single movie and TV show episode gets its own encoding settings.

In recent months, Netflix has been silently testing the new encoding scheme by sending out streams with new and improved bitrates and resolutions to randomly selected customers. The company did keep a close eye on completion rates and streaming duration, but it also wanted to make sure that all devices out in the field were able to deal with the new bitrates.

Separately, Netflix has been testing the new and improved videos in person both with its own employees as well as with a number of customers. And earlier this month, Netflix quietly added a first batch of videos encoded with the new per-title approach to its catalog. Beginning with some of the most popular videos, the company aims to have a thousand re-encoded titles in its catalog by the holidays, and complete the entire process by the end of Q1 2016.

This whole endeavor couldn’t have been possible without some considerable technical advances. First of all, Netflix needed a good way to analyze the visual quality of a video file when encoded with different settings. The company doesn’t really talk about the size of its catalog, but it’s fair to assume that the entirety of its catalog, including all TV show episodes, movies and trailers across all of its markets around the world is in the six digits, and new titles are constantly added.

It’s impossible for Netflix’s employees to visually inspect every single one of these videos in all available resolutions and bitrates. That’s why Netflix partnered with researchers at the University of Southern California, the University of Nantes and the UT Austin to develop technology to automate this process.

But knowing which quality would be best for a video and actually redoing Netflix’s entire catalog are still two very different things. The company has been using two tricks to make this approach even more efficient and prepare itself for the massive re-encoding project: It cuts every title into numerous slices, making it possible for multiple servers to crunch away on it at the same time, significantly speeding up encoding.

Netflix has long used cloud computing instead of its own data centers to run its service, and the encoding is also done on Amazon’s web services. However, the sheer amount of computing power necessary for a redo of its entire catalog is still significant, even in a cloud world where capacity can be added on demand. That’s why Netflix is shifting around its encoding jobs on the server instances it rents from Amazon to make use of any idle time. Netflix’s Amazon servers may help you to binge on “Jessica Jones” in the evening, but at night, when everyone is asleep, those very same servers are busy re-encoding the company’s catalog.

Netflix’s new per-title approach is good news for its subscribers, who now get to watch many of the service’s videos with a better quality while saving bandwidth at the same time. But it could be an even bigger deal for phone and cable companies and the internet at large.

Netflix is now responsible for 37 percent of all internet traffic going into people’s homes in North America during those peak times when everyone is in front of their TVs, according to recent data from Sandvine. Reducing that amount of data by up to 20 percent could help to alleviate internet bottlenecks. “We want to be good stewards of the internet,” said Aaron.

Netflix’s impact on the internet has been a bit of a touchy subject in the past. Cable companies like Comcast and Time Warner Cable wanted Netflix to reimburse them for sending so much traffic to their customers. Netflix argued that this would amount to double billing because those customers are already paying for their service. The internet companies disagreed, and a public stand-off temporarily led to Netflix speeds going down for many customers. In the end, Netflix gave in and agreed to pay up. But as the company is expanding around the world, similar issues are likely to pop up again. Anything that helps Netflix to slow down the growth of its traffic is likely going to make things a lot easier for the company.

What’s more, many of Netflix’s future markets have much slower internet speeds. Netflix has said that it wants to be in all countries around the world by the end of 2016. Expanding to India, Africa and the Middle East in many cases means taking a mobile-first approach, or dealing with much slower wired internet speeds. Both will benefit significantly from the new encoding scheme, which will allow Netflix to deliver better-looking videos at slower speeds.

Once Netflix’s video algorithms team is done with re-encoding the existing catalog, it already has a number of new challenges ahead. There is 4K, and there are a number of other ways to improve image quality, including higher frame rates and HDR.

And then there is another crazy idea that could require the company to re-encode the entire catalog all over again: After finding the best setting for each single video, Aaron’s team is now thinking about even encoding each scene of a movie or TV show with different settings to account for higher information density during fight scenes and lower demands during slow moments of introspection.

For Netflix employees, this could mean more chances to finally win that unclaimed champagne bottle.

Mr. Díez Ferreira, 44, got hooked on “House of Cards,” the popular political drama starring Kevin Spacey, while living in Miami and San Francisco. After moving to Madrid, Mr. Díez Ferreira’s family still favors American movies and television shows over local Spanish content, mostly so his 3-year-old daughter can practice her English.

But when Netflix becomes available in Spain on Tuesday, Mr. Díez Ferreira won’t be signing up.

“Netflix can’t offer me anything I don’t already get elsewhere,” said Mr. Díez Ferreira, a Spanish businessman who has two subscriptions with rival video-streaming services, one of which has licensed Netflix’s programs, including “Orange Is the New Black,” in Spain.

“If I can watch these shows with what I’m already paying, it doesn’t make sense to get a Netflix account,” he added. “Netflix is getting to Spain really late.”

Mr. Díez Ferreira’s reluctance underscores the obstacles Netflix faces as it pursues its global ambitions. Those plans will take a step forward this week when Netflix adds Spain, Portugal and Italy to its current European roster of 13 countries, including Britain and Germany.

Building its international base has taken on more urgency for Netflix. Last week the company reported third-quarter earnings showing that it had missed its forecast for growth in the United States, with profits dropping 50 percent compared with the year before. Its American operations still represent roughly two-thirds of the company’s revenues.

Netflix, founded almost two decades ago, now operates in more than 50 countries from North America to Asia. The company has signed up almost 24 million paying international subscribers, or roughly one-third of its total users, according to regulatory filings.

Yet Netflix and its efforts to expand overseas are facing a series of challenges that could hamper future growth, including patchwork regulatory restrictions worldwide and stiff competition in individual countries from services that are attracting viewers like Mr. Díez Ferreira.

That is particularly true in the European Union, where current rules often limit what content can be made available in each of the region’s 28 countries. National audiences, many of whom are not fluent in English, often prefer local-language programming, and potential subscribers remain hesitant to pay for premium content.

“We had expectations for Netflix to be doing slightly better, but the broadcasting landscape is very locally oriented,” David Sidebottom, an analyst at Futuresource Consultancy, said in reference to Netflix’s international reach. “People are also more reluctant to pay for a monthly subscription to a video service in France and Germany.”

In many countries, Netflix faces an uphill challenge. Well-established rivals have sprouted from France to India, often mimicking Netflix’s video-on-demand services while promoting local-language content for national audiences. Other media companies like Sky of Britain and Mediaset of Italy also have struck licensing deals with media companies like HBO to offer American programming for Europeans who crave the latest American shows.

And a number of deep-pocketed global tech companies like Amazon and Rakuten, the Japanese e-commerce giant, as well as a flurry of new start-ups, now offer Netflix-like services, which could make it harder for the company to gain a foothold in new territories.

“Every market is growing,” Reed Hastings, Netflix’s chief executive, said recently when asked by investors about the company’s aggressive international expansion plans. “But some are doing better than others,” he acknowledged. “That’s up to us to manage to get the total portfolio to be as fast growing as they are.” Netflix does not provide specific figures on individual countries worldwide.

People across the globe are taking advantage of new technological trends, including ultrafast broadband and affordable smartphones, to stream movies and television programs to their homes and, increasingly, to watch shows on the go.

Netflix, for instance, could roughly double its subscribers worldwide, to 130 million by the end of the decade, with the majority of viewers living outside the United States, according to Ampere Analysis, an independent video analytics firm. That figure would be about triple that of Amazon, its closest rival.

To fend off competitors, Netflix executives also are increasingly signing global licensing deals, often at a significant premium, with major studios providing Hollywood blockbusters across the company’s international markets all at once. Currently, content deals are made on a regional or national level.

And in a bid to win over skeptical international customers, many of whom have never heard of Netflix, the company has teamed up with national cellphone and cable operators to offer the video-streaming service as part of existing video-on-demand offerings. The company has similar agreements with companies like Cablevision and Dish Network in the United States.

“Offering Netflix gives our customers another reason to stay with us,” Marco Patuano, chief executive of Telecom Italia, said in an interview.

Telecom Italia, a former Italian telecom monopoly, will allow people to pay for the video-streaming service through their monthly contracts when it becomes available in Italy on Thursday. “We want to give our customers as much premium content as we can,” Mr. Patuano said.

For Netflix to succeed globally, though, the company must outmuscle people like Jacinto Roca.

As the Spanish chief executive of Wuaki.tv, a Pan-European video-on-demand service owned by Rakuten, Mr. Roca already has 2.5 million subscribers spread across seven European countries, and plans to expand into three more markets by the end of 2015. In Spain, its main market, the company already is viewed as an incumbent, even before Netflix starts its rival service this week.

While American programs represent roughly half of Wuaki.tv’s stable of content, the company, based in Barcelona, also employs small five-person teams in each country where it operates. Their mission is to buy local-language content to match users’ tastes (the company offers both monthly subscriptions and one-time purchases). That local flavor, Mr. Roca says, sets his company apart from Netflix’s mostly American programs.

“Europeans want to watch European content,” he said in an interview. “We have the local knowledge of what people want. You can’t beat that.”

In response, Netflix has started to produce its own non-English-language content, including “Narcos,” the series mostly in Spanish about the rise and fall of Pablo Escobar. Crime dramas in Italian and French are also planned.

The difficulties — and potential rewards — of Netflix’s expansion efforts are most evident in France, one of Europe’s largest media markets.

When the company started its service there last year, local policy makersfretted that the American company would bombard subscribers with English-language content. The company also was criticized for flouting French rules that forced national television channels and other streaming services to subsidize French films. (The country’s regulators eventually extended the levy to include international companies with French customers.)

A year after its introduction, though, Netflix’s service has attracted only 700,000 monthly subscribers, according to industry estimates, primarily by offering English-language content. That puts it slightly behind CanalPlay, a local streaming rival owned by Vivendi, a French media conglomerate. And Molotov, a Paris-based start-up run by several former prominent media executives, also has teamed up with 80 French and international television channels to offer video-on-demand services on a single online platform.

For Manuel Alduy, who runs CanalPlay, the arrival of Netflix has not proved to be the downfall of its local rivals. Instead, he says, the ability of French competitors to offer local content has won support of people who do not solely want to watch American movies or television shows.

“We are a platform that fits with the tastes of a French audience,” said Mr. Alduy. Netflix, he said, “will find a seat in France. But it won’t be the upheaval as people thought it would be.”

In terms of streaming networks, which seem to represent the future of home TV and film viewing, Netflix remains the most visible brand. Its original programming, which includes Orange Is the New Black, House of Cards, and Daredevil, has become crucial to maintaining its subscriber base, but is also very expensive to produce, while deals securing rights to first-run movies have also become more and more costly. The company still made $29.43 million in its last quarter (against a forecast of $31 million), but that figure is considerably less than the $59.29 million it made in the same period in 2014.

As a result, the company is raising its subscription fees (to $10 a month for its most-used streaming-only plan) while it continues to expand around the world, hoping to tap subscriber bases outside of America before its competitors can mount similar growth plans. Netflix’s advantage has always been in its huge back catalog of TV shows and films for subscribers to browse through. But Hulu recently poached films owned by the cable distributor Epix, and Amazon continues to try and ape the Netflix model by signing exclusive deals with critically acclaimed shows like The Americansand Mr. Robot, hoping to promote the kind of binge-watching that made Breaking Bad a cult sensation.

Netflix’s CEO, Reed Hastings, naturally states he’s untroubled by the news. “It is clear that Internet TV is becoming increasingly mainstream and traditional media companies are adjusting to the shift from linear to on-demand viewing,” he said in a statement. “It is a great time to be a creator of content because studios make content to sell content (not to withhold it) and there are new bidders for their product. Some studios will choose to license content to SVOD services like Hulu, Amazon Prime Instant Video, and Netflix. Others may not. We have a lot of content to select from.”

He’s not wrong. In this era of supposed “Peak TV,” there are more and more shows to go around, and for cord-cutters abandoning their cable subscriptions, signing up with Netflix and Hulu would still represent a huge slim-down in their monthly bills. Still, as streaming TV becomes the norm, competition will only get more furious, and Netflix may soon find itself wistful for the days when it was the only fish in a much smaller pond.

In addition, Hulu said it will produce original content and curate films for VR platforms, starting with a short film as a bonus feature for series “RocketJump: The Show.”

Netflix said it worked with Facebook’s Oculus VR to develop an app for Samsung Gear VR, set togo on sale this fall for $99. The app features the “Netflix Living Room” (pictured above), which provides a user interface designed for the virtual-reality headset.

“A year ago, I had a short list of the top things that I felt Gear VR needed to be successful. One of them was Netflix,” Oculus CTO John Carmack wrote in a blog post on Netflix’s site. “Despite all the talk of hardcore gamers and abstract metaverses, a lot of people want to watch movies and shows in virtual reality.”

Hulu’s VR app, meanwhile, will feature immersive 3D environments that will allow subscribers to stream the service’s 2D library as well as original VR content. Hulu expects to release the app this fall; which platforms it runs on have yet to be announced.

Hulu’s first original VR short film is “The Big One,” which will launch as a companion to the series from Lionsgate and Freddie Wong’s RocketJump studio chronicling his filmmaking escapades. “The Big One,” about a meteor shower that turns into an apocalyptic nightmare, is being produced by Lionsgate in conjunction with RocketJump and VR startup WEVR.

The strongest growth was in international markets, where subscribers jumped 2.37 million to 23.3 million, the company said Wednesday on its website. That beat the 1.94 million average of five analysts’ estimates compiled by Bloomberg News. Domestic subscribers grew by 900,000 to a total of 42.3 million, beating estimates of 636,000

The results highlight Netflix’s progress in building the first global Internet TV channel, fueled by new shows such as “Daredevil,” its first program with Walt Disney Co.’s Marvel Studios, and “Sense8,” created by the directors of “The Matrix.” Spending on films and TV shows will exceed $6 billion next year, the company said.

“Netflix is a subscriber momentum story,” said Paul Sweeney, a Bloomberg Intelligence analyst. “As long as the company continues to add subscribers domestically and internationally, the bulls will be happy. The second-quarter results and third-quarter outlook show” continued subscriber growth momentum.

Netflix, which split 7-for-1 Wednesday, rose 9.5 percent to $107.50 in extended trading after results were announced. The shares fell 2.2 percent to $98.13 at the close in New York and have doubled this year.

The company expanded to New Zealand and Australia in March, and will offer its service in Japan, Spain, Italy and Portugal later this year. International subscribers now account for 31 percent of Netflix’s streaming revenue, and the company said it’s profitable in several of the foreign territories where it first offered service.

Growth in Japan will be slow at first, Chief Executive Officer Reed Hastings said on a conference call with analysts. It has the potential to be one of the service’s best markets in the long run, he said.

“When Japanese society embraces a brand, it’s a very deep connection,” Hastings said. Netflix will avoid some of the early struggles rival streaming service Hulu had in Japan by keeping prices low and offering more localized video.

Hedge Funds Turn Against Netflix As Stock Surges

China Card

Netflix has said it will mostly complete its worldwide rollout by the end of 2016, expanding into an additional 150 countries. The company reiterated it’s weighing when to enter China, the world’s most populous country, and now hopes to introduce service there next year, Hastings said in an interview. It’s seeking a local partner as well as government approvals.

Second-quarter net income fell to $26.3 million, or 6 cents a share, from $71 million, or 16 cents, a year earlier. Analysts were projecting a post-split profit of 4 cents, the average of 32 estimates compiled by Bloomberg.

The company reported a loss of $92 million from international streaming, less than the $101 million projected in April.

In his letter to investors, Hastings said the company remains “committed to running around break-even globally on a net income basis through 2016 and then to deliver material global profits in 2017 and beyond.”

Revenue for the quarter rose 23 percent to $1.64 billion, compared with analysts’ projections of $1.65 billion.

Several analysts have projected Netflix will surpass 100 million subscribers by 2020. Netflix reached 5 million subscribers in Latin America last year. Digital TV Research Ltd. projects it will top 7 million there and 5 million in the U.K. by year end.

For the third quarter, Netflix projects it will add 3.55 million new subscribers, for a total of 69.1 million. The company forecasts net income of $31 million, or 7 cents a share.

Analysts forecast 3.34 million new customers worldwide. They estimate profit of 5 cents a share for the third quarter on sales of $1.73 billion.

The company is expanding its production and acquisition of original programming to sustain that growth. In October, Netflix will release its first original feature film, “Beasts of No Nation,” for streaming customers and in theaters. Adam Sandler’s “The Ridiculous Six” comes out in December.

Netflix has acquired more Spanish-language programming for its U.S. viewers, and will produce and acquire localized videos for many of its new territories.

The expansion is part of the No. 1 subscription-video provider’s aggressive aim of reaching some 200 countries, to be available virtually everywhere in the world, by the end of 2016.

Netflix didn’t announce pricing for the three new markets. Last fall, it debuted in six European nations — Germany, France, Luxembourg, Belgium, Austria and Switzerland — at 7.99 Euros per month.

Customers in Italy and Spain will have access to content with in-language subtitles and dubbing; Netflix is offering Portuguese subtitles for customers there.

The company offers service in more than 55 countries, including the U.S. (its biggest market); Canada; the U.K.; Mexico; Brazil and 42 other Latin American countries; and Australia and New Zealand.

Netflix this fall expects to launch in its first Asian territory, with Japan slated for a fall 2015 rollout.

And Netflix is clearly interested in entering China — the world’s most-populous market — but faces several hurdles in getting there, including procuring a license from the government to operate an SVOD service. “For China, we are still exploring options — all of them modest,” CEO Reed Hastings and CFO David Wells wrote a letter to shareholders earlier this year.

Netflix noted that customers in Italy, Spain and Portugal will have access to original series including “Marvel’s Daredevil,” “Sense8,” “Bloodline, “Grace and Frankie,” “Unbreakable Kimmy Schmidt” and “Marco Polo” as well as original documentaries like “Virunga” and stand-up comedy specials.

In addition, Netflix is launching its first original feature films later this year. Titles include “Crouching Tiger, Hidden Dragon: The Green Legend” — the sequel to the 2000 original — plus “Beasts of No Nation,” “Jadotville” and “The Ridiculous 6.”

, Netflix’s two biggest series, “House of Cards” and “Orange Is the New Black,” will not be initially available in Italy, Spain or Portugal because those shows have already been licensed exclusively to TV networks in those territories.

Netflix had 62.3 million subscribers worldwide as of the end of March, including 20.9 million outside the U.S., after adding a record 4.9 million subs in Q1.

A Mediacom spokesman said the agreement with Netflix does not involve Open Connect, Netflix’s private content delivery network that relies on edge caching devices. That’s an important distinction, considering that Mediacom has**previously held that Netflix was using integration on MVPD-leased TiVo boxes as a “bargaining chip in their Open Connect negotiations.”**

Instead of Open Connect, the agreement between Mediacom and Netflix calls for the MSO to build fiber directly to Netflix’s facilities, “eliminating the middlemen,” Thomas Larsen, Mediacom’s group vice president of legal and public affairs, said via email.

While that sort of agreement sounds like the kind of paid interconnection deals Netflix has signed with Comcast, AT&T, Verizon and Time Warner Cable (Bright House Networks is **benefitting from the TWC/Netflix agreement**), Mediacom’s agreement with Netflix does not involve payments, Larsen explained.

Mediacom ranked seventh among major U.S. ISPs on **Netflix’s ISP Speed Index for March 2015**, providing an average Netflix streaming speed of 3.24 Mbps. Mediacom said it expects the quality of its customers’ Netflix video experience to improve further as the MSO completes construction of a direct connection to the Netflix network this summer.

Mediacom’s TiVo customers will need to have an existing Netflix subscription or subscribe to Netflix in order to utilize the Netflix app.

Mediacom, which provides services to about 1.3 million customers in 22 states, joins several other TiVo MSO partners to integrate Netflix on leased boxes, a group that includes Suddenlink Communications, RCN, Cogeco, Cable One, Midcontinent Communications, Atlantic Broadband, Grande Communications and Virgin Media, among others.

“Striking this agreement with Netflix is another great example of Mediacom taking steps to simplify and enrich the customer experience inside the home,” said Mediacom’s executive vice president of operations, John Pascarelli, in a statement. “Adding the easy functionality of popular services like Netflix to the TiVo set-top box gives Mediacom customers far greater access to content and underscores the superior quality of our high-speed Internet service.”

“Mediacom is making it even easier for consumers to watch Netflix on their TVs,” added Bill Holmes, Netflix’s global head of business development. “This combination of traditional cable services with Netflix’s online content significantly enhances the experience of Mediacom customers.”

Customers will be able to access the Netflix app on multiple Joey receivers distributed throughout their homes.

The company is releasing the Netflix app on Joeys, Super Joeys, and Wireless Joeys connected to second generation Hopper customers within weeks. Dish originally announced the integration of the Netflix app last December.

First generation Hopper customers, in addition to all Joey customers, will be able to access the Vevo app later this year. All three major Vevo channels, popular hits, country, and rap and R&B, will be available. The channels include a library of 140,000 videos.

The apps can be accessed from any Dish channel by selecting the blue button located on the remote.

Netflix’s growth trajectory will be stifled as OTT rivals continue to boost their offerings in the market and provide greater choice to consumers, the firm’s analysts wrote in a research note. Among developments Evercore cited: Next month’s HBO Now launch on Apple TV, which will make the premium cabler available for the first time without a pay-TV subscription; and Netflix is not in the running to acquire “Seinfeld” streaming rights from Sony Pictures Television (with Amazon and Hulu said to be among the bidders).

“In the context of increasing competition among existing and emerging distributors, and with content providers becoming better equipped to leverage these newer channels through OTT offerings of their own, we view (Netflix) shares as unattractive,” wrote the Evercore analysts, led by managing director of equity research Ken Sena.

Other developments the firm cited as potentially putting pressure on Netflix’s growth include ABC’s live-streaming of “The Oscars Backstage” on Facebook and Snapchat’s new Discover platform — even though those free video services are not directly competitive with subscription VOD.

Evercore cut Netflix to a “sell” rating from “hold” and reduced its target price on the stock from $450 to $380 per share. The heightened competitive landscape will necessitate “increased investment with uncertain return,” the analysts said. Netflix’s stock opened Monday at $430.83 per share before falling as low as $417.34; its 52-week high is $489.29 per share.

Netflix will still add subscribers at a rapid clip, the firm estimates — just not as fast as previously expected. Evercore reduced its projection for Netflix 2015 subscribers by 2%, to 70.1 million, which would be up 22% from 57.4 million worldwide at the end of last year.

But the firm also reduced projected consolidated operating income for the year by 26%, to $381 million (down 5% year over year from $517 million previously). “Although we note that this reduction is rather substantial, it is consistent with management’s guidance that they expect operating income to be lower in 2015 on an absolute basis than it was in 2014, which we had previously viewed to be conservative,” Evercore’s analysts wrote.

Netflix has pegged an aggressive schedule for rolling out internationally, targeting expansion to 200 markets worldwide by the end of 2016. But the company’s international strategy will face “certain impeding factors to scale,” including lighter TV consumption and lower pay-TV penetration outside the U.S., as well as greater SVOD competition in international markets.

Netflix, which is working on international expansion and hopes to be in about 200 countries by the end of next year, said Monday that Cubans with Internet connections and access to international payment methods will be able to subscribe to its service to watch movies and TV shows.

Only about 27 percent of Cuba’s population currently has access to the Internet, according to Internet Live Stats, which uses information from the International Telecommunication Union, the United Nations and the World Bank to estimate the world’s Internet users. But Netflix is banking that infrastructure upgrades will bring Internet access to more people in the wake of President Barack Obama’s easing of sanctions against the country.

In a press release issued Wednesday afternoon, Netflix said that it promoted its Chief Partnerships Officer Greg Peters, who speaks Japanese, to become the general manager of Netflix Japan. The release also quotes Netflix CEO Reed Hastings:

“With its rich culture and celebrated creative traditions, Japan is a critical component of our plan to connect people around the world to stories they love. As we expand into Asia, we’re excited Netflix members increasingly will have access to some of their favorite movies and TV shows no matter where they are.”

Netflix surprised investors last month when executives announced as part of the company’s Q4 earnings that they wanted to complete the company’s international expansion to a total of 200 countries within the next two years. Netflix currently operates in close to 50 countries, and has announced that it isgoing to launch in Australia and New Zealand next month.

The majority of Netflix customers still reside in the U.S., but the company has for some time seen more growth in international markets. In fact, late last year, Netflix added two international subscribers for every new domestic subscriber.

Some international markets have in the past proven challenging for Netflix. In Latin America, for example, the company initially struggled with payment problems. But it has since managed to turn the situation around, and now has more than five million subscribers across that region.

The launch in Japan will be the first time Netflix has entered the Asian market, which comes with its own set of opportunities and challenges. Japan in particular is a very mobile-centric country, which Netflix should be well-prepared for: The company has been heavily investing in its mobile experienceover the past couple of months.

Content and regulatory issues could also be challenging, especially as Netflix looks to take its service to other markets in Asia in its quest to cover the entire world by the end of next year. China is heavily regulated, and Netflix CEO Reed Hastings had to admit during the company’s most recent earnings call that it isn’t certain that Netflix will get a license to operate in China

“Our international expansion strategy over the last few years has been to expand as fast as we can while staying profitable on a global basis. Progress has been so strong that we now believe we can complete our global expansion over the next two years, while staying profitable, which is earlier than we expected. We then intend to generate material global profits from 2017 onwards.”

These bold statements comes after the company once again showed significant international growth. In Q4, it added a total of 2.43 million subscribers abroad, and now has a total of 18.28 million members in its 50 international markets. Domestically, it ended 2014 with 39.11 million subscribers, compared to 33.42 million a year before that. Netflix ended the year with a total of 57.39 million subscribers, compared to 44.35 million at the end of 2013.

So how did Netflix do money-wise? Not so shabby either: The company booked $1.305 billion in revenue from its streaming operations in Q4 of 2014, compared to $962 million during Q4 of 2013. It was able to generate a surprising $83 million of net income in Q4, compared to $48 million during the same quarter a year ago. However, that growth is in part due to tax benefits of $39 million.

But back to Netflix’s bold international plans. Hastings and Wells made it clear that they’re not just talking about adding a few more countries and then calling the job done:

“We already offer Netflix in about 50 countries and have learned a great deal about the content people prefer, the marketing they respond to and how to best organize ourselves for steady improvement. Acceleration to 200 countries is largely made possible by the tremendous growth of the Internet in general, including on phones, tablets and smart TVs.”

Hastings and Wells even laid out plans to enter China through a smaller, targeted service “centered on our original and other globally-licensed content.” The remarks about China include a caveat about acquiring “the necessary permissions,” which is particularly challenging for a service like Netflix that relies so heavily on smart TV apps. China’s regulators have in the past months cracked down on streaming devices and smart TV services, which they consider similar to running a broadcast station in the heavily regulated country.

The letter to investors names revenue growth as one goal of an accelerated international expansion, with a goal of getting to $10 billion in yearly revenue soon. Based on the Q4 earnings release, Netflix ended 2014 with around $5.5 billion in revenue from streaming and its domestic DVD business combined. But the letter to shareholder also paints Netflix as a global licensor for content, able to compete with some of the biggest media companies in the world:

“With the growth of the Internet over the next 20 years, there will be some amazing entertainment services available globally. We intend to be one of the leaders.”

Here are some other key metrics disclosed as part of the earnings release:

• Netflix plans to spend $3 billion on original content in 2015.
• The company wants to spend $600 million on marketing this year.
• Netflix plans to spend $500 million on technology in 2015.
• Netflix grew to five million subscribers across Latin America during Q4 of 2014.
• The streaming service intends to release a total of 320 hours of original TV shows, documentaries, comedy specials and movies in 2015, which is three times as much as the company put out in 2014.

Netflix has already been eating away at viewership of traditional broadcast and cable TV networks. Easier access through a multichannel video programming distributor will increase its ubiquity.

Financial terms of the deal were not disclosed.

“Pairing Netflix with Hopper represents the consolidation of two incredible video experiences,” Vivek Khemka, Dish senior VP of product management, said in a statement. “This app integration eliminates the need to switch television inputs to access content on varying devices. It gives our customers easy access to their favorite shows and movies, on both Dish and Netflix, without ever having to leave their Hopper.”

Dish said the app will begin to rollout to customers with its second-generation Hopper DVR throughout the day.

“As the first major pay-TV provider in the U.S. to add the Netflix app to its set-top box, Dish strengthens an already robust video entertainment experience for its customers,” said Bill Holmes, global head of business development at Netflix. “Many households subscribe to both Netflix and a traditional pay-TV service. Our vast library of TV shows and movies, combined with Dish’s lineup of live television content, gives customers easy access to a wide variety of complementary programming.”

Dish said it expects to bring the Netflix app to its other Hopper editions. It also said that titles available on Netflix could be integrated into the search functionality across live, recorded and video on demand programs for both the Hopper as well as Dish’s soon to be introduced over-the-top service.

Internally, partnerships with TV operators are seen as the next big step for the company. Earlier this year, a Netflix job offer put it this way:

“After having Netflix integrated on every relevant TV, Blu-Ray Player, Streaming Box, and Streaming Stick our new frontier is now cable boxes. We want to reach our current and future members on devices they use most frequently to watch linear TV, cable, and satellite set top boxes. (…) Our mad dash to integrate Netflix into all devices was just the start, now things start to get interesting…”

Netflix struck deals with a few smaller U.S. cable operators earlier this year, including Suddenlink and RCN, which all use TiVo’s DVR as their standard set-top box. However, TiVo-based pay TV boxes are in less than two million U.S. households, according to numbers disclosed in some of the company’s recent financial filings. Roughly 90 million U.S. households subscribe to cable or other forms of pay TV, and more than 73 million subscribe to the biggest five operators alone. That’s why Netflix has been working hard to team up with one of these major operators.

I’ve been told by sources with knowledge of the company’s plans that it is getting closer to finalize and announce a deal with at least one of these major operators. One source told me that an announcement may come as early as early next year, but others have cautioned that an actual deal may not be announced until much later. One of the names that kept coming up in chatter about Netflix’s plans was AT&T, but other alliances are also possible.

Who is Netflix going to partner with?

With around six million subscribers, AT&T currently ranks fifth in the list of the country’s biggest TV service operators. It’s much smaller than Comcast, which has more than 22 million TV subscribers, but it aims to become number two by combining with DirecTV, which it intends to buy for a whopping $48.5 billion.

AT&T has been more progressive than other operators with regards to online video, launching a joint venture called Otter Media with the Chernin Group that is investing in and developing niche video services. But for Netflix, there is another reason to team up with AT&T: The company uses Ericsson’s Mediaroom set-top boxes, which are also being used by Germany’s Deutsche Telekom for its Entertain pay TV service.

Netflix has already built a version of its app for this hardware, and Entertain subscribers have been able to access the app through their set-top boxes since October. That’s an important detail: Netflix likes to custom-build apps for the chipsets of devices on which it is running on to optimize speed and performance. Adapting the app it built for Deutsche Telekom to run on AT&T’s TV boxes should be easy for the company.

But AT&T isn’t the only possible candidate. I’ve heard from industry sources that Netflix has approached a number of U.S. pay TV operators for similar deals. Some of these negotiations have apparently been tied to talks about peering and caching Netflix traffic. Netflix agreed in recent months to pay Comcast, Verizon, Time Warner Cable and AT&T for peering despite publicly insisting that it shouldn’t have to do so; I’ve been told that similar discussions with operators in Europe ended with “broad agreements” that included both peering and set-top box carriage.

Netflix becomes part of your cable bill

Publicly, operators have been all over the map on partnerships with Netflix. Comcast has been the most conservative company, despite having developed a next-generation set-top box that could easily include Netflix’s app. In fact, Comcast’s proposed takeover of Time Warner Cable reportedly killed a partnership between Netflix and Time Warner Cable. Verizon on the other hand has been a lot more Netflix-friendly in recent months, to the point where it even offers new subscribers of its FIOS TV service 12 months of free Netflix as part of a promotional deal.

Pay TV operators have in the past shied away from including Netflix on their set-top boxes because they saw it as a direct competition to some of their core business, which includes reselling premium cable channels like HBO and Showtime.

However, I’ve been told by multiple sources that Netflix may be willing to sweeten the deal for cable companies by using financial incentives, which could include a monthly cut out of the company’s subscription fees. Up until now, Netflix has only paid consumer electronics manufacturers a one-time bounty for helping to sign up new customers, but no recurring fees. In exchange, operators may include Netflix subscription fees in their monthly cable bill. Netflix recently pioneered these kinds of billing relationships in the U.K., but could bring them to the U.S. as well.

Like a cable channel, with some key differences

Netflix executives have long said that they want to become more like HBO. These remarks have generally been seen in the context of Netflix’s original programming initiatives, but Netflix’s attempts to get onto the set-top boxes of major operators show that there is a lot more to this strategy. Netflix executives have realized that there are millions of consumers out there who won’t buy a Roku or Chromecast any time soon and feel most comfortable with the set-top box that’s already in their living room.

That’s why the company wants to be on those boxes; not just an app hidden in the menus most people never access, but right in the channel grid, next to properties like Showtime and HBO. Add a billing relationship to the mix, and subscribing to and watching Netflix may just become as easy as changing the channel to HBO, even for people who are not internet-savvy.

However, even with Netflix cozying up to cable, it wants to maintain one key difference to traditional cable channels: The company still is going to maintain the customer relationship. Consumers will be able to cancel their Netflix subscription any time on the Netflix website, and won’t be locked in to big bundles with two-year contracts.

In other words: Netflix wants to be on your cable box you’ve learned to live with, but not part of the cable bundle you hate so much.

Netflix 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.

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.

The online movie and television provider said Tuesday that details on pricing will be available later.

In the most recent quarter, subscriber growth fell short of company forecasts because of a price increase in the U.S., and Netflix is dealing with tougher competition from Amazon and Hulu. HBO is also planning an Internet package in the U.S. next year.

Shares of Netflix Inc. fell 11 cents to close at $381.03 Tuesday. The stock is up 3.5 percent this year.

Developed for WOW! by Arris, the Ultra TV set-top box integrates Netflix app into the leased boxes. WOW! subscribers will have access to Netflix as well as live TV, whole-home HD DVR, wireless home networking, and other features without the need for multiple devices, remote controls and complicated wiring.

Arris introduced its “Arris Market” platform, which blends over-the-top (OTT) content with traditional programming services on Arris’ set-top boxes, in July.

WOW! subscribers will have access to Netflix as well as live TV, whole-home HD DVR, wireless home networking, and other features without the need for multiple devices, remote controls and complicated wiring.

Netflix members can tap into instant access to Netflix’s full streaming lineup of commercial-free TV shows, movies, and original series such as “Orange is the New Black” and “House of Cards.”

“We are excited to bring Netflix to our WOW! Ultra TV customers and improve how they experience the service,” said WOW! CEO Steven Cochran. “We’re continuously adapting our product offerings to serve the evolving needs of our customers. Simplifying access to Netflix content was highly requested by our Ultra TV customers and a natural next step for WOW!.”

WOW! said the Netflix service would soon be available to Illinois Ultra TV customers who subscribe to Netflix, and by early 2015 to WOW! customers in Evansville, Ind.; Columbus and Cleveland, Ohio; and southeast Michigan. Customers can also sign up for Netflix through the new app.

Netflix also counts Atlantic Broadband, Cogeco, GCI, Grande Communications, RCN and Suddenlink Communications among its cable customers.

WOW! has been a member of Netflix’s Open Connect network for more than a year. Open Connect, which was launched two years ago, is Netflix’s private content delivery network that uses edge caching to more efficiently deliver Internet services to customers.

The deal is a promotional offer, which means that BT is jacking up rates after six months, but it’s still noteworthy because BT andNetflix are doing something that the streaming company hasn’t been able to do in the U.S. just yet: Customers pay for the Netflix part of the bundle through their monthly BT bill, much like a cable subscriber would pay for HBO in the United States. However, the difference is that Netflix still maintains the customer relationship, which makes it possible for consumers to cancel their service through the Netflix website at any time.

Netflix CEO Reed Hastings has long said that he wants Netflix to become like HBO before HBO can become like Netflix, and this kind of operator billing relationship could be the next step to this goal. Netflix has also been working on getting its app included on TV service operators’ set-top boxes, and the company has been striking more complex deals with operators across Europe, so we should see more of these deals coming to additional countries soon.

A couple of years ago, Francois Hollande’s government appointed Pierre Lescure to lead a vast industry mission to amend Hadopi, the anti-piracy law implemented by former president Nicolas Sarkozy. But since releasing his report in May, nothing has been done with regards to piracy.

While Hadopi hasn’t been scrapped, its one sanction, which suspended offenders’ Internet subscriptions after three warnings, was removed in July.

“Piracy is (thriving) in France, and the fact that the government has not been punishing it more severely for the last two years is definitely feeding the beast,” says Vincent Grimond, president and co-founder of Wild Bunch, which owns FilmoTV, France’s first SVOD service.

Meanwhile, local VOD outfits have been plagued by the proliferation of Popcorn Time, a free, open-source app available for Windows, Mac and Linux, that lets users stream the latest movies in high resolution. It has been deemed illegal pretty much everywhere in the world, including France, and has had to move its servers a couple of times.

“Popcorn Time is a business killer for everyone involved in VOD,” Grimond says. “It’s got a terrific catalog, subtitles in nearly every language, and it’s untraceable.”

The strict window release schedule is another obstacle to fighting piracy in France. Movies can’t get on VOD services earlier than four to six months after the theatrical release, and have to wait 36 months to roll on SVOD. Discussions to bring the SVOD window down to 22 months have stalled due to the fierce opposition of exhibitors and TV groups such as Canal Plus that invest in films and are therefore entitled to a window of exclusivity 10 months after the theatrical release.

“These VOD windows are the Guantanamo of movies,” says Pascal Rogard, managing director of the Society of Authors, Composers and Directors. Rogard says he has submitted to the government a proposal to allow Canal Plus to show movies six months after their theatrical rollout. In exchange, Canal Plus would greenlight the distribution of movies on VOD before the current four-to-six-month time period.

Grimond says the real problem of the current window release schedule is the “one-size-fits-all” mandate that goes with it. “In the U.S., where the schedule of releases is negotiated contractually between the distributors and the exhibitors, the outcome remains similar to ours, but the system is flexible enough to allow for some highly successful experiments, such as the recent day-and-date release of ‘Snowpiercer’ by TWC-Radius.”

Meanwhile, with Netflix on everyone’s radar, French players have been lobbying the government and the European Commission to give the U.S. service the same tax rate and investment quotas as local VOD platforms in order to create a more even playing field.

The battle has been half-won: Starting next year, all VOD services distributing content in France will have to pay the same value-added tax of 19.6% on VOD sales regardless of where they’re based.

But Netflix, which is headquartered in Luxembourg, is still not obligated to invest 15% of its revenues in European films and 12% in French ones as every local service with annual revenues exceeding €10 million ($12.6 million) does.

However, the real issue is not just to have Netflix buy more French content, says Florence Gastaud, managing director of ARP. “ISP platforms today have tremendous power, and we need to make sure groups like Bouygues and Orange, which will soon start distributing Netflix, will reference properly French content on the service and maximize its exposure.”

Chris Libertelli, Netflix’s head of global public policy, will be on hand at the confab to discuss open networks and network neutrality, a subject that will undoubtedly heat up the debate.

As Gastaud points out: “The digital space is still a no-man’s land when it comes to regulations.”

The question is: for how long?

Netflix announced two groundbreaking pacts in short order: the first with Imax and the Weinstein Co. to fund and simultaneously release a sequel to martial arts classic “Crouching Tiger, Hidden Dragon” online and in select theaters in August 2015; followed by a four-picture deal with Adam Sandler.

The surprise moves by the Los Gatos, Calif.-based company could have repercussions for cinema operators and traditional business practices among Hollywood’s major studios, exhibitors and top creative talent.

“They’re very important, game-changing announcements,” says Cinedigm CEO Chris McGurk. “Audiences today don’t care about the old rules of the studio and entertainment business. They want to see films when they want, how they want and on whatever device they want.”

For decades, Hollywood has thrived on a model with clear delineations between a film’s release in theaters, on homevideo, television, and now, digital platforms. But windows are collapsing — perhaps more quickly than anyone thought, if Netflix’s brazen deals are any indication.

“The glory days of DVDs and Blu-rays are gone,” says producer Ashok Amritraj, Hyde Park Entertainment topper. “We had a very happy time for quite a while with those separate windows, each one having its own revenue stream.”

So-called day-and-date movie releases aren’t new — “Margin Call” and “Arbitrage” are two of the more successful titles that premiered simultaneously in theaters and via on-demand platforms. But because of exhibitor backlash and the fear of leaving money on the table, such releases have been primarily the domain of smaller films from indies like IFC, Magnolia and Radius-TWC.

What’s different about the pictures under Netflix’s new deals is that they are mainstream vehicles — particularly the Sandler movies — which have essentially opted to forgo a theatrical release to tap into the streamer’s burgeoning 50 million worldwide audience of subscribers.

But in doing so, Hollywood players like the Weinstein Co. and Sandler may be sacrificing more than ticket sales: They could also be disrupting the economic ecosystem of film, since library content devalues more rapidly when it is made available on Netflix, where it can be streamed endlessly.

“The reordering of windows is what will produce a different economic outcome,” says Josh Grode, partner and co-chair of the transactions group of law firm Irell & Manella. “You are able to take a lot of costs out of the first cycle; the unknown is the revenues that will be generated.”

With the publicity garnered by original series “House of Cards” and “Orange Is the New Black,” Netflix already has disrupted the TV business. It has spurred networks to order shows straight-to-series, while altering the way that viewers consume programs by offering them in one binge-inducing full-season package.

Netflix’s incursion into movies could be just as disruptive, predicts BTIG Research media analyst Rich Greenfield: “This is a meaningful change in Hollywood’s structure. It’s changing the process.”

Netflix can be expected to set aside budgets of more than $50 million for “Crouching Tiger 2” and each of the Sandler movies in the pipeline, Greenfield estimates: “These are significant bets. These are not made-for-TV movies. They didn’t chintz going into the TV business.”

Theater owners have circled the wagons, with the four biggest U.S. chains — AMC, Cinemark, Regal and Carmike — saying they will refuse to show “Crouching Tiger” on their Imax screens.

But in a sense, Netflix also is responding from a defensive posture in tapping Sandler to be the public face of its experiment in filmmaking. Like rival HBO, Netflix must give its users a reason to shell out $7.99 (or $8.99) for a subscription on a monthly basis. Sandler’s recent films may have struggled at the box office, but his older efforts are among the most-viewed by Netflix users around the world, and they cater to a very different demo than its other original programs.

Netflix is “chasing a world where it’s hard to get premium and exclusive content,” according to a talent agency exec. “They see an opportunity with a star who may not be as bankable as he once was, but who does have a demographic of tens of millions of people who want to watch him.”

Under Netflix’s arrangement with Sandler, his Happy Madison Prods. will work with the SVOD provider to develop the movies, the first of which could arrive in 2015. It’s clearly a deal that may spark interest from other industry players. With a roughly $27 billion market cap, Netflix appears ready to offer stars big paydays — the kinds of checks many are no longer receiving from studios. Moreover, Netflix has an incentive to pay top dollar for recognizable franchises, given its eagerness to plant a flag in original movies.

“It’s a shot across the bow, but out of Netflix’s $3 billion in (annual) content spending, it’s not that giant a bite,” says Larry Tanz, CEO of Vuguru, the digital entertainment studio backed by Michael Eisner’s Tornante Co. “It makes sense they would not take a TV-only strategy.”

As a data-driven company, Netflix can plot how many people will watch its original movies, and it wants a mix of critic-friendly titles as well as popular fodder along the lines of Sandler’s oeuvre. And, as a global distributor, Netflix needs content that “can play in Cannes and Kansas and Canada and Cologne,” Tanz says.

It’s not clear how great a long-term threat Netflix’s moves pose. But the furious reaction from exhibitors to “Crouching Tiger” indicates the sector thinks it’s necessary to pull out the heavy artillery.

“Exhibition has taken a position, and the question is, how long can they hold on,” says a high-level studio executive. “Any time we’ve tried to be innovative, they’ve taken a consistently hard line. There’s a generation of kids who are used to seeing whatever they want to see on whichever screen. There’s no question there will be evolution.”

Studios, which still show their costly tentpole movies through exhibitors, will have to proceed carefully. That limits their ability to experiment with alternative release strategies via specialty labels they own, such as Focus Features and Fox Searchlight; the blow-back from theater owners could have ramifications for the next “Fast & Furious” or “X-Men” film.

In the short term, any experimentation on the studio side may be postponed because of the glut of big releases scheduled to hit theaters in 2015 and 2016 — years that will see new installments in the “Star Wars,” James Bond, “Batman” and “Jurassic Park” franchises.

That may let Hollywood incumbents kick the can down the road for now. But as Netflix challenges the industry’s long-held practices, theater chains and studios alike must decide if they’re onboard with the new approach. “If talent wants to be on Netflix, and the theaters don’t want to show it — too bad for the theaters,” Greenfield says.

Netflix is giving its Internet video subscribers a more discreet way to recommend movies and TV shows to their Facebook friends after realizing most people don’t want to share their viewing habits with large audiences.

Until now, Netflix subscribers linking the service to their Facebook accounts automatically disclosed everything they were watching with a potentially wide-reaching range of people. The company believes the open-ended approach discouraged most Netflix subscribers from connecting their accounts with their Facebook profiles.

The automatic disclosures will end Tuesday as Netflix Inc. embraces a new system that empowers subscribers to select which friends will receive their video recommendations. A menu of friends culled from Facebook will appear after Netflix subscribers finish watching a video if they have turned on the sharing feature.

The move reflects Facebook’s evolution into a service where people have allowed passing acquaintances into their networks, along with close friends and family.

“There are a lot of people on Facebook that you don’t really know that well,” said Cameron Johnson, Netflix’s director of product development.

Netflix believes people will share their viewing experiences if they are given more control over who sees what they’ve been watching. The Los Gatos, California, company, in turn, hopes the recommendations will deepen subscriber loyalty and attract new customers.

“If you are really moved by a piece of content and you know someone in your life that would like it, you are going to want them to watch it too, so you can talk about it and get excited about it together,” Johnson said.

Netflix began offering the Facebook sharing option to subscribers outside the U.S. in 2011. U.S. subscribers got that option 18 months ago.

The Facebook recommendations are limited to subscribers of Netflix’ video-streaming service, which costs $8 or $9 per month in the U.S. The streaming service has 50 million subscribers worldwide. There are no plans to extend the Facebook recommendations to the DVD-by-mail service, which is steadily shrinking. Netflix ended June with 6.3 million DVD subscribers, less than half the number it had three years ago.

The recommendations made under the new sharing system will appear in a few ways.

If both people are Netflix subscribers who have connected to Facebook, the recommendation will appear as a marquee attraction at the top of the recipient’s Netflix page. The Facebook profile picture of the person touting the video also will appear alongside the recommendation.

A subscriber’s recommendation will be sent as a Facebook message if the recipient isn’t a Netflix subscriber or hasn’t connected a Netflix account to Facebook.

The recommendations will no longer appear on the customers’ Facebook profile page or the news feeds that their friends see.

To make it possible for its U.S. subscribers to share what they’re watching, Netflix had to persuade lawmakers last year to revise a 1988 law that banned the disclosure of video rental records without a customer’s written consent.

Time Warner confirmed the deal happened in June and the implementation has been rolling out this month. The interconnection doesn’t come as a huge surprise given that Netflix has signed agreements with Comcast, Verizon and AT&T in the last few months after fighting with the providers directly and through its transit providersLevel 3 and Cogent.

That fighting unfortunately left consumers caught in the middle between Netflix and ISPs as the quality of their video streams suffered and both Netflix and ISPs blamed each other. While Netflix has signed these paid peering agreements with ISPs, it is still arguing before the FCC and in the court of public opinion that these agreements violate the spirit of network neutrality.

Netflix originally tried to address peering issues by offering ISPs access to its own content delivery network called OpenConnect. It signed deals with some U.S.-based and a number of international ISPs that led to Netflix deploying caching boxes inside the ISPs’ networks. But the major U.S. ISPs argued that Netflix was avoiding paying for the burden its traffic put on their networks and said they didn’t want to support different servers for every different internet service on the market, despite already hosting servers for sites such as Google, Facebook, Amazon and Microsoft in many cases.

However, apparently Apple, as it is building out its own content delivery network, has signed paid peering agreements with ISPs, perhaps marking a shift in how the big content companies and ISPs will broker traffic going forward.

Meanwhile, the FCC is gathering data on these deals, so we may see them quietly eliminated, continue as before but now with tacit FCC approval, or perhaps regulated depending on what it discovers. I’m just eager to see the data about end-to-end broadband quality make its way to the consumer.

Because over the top services are so fragmented, there’s a lot that could go wrong. It would be nice to get an understanding of what’s happening between my television and the Netflix server.

Updated: I removed the traceroute, because it was truncated. I’ll replace it with a complete one when I get one showing the direct hops again.

The film, about the battle to protect a national park in the Democratic Republic of Congo, will make its debut on Netflix this year. It follows a team of park rangers at Virunga National Park that includes a former child soldier, a caretaker for orphan gorillas and a Belgian conservationist. The group fights to save the Unesco world heritage site from armed militia, poachers and others as a rebellion breaks out across the country.

“Virunga” premiered at the Tribeca Film Festivalin April, where it was nominated for the Best Documentary Feature prize.

Netflix is pouring $3 billion into content this year and is steadily expanding its roster of original programing to lure subscribers. At the same time, Netflix is charting an international expansion as its streaming business in the United States matures.

While the company has received much attention for its scripted programs, including “House of Cards” and “Orange Is the New Black,” it has also picked up a series of documentaries. Those include “Mitt,” about Mitt Romney’s presidential aspirations, and “The Square,” about the Egyptian revolution.

The documentary push at Netflix comes as a range of outlets, including Time Warner’s CNN and Amazon, also increase their offerings in the category.

Netflix does not release specific audience figures, but executives said the documentaries generated “good sized” audiences, leading the company to seek out more of the genre.

Of particular interest are cause-related documentaries with messages that will resonate globally, said Lisa Nishimura, vice president of original documentary and comedy programming at Netflix.

In addition to “Virunga,” Netflix has picked up “E-Team,” about human rights workers, and “Mission Blue,” about the oceanographer Sylvia Earle. Terms of the deals were not disclosed.

“We are really free from the constraints that other platforms have,” Ms. Nishimura said. “How many people in the world really get to go to Sundance?”

Filmmakers say part of Netflix’s appeal is that it promotes the stories to its base of more than 50 million global members all at once. (Traditional distribution models generally require that filmmakers strike deals market by market and place huge emphasis on exclusive festivals and opening weekends.)

Instant global distribution is important to filmmakers with an urgent message, said Joanna Natasegara, the producer of “Virunga.” In addition, the titles will be available on the service in perpetuity, allowing audiences to grow over time.

“I can be talking about this film for the next couple of years, and boom, there it is,” said Fisher Stevens, director of “Mission Blue.” “It is just getting more and more subscribers and more and more eyes on it every day.”

Netflix recently announced that it ended its second quarter with more than 50 million subscribers worldwide, 13.8 million of which are outside of the United States. The streaming service stopped breaking out numbers for individual international markets some time ago, and a spokesperson declined to comment on the report when contacted for this story.

This means that those Digital TV Research numbers are really just estimated guesses, but there are some reasons to believe that the overall ballpark is about right: The report indicates that Sweden is Netflix’s fourth-biggest market with 900,000 subscribers, and Sweden’s consumers are likely more inclined to pay for online media subscription services because Spotify paved the way for this kind of business model. Netflix’s smallest markets continue to be in Latin America, where Netflix admitted in the past that billing has proven to be more challenging than elsewhere, but the whole region is now contributing close to 2.5 million subscribers, according to the report.

In preparation for its European expansion, Netflix is readying a monumental amount of bandwidth in France.

Netflix has built the capacity to provide 1 Tbps of bandwidth in the Telehouse-owned Voltaire data center, where it can interconnect with several of France’s leading ISPs. The capacity it has is equivalent to the capacity needed by a medium-sized ISP that serves about 5 million end subscribers. It’s more than SFR and cable operator Numéricable each have, but not as much as Free, France’s second largest ISP.

Netflix is using both Arista and Juniper gear according to a tweet from Temkin:

We’ve covered a bit about how Netflix architects its Open Connect CDN service that it uses to directly serve traffic to ISPs if they elect to link up with a box or put one inside their network. Because Netflix streams can result in so much traffic, the company is trying to ease the burden of bringing it from its AWS servers right to the ISP’s door. Yet, still ISPs may have to upgrade their last mile networks to handle the massive influx high-Netflix demand can generate.

That and the potentially competitive nature of Netflix’s service for ISPs that also provide a video bundle is leading to friction between the service and ISPs in the U.S. Given how Free and other French ISPs have tended to react to YouTube and Cogent over peering disputes, I imagine Netflix will face similar fights in France later this fall.

Updated: This story was corrected on July 23 to reflect the fact that Netflix is providing its capacity as opposed to buying it.

But the bigger growth story was once again international for Netflix: The company added 1.12 million subscribers in its international markets, compared to 610,000 a year ago, and now has 13.80 million subscribers abroad, up from 7.75 million a year ago.

On the financial front, Netflix ended the quarter with $1.34 billion in revenue from all parts of its business, including the slowly-fading DVD business. In Q2 of 2013, it generated $889 million in revenue. Net income was also up, to the tune of $71 million, compared to $29 million in Q2 of 2013.

But the quarter everyone really was looking to as a comparison was the third quarter of 2011. Back in summer of 2011, Netflix announced that it was splitting its DVD and streaming business, effectively doubling the price for members who were using both. The result was a disastrous quarter. For the first time in its history, Netflix lost subscribers (810,000, to be exact), which was followed by further bad news in the following quarters.

So why is this relevant today? Because Netflix announced its first price increase since the 2011 debacle with its last earnings in April. This time around, the company grandfathered existing subscribers into the old price, reducing the risk of mass cancellations. However, the fact that the company also saw 1.69 million new subscribers across its domestic and international markets also shows that the moderate price increase — new members pay $9 instead of $8 per month for the company’s most popular plan — didn’t really discourage many to sign up. Or as CEO Reed Hastings and CFO David Wells put it in their earnings letter to shareholders:

“There was minimal impact on membership growth from this price change. “

Other highlights from the shareholder letter, which the company frequently uses to announce new initiatives:

• Netflix will introduce in-store gift cards in the U.S., Canada, Mexico and Germany later this fall. This should help the company reach consumers without access to credit cards.
• The decline of Netflix’s DVD business is actually slowing: The company still has 6.3 million DVD subscribers. 391,000 cancelled their DVD subscription this quarter; in Q2 of 2013, 475,000 members said goodbye to the physical disc.

Slingshot’s global mode is essentially a VPN, meaning that it reroutes any traffic through servers situated in other countries. Slingshot subscribers using global mode may look like they’re located in New York as opposed to Auckland.

Netflix and other media services tend to block visitors from markets they’re not operating in due to licensing restrictions, and Netflix in particular serves up different content even in its active markets, giving users in Canada access to other titles than users in the U.K. Internet users from outside of the United States have for some time circumvented these kinds of restrictions through paid VPN services, but this may be the first time that an internet provider is offering this kind of circumvention as part of its regular service.

Anyone using this type of VPN likely violates the terms of of service of a streaming site, which is why Slingshot coyly suggests that the service is just for customers who happen to house international visitors:

“We don’t want your guests being treated like second-class citizens just because they are staying in New Zealand. Instead, we want them to have the same rich online experiences as they do in their own country. Global Mode lets them access their favourite international sites and services from your home broadband connection.”

Like it’s been in other cases in which operators offer integrated access to Netflix on leased TiVo boxes, Midcontinent and GCI customers must subscribe separate to its TiVo DVR offer and the Netflix subscription streaming service.

Midcontinent, which serves more than 300,000 customers in parts of North Dakota, South Dakota, Minnesota and Wisconsin, **began to roll out its TiVo offer last April**.

GCI, Alaska’s largest cable operator with 118,000 basic video subscribers with about 66,900 taking a digital video tier, **announced** the addition of TiVo earlier this month. GCI was the **first North American cable operator to offer the TiVo platform on Pace-made XG1 HD-DVRs**outfitted with six tuners and a built-in DOCSIS 3.0 cable modem.

Other U.S. TiVo MSO partners that provide access to Netflix in leased boxes include Suddenlink Communications, Atlantic Broadband, Grande Communications and RCN. In those cases, the MSOs have assigned Netflix a **virtual “channel” on the linear IPG lineup** that tunes the user to the Netflix experience when selected, in addition to providing access through TiVo Central. Google Fiber, which currently offers broadband and pay TV services in parts of Kansas City and Provo, Utah, allows its subscribers to**link their Netflix accounts to the Google Fiber TV box**.

Overseas, Virgin Media of the U.K. and Com Hem of Sweden have integrated Netflix on TiVo-powered devices. Danish triple-play service operator Waoo! has also completed an integration that provides access to the Netflix app on leased set-top boxes made by AirTies that run middleware from Nordija.

The firm has a massive terabyte per second of bandwidth on hand in France to support anticipated demand, though Netflix has strong competition from the likes of CanalPlay, which has a partnership with HBO.

Also on Monday, Netflix revealed a deal with local ISP Bouygues Telecom, which will see it offer “unlimited access” to its video-on-demand services through Bouygues’s set-top boxes from November.

As its European operations are based in Amsterdam, Netflix gets to sidestep requirements for 40 percent French-originated content, though it has commissioned a local drama series called Marseille.

Forty-seven percent of all U.S. households subscribe to Netflix, Hulu Plus, Amazon Prime or a combination of these services, and 49 percent of all households have at least one TV connected to the internet, according to a new study from theLeichtman Research Group about emerging video services. Four years ago, only 24 percent of all households had an internet-connected TV.

That combination of connected TVs and internet video subscriptions is increasingly shaping what we are watching. Forty-nine percent of all Netflix subscribers watch online video programming on a connected device every week, compared to only eight percent of viewers who don’t subscribe to Netflix. And 78 percent of all Netflix subscribers watch their videos on a TV.

Thirty-four percent of the people quizzed for this study said that they watch online video every day, and 61 percent do so every week.

The big and hotly debated question is once again: What effect does all of this have on cable TV? Netflix CEO Reed Hastings has said time and again that his company’s service is complementary to, and not replacing, traditional pay TV — but the Leichtman Research numbers seem to suggest that is is starting to change: In 2010, 88 percent of Netflix subscribers also had pay TV. Fast forward to 2014, and that number is down to 80 percent.

At the same time, the number of cord cutters who also subscribe to Netflix is rising, from 16 percent in 2010 to 48 percent in 2014.

Leichtman’s numbers are echoed by a recent Consumer Electronics Association(CEA) study about the market for U.S. television services. 45 percent of all U.S. TV households watch internet content on their TVs, according to that study. The use of internet TV programming steeply increased from 28 percent in 2013.

Only five million U.S. TV households rely exclusively on internet TV, according to the CEA, but 10 percent of all TV households said that they’re likely to cancel that service in the next 10 months. Altogether, a total of 17 million TV households already don’t subscribe to traditional pay TV, but instead rely on antennas, the internet or a combination of both for TV programming.

Verizon sent Netflix a letter Thursday demanding that the online streaming giant cease and desist what it claims to be unfair business practices that threaten its broadband business.

The letter comes soon after Yuri Victor of Vox Media **tweeted a screenshot of a Netflix browser message** that read: “The Verizon network is crowded right now. Adjusting video for smoother playback…” Netflix chief communications officer Jonathan Friedland later **noted in a tweet** that the OTT video provider is “always testing new ways to keep members informed, and **told Re/code** that the new tactic is ISP agnostic, and not directed only at Verizon, calling it a “test that advises members when their network is congested…We’ll see whether they think it is valuable or not.”

Randal S. Milch, EVP-public policy & general counsel for Verizon, in the cease and desist letter addressed to Netflix general counsel David Hyman, claimed: “There is no basis for Netflix to assert that issues with respect to playback of any particular video session are attributable solely to the Verizon network. As Netflix knows, there are many different factors that can affect traffic on the Internet, including choices by Netflix in how to connect to its customers and deliver content to them, interconnection between multiple networks, and consumer-in-home issues such as in-home wiring, WiFi, and device settings and capabilities.”

Milch likewise blamed Netflix for electing to send its traffic over congested routes, labeling its accusations on last-mile ISPs for being solely responsible for service issues as “self-serving, deceptive, inaccurate and an unfair business practice.”

The Verizon exec also claimed that “Netflix’s false accusations have the potential to harm the Verizon brand in the marketplace…The impression that Netflix is falsely giving our customers is that the Verizon network is generally “crowded” and troublesome. This could cause a customer to think that any attempted viewing of video, whether it be from Hulu, YouTube or other sites, would yield a similarly “crowded” experience and he or she may then choose to alter or cease their use of the Verizon network.”

In addition to demanding that Netflix stop posting similar notices to users on the Verizon network, the telco also demanded that Netflix, within five days, provide Verizon with “any and all evidence and documentation that it possesses substantiating Netflix’s assertion to Mr. Yuri Victor that his experience in viewing a Netflix video was solely attributable to the Verizon network.”

Verizon, he added, could “pursue legal remedies” if Netflix fails to provide this information.

Milch also questioned Netflix’s behavior in the wake of a paid interconnection between the two companies **announced in April**. “I sincerely hope this is not a harbinger of things to come in terms of now Netflix treats its network partners and our mutual customers,” Milch wrote.

Update: Netflix issued this statement in response to the cease-and-desist letter: “This is about consumers not getting what they paid for from their broadband provider. We are trying to provide more transparency, just like we do with the Netflix ISP Speed Index, and Verizon is trying to shut down that discussion.”

Netflix has said it reluctantly agreed to deals with Verizon and Comcast in order to ensure the quality of its streaming service while complaining that they are **tantamount to an “arbitrary tax” on Netflix** and other OTT services. Netflix’s actions also come as the company urges the FCC to pursue “stronger” network neutrality rules and to include paid peering agreements into the scope of the rule-makings discussions.

Dan Rayburn, EVP for StreamingMedia.com and a principal analyst at Frost & Sullivan, shed more light on Netflix’s methodology for this recently introduced tactic Wednesday in this **blog post**, noting that Netflix told him that it’s rolling it out in phases, and will display the messages whether or not they have a paid or free direct connection with the ISP.

Netflix told Rayburn that messages will be sent to subscribers when they are streaming from an ISP/designated market area pair where:

1. The average bitrate is poor (SD)
2. There is high congestion (the ratio between peak and trough traffic is abnormally compressed)
3. Netflix sees a high percentage of sessions with a rebuffer, then the player displays the warning during the initial buffering at play start

But he added that Netflix may modify its criteria for when it sends the on-screen indicator as it expands the rollout and learns more.

The new PricewaterhouseCoopers (PwC) Entertainment and Media Outlook 2014-2018 report shows that revenue from online video services is set to overtake box office revenue in 2018. The report actually predicts that box office sales are going to slightly grow this year to $11.4 billion, up from $10.8 billion in 2013, and after being more or less flat since 2009. PwC predicts that box office revenue will keep an annual growth rate of 3.1 percent in the coming years, which means that people will spend $12.5 billion on movie tickets in 2018.

But revenue from subscription video services like Netflix in particular is growing at a much faster rate, from $3.3 billion in 2013 to a projected $10 billion in 2018. Add transactional video services like iTunes and Google Play, where you pay to rent or buy a digital copy of a movie or TV show, and you arrive at a total of $14 billion in revenue in 2018.This growth is offsetting the declines Hollywood is seeing with physical media. PwC is predicting that the revenue from rentals and sales of DVDs and Blu-ray discs will decline from $12.2 billion in 2013 to $8.7 billion in 2018.

The “opportunity is more limited than many realize,” the analyst wrote, noting that infrastructure and affordability issues will limit Netflix in markets such as Latin America.

But the forecast still seems to present some pretty big numbers. “Assuming generously that Netflix deploys aggressively in 17 new countries over the next 2-3 years, we believe that by 2023 the number of broadband households in these markets with fixed connections capable of supporting SVOD will reach 243M,” Kirjner suggested.

He also sees Netflix reaching about 65 million international subs, or roughly a 50% share of the research firm’s estimated international SVOD market, but only “if it deploys service very aggressively across all 17 incremental countries in our assumptions.”

That’s a sizable jump from where Netflix is today internationally, with 10.9 million subs. While 14% of that total comes from the U.K. and Ireland, and 25% from Canada, Netflix, to Kirjner’s earlier point, has only been able to scratch together about 1.5 million customers in Latin America (1% of total households), despite having launched there more than two and a half years ago.

He also believes that Canada is Netflix’s sole profitable international market. Netflix’s international business posted first quarter loss of $35 million on revenues of $267 million. Netflix told investors that its international division was on a path to achieve profitability this year, but noted that European expansions will keep the unit operating at a net loss throughout the rest of 2014.

Even with some tempered expectations in a few challenging international markets, Kirjner still raised his 12-month target price on Netflix to $260, valuing company’s international opportunity at roughly $140 per share, its domestic business at $100 per share, and its DVD business at $20 per share.

“Upon launch, broadband users in these countries can subscribe to Netflix and instantly watch a curated selection of Hollywood, local and global TV series and movies, including critically-acclaimed Netflix original series, whenever and wherever they like on TVs, tablets, phones, game consoles and computers.”

The announcement didn’t really come as a big surprise to anyone who has been following the company. Netflix announced last that it was planning a significant expansion into Europe in 2014, and there have been hints that the service would be coming to Germany and France ever since.

One of the details not mentioned in the announcement was the actual launch date. Netflix said only that it will reveal further details “ including pricing, programming and supported devices” in the coming months, but there have been reports that the launch will happen in September.

This will be Netflix’s first major international expansion in two years. The company launched the UK and Ireland, Denmark, Finland, Norway and Sweden in 2012, but only added the Netherlands to that list in 2013. By year’s end, Netflix is going to be available in 47 countries around the world.

Netflix CEO Reed Hasting said during an investor call last year that he believes that Netflix will eventually make 70 to 80 percent of its revenue in markets outside of the U.S. During its most recent quarter, subscription fees customers in international markets made up for 25 percent of Netflix’s revenue.

International expansions are coming at a cost for Netflix, as the company needs to spend money for local content and advertising. However, strong international growth has helped Netflix to offset some of those costs in recent months, and executives said during the company’s most recent earnings call that they expect Netflix to be profitable in existing international markets by the end of the year.

“Our intent is to continue to expand the content library,” CFODavid Wells said at Tuesday’s J.P. Morgan Technology, Media and Telecom Conference.

Wells added that going forward, Netflix will focus on expanding the breadth of content by adding more originals as well as curated four- and five-star offerings, and making content more exclusive.

He also pointed out that every time Netflix announced a new deal, the company had seen an increase in the hours of programming viewed.

Wells added, though, the company is focused on both adding content and increasing its revenue margin.

Our intent is to continue to grow content but to also grow margin, so to grow content spend slightly slower than revenue,” Wells said. “Look, we’re committed to margin expansion … but we’re also committed to making a great long-term product. And if we think, opportunistically, something comes along or we get creative on some piece of content, we’re willing to have margins be flat for two or three quarters and do something that’s going to strengthen our content offering.”

He noted that this was Netflix’s approach both in the U.S. and overseas but declined to reveal details about Netflix’s plans for European expansion, saying that such information would be revealed over the next few weeks.

Wells also commented on subscriber reaction to the company’s recent price hike, saying the reception was “generally as expected. We were somewhat pleased. We expected a small reaction, and I think we’ve gotten that so far.”

reiterated Netflix’s opposition to Comcast’s pending acquisition of Time Warner Cable.

The streaming service is less concerned with AT&T’s bid for DirecTV, Wells said.

We’re mostly concerned about consolidation on the broadband side, not necessarily on the video side,” he said.

he added that AT&T’s talk of rolling out broadband to an additional 15 million subscribers with its DirecTV purchase seemed like a potential benefit for Netflix.

Suddenlink follows a trio of other TiVo customers (RCN, Grande Communications, Atlantic Broadband)**who recently announced they’d be doing the same**.

Suddenlink eclipses each of those three as the largest U.S. cable operator to provide its customers direct access to Netflix through the same STB they already use to watch television.

Suddenlink was the first cable operator to begin offering TiVo digital video recorders (DVRs) integrated with Suddenlink’s on-demand library and using TiVo’s user interface, search and discovery functions.

The operators expects to make the Netflix app available starting this summer.

“This agreement is a great example of how the cable industry can work with Internet content providers on innovative solutions that benefit consumers,” said Suddenlink Chairman and CEO Jerry Kent. “Importantly, we will be delivering Netflix to our customers with the superior quality of high-speed Internet connections that tend to be the fastest and highest-ranked in the communities we serve.”

In its ISP Speed Index, Netflix consistently rates Suddenlink among the top broadband providers for Netflix streaming during primetime, the operator noted.

The three are the first U.S. MSOs to directly integrate Netflix with their traditional services. European operators Virgin Media and Com Hem were the first to do so.

Bill Holmes, head of business development at Netflix, said all three are not only delivering Netflix directly through their set-tops, but they have also established direct network connections with Netflix.

These three cable companies are leading innovators,” Holmes said, “offering more choices and a great experience to their customers. Not only are they the first U.S. cable providers to offer Netflix on their set-top boxes, they have also directly connected their networks to Netflix, enabling a better viewing experience with faster startup times and superior image quality.”

Netflix recently entered an agreement to pay Comcast for a direct network connection. The result has been that Comcast subscribers are now getting better, more reliable connections.

Customers of Atlantic Broadband, Grande and RCN will still need a separate subscription to Netflix, but they will be able to access Netflix in addition to live/linear TV, on demand, and other web content through their TiVo set-tops, rather than having to go through a separate device (streaming video boxes, Blu-ray players, game consoles, etc.).

Customers can use their TiVo DVR to easily search, browse and view Netflix’s commercial-free content.

“Now, watching Netflix is as easy as changing the channel,” said David Isenberg, chief marketing and strategy officer, Atlantic Broadband. “The ever-expanding selection of titles on Netflix is a tremendous complement to Atlantic Broadband’s existing portfolio of Live TV, HD channels and On Demand programming. Integrating the world’s leading Internet TV network with the world’s best DVR platform underscores our commitment to delivering customers what they want — instantly.”

The dynamics of this game-changing relationship are clear: more choices for the viewer via a simple, unified device,” stated Jim Holanda, chief executive officer at RCN and Grande Communications. “RCN and Grande Communications continue an unrelenting focus on delivering the best viewing experience for our customers through smart partnerships, innovation and superior Internet speeds of up to 110Mbps. The ability to seamlessly deliver new volumes of entertainment through industry leaders Netflix and TiVo is yet another way we are providing the best in customer convenience and satisfaction.”

first announced last year that it plans a major expansion into continental Europe in the second half of 2014, but the company hasn’t said yet which countries it is targeting for that expansion, or when exactly it wants to launch.A Netflix spokesperson declined to comment when asked about this latest report, but the information unearthed by Curbed matches chatter I have been hearing about Netflix buying advertising in anticipation of a launch in Germany.

And in January, Netflix was looking to fill spots on its European PR team, with applicants being told that “Dutch, the Nordic languages, German and French are a plus.” Netflix launched in the Nordic countries in 2012, and expanded to the Netherlands in 2013.

Netflix may be looking to continental Europe for some of its planned international expansions in 2014: Netflix executives met with the staff of France’s president this week to discuss the regulatory environment in the country, and its impact on a possible launch of the company in France, according to a Reuters report. Netflix executives apparently also visited Germany and other countries on their trip to Europe.

Netflix CEO Reed Hastings said in a recent letter to investors (PDF) that he sees “a big international opportunity for Netflix,” and added on the company’s most recent earnings call that Netflix could generate as much as 80 percent of its total revenue outside of the U.S. in the future.

Netflix is now available in Canada, most of Latin America, the U.K. and Ireland, the Netherlands, Finland, Norway and Sweden. In 2014, the company plans to expand into multiple international markets, with Hastings saying that Netflix “definitely will be looking at some larger expansions.”

German and France make sense as targets for Netflix; the company already offers a French-language product to serve customers in Canada, and both Germany and France are huge broadband markets. However, regulatory challenges could complicate a launch in France in particular. Current rules mandate that movies can’t be available on on-demand markets until three years after they show up in theaters, according to Reuters.

A Netflix spokesperson declined to comment when contacted for this story.

Will the moribund home entertainment sector actually finish 2012 up over 2011?

Year-over-year growth in Hollywood’s “homevid” business hasn’t happened since George W. Bush was midway through his second term, with the market following the inexorable decline of DVD. But on Sunday, studio-backed research firm the Digital Entertainment Group released data showing that the U.S. home entertainment industry is up 1.4 percent through the first six months of the year.

The digital side of the business generated $2.4 billion during this period, according to the DEG, a 78 percent uptick. Leading the way has been subscription video on demand, which the group says has spiked in revenue by 430 percent for the first six months to $1.1 billion.

With Netflix reporting $1.04 billion in U.S. streaming revenue during the first two quarters, it’s easy to tie this metric to Los Gatos, Calif. Yes, it’s all true you — the company with the cratering stock price has turned the home entertainment business around.

Other research groups, including IHS Screen Digest, have suggested that the SVOD market will never replace DVD sales as a profitability driver, given the vast difference between margins. At least in the short term, however, SVOD is generating real revenue.

Revenue from electronic sell-through (i.e. downloads on iTunes and Amazon) in the U.S., the DEG also notes, was up 22 percent to $329.4 million.

The overall disc business keeps declining, with sales of physical video media dropping 3.6 percent to $3.7 billion during the six-month period and disc rentals declining 26 percent to $2.3 billion.

However, the kiosk rental business, led by Redbox, is still expanding nicely — it was up 23% to $990 million, according to DEG.

Cheerleading a bit for the studios’ pet initiatives, the DEG also says that U.S. consumer spending on Blu-ray was up over 13 percent (but it didn’t release a revenue figure).

DEG also claims that the major studios’ cloud initiative, UltraViolet, has now signed up 4 million users. While still underwhelming, that represents an acceleration of growth, with the Wal Mart-backed UltraViolet group reporting 3 million users as recently as early June.

After CEO Reed Hastings took to Facebook this week to tout Netflix’s achievement, analysts said the service had surpassed any individual TV network in homes with Netflix.

But that’s assuming Netflix is more akin to MTV or Discovery Channel than Comcast or Time Warner Cable. “Netflix clearly isn’t a cable network; it is more of an MSO,” Janney Capital Markets analyst Tony Wible said, using industry jargon for cable and satellite TV services. That means it’s paying many networks for the right to show subscribers their content -- not simply tearing eyeballs away without any compensation.

TV on the whole continues to dominate. People watch more than five hours of traditional TV a day each month, Mr. Wible said, citing Nielsen research. Netflix’s billion hours of streaming content works out to about 80 minutes of viewership per day on the platform, he said. And that’s for Netflix subscribers, not the much larger pool of traditional TV viewers.

“If you look at it this way, that 1 billion is not nearly as big a number,” Mr. Wible said.

Mr. Hastings’ announcement could still be a warning for advertisers and ad-supported TV. “While it is true that we have not yet seen dramatic ‘cord-cutting’ of cable-TV subscriptions as a result of Netflix usage, cord-cutting is likely going to grow in popularity as Netflix usage continues to grow,” Wedbush analyst Michael Patcher said in an email.

“More importantly, hours spent watching Netflix without commercials cannibalizes hours spent watching commercial-sponsored television, meaning that overall ratings for commercial television shows will (and likely have) suffered,” he said. “This, in turn, will lower the advertising rates commercial advertisers are willing to pay to the television networks, cutting into their television profits.”

The average cable bill is $86 monthly, according to a study published by the NPD Group in April. Netflix charges just $7.99 per month for streaming.

According to Mr. Pachter, this means Netflix customers pay a little less than 23 cents per hour for content without commercials, while cable-TV subscribers pay around 56 cents per hour for programming with advertisements.

“The message to advertisers is there is a continued risk to ratings, and as a result, to advertising revenue,” Mr. Wible said. “Networks will become more desperate to sell digital rights to make up for this advertising shortfall.”

Animation and kids programming are most at risk, Mr. Wible noted, while sports is the most immune.

But programmers should be figuring the impact on their ad model into their pacts with Netflix. And Pivotal Research analyst Brian Wieser believes the situation is less dire than it seems.

“As a practical matter I don’t believe that Netflix is substantially cannibalistic across the entire population,” he wrote in an email. “Consumption of ad-supported video is generally still rising, so it’s more likely than not that Netflix leads to incremental viewing of non-ad-supported video. To that end, while good news for Netflix will lead many observers to talk further about the ‘death of TV,’ it’s really more about ongoing growth of video given an expanded range of choice of video for consumers.”

“It’s not in the short term, but it’s in the natural direction for us in the long term,” said Hastings, speaking at the Morgan Stanley Technology, Media and Telecom Conference in San Francisco Tuesday. “Many (cable service providers) would like to have a competitor to HBO, and they would bid us off of HBO.”

Hastings continued to identify HBO’s Go on-demand service—as well as the cable industry’s larger TV Everywhere model—as Netflix’s top competition, and he continued to downplay the emergence of what he called “copycat” competition in the video streaming business from companies like Amazon. ‘It’s very easy for companies to over-estimate copycat competition and not see the real threat,” said Hastings, who cited the example of now-defunct internet-browsing pioneer Netscape. “You go back to 1995, and you talk to the Netscape sales force and ask them what their No. 1 competition is, and they’d say Spy Glass, which was taking a little market share from them at the time. But the real competition was Microsoft and bundling.

As cable-based content providers like HBO continue to evolve their products for an on-demand, multi-device world, Hastings said Netflix’s innovation must be focused on them. “That’s part of the reason why do original content,” he said. “That hedges us against that longterm TV Everywhere threat.”

Hastings made his remarks on the same day that HBO revealed that Go will be available on Xbox Live starting April 1, thus offering users of Microsoft’s video programming service a premium option to Netflix when it comes to getting movies and TV shows piped in on-demand into their living rooms. The move will coincide with the season premiere of the HBO hit Game of Thrones.

Netflix confirmed its first move into Europe on Monday, six years after shelving previous plans to launch in the UK.British and Irish film fans will be able to subscribe to Netflix for a monthly fee — probably about �5 a month — to rent an unlimited number of TV shows and movies to stream online. The company did not reveal exact pricing for subscribers.

Netflix is the most popular film subscription website in the US, with more than 25 million users in its domestic market, Canada and Latin America.

Since it launched in 1997, Netflix has delivered DVDs by post as well as allowing viewers to stream films online. Netflix will offer online streaming only in the UK and Ireland, it is understood.

The UK launch will put Netflix in direct competition with Amazon's LoveFilm, which has more than 1.6 million subscribers in the UK and Europe, and Google-owned YouTube, which launched film rentals for British users earlier this month.

Netflix charges US users $7.99 (�5) a month to stream an unlimited number of films and TV hits, including Mad Men and The Walking Dead. LoveFilm has five different price models, ranging from �4.99 a month to �19.39 a month, based on how many DVDs users want to rent at the same time.In the US, Netflix has increasingly moved to compete with the large TV networks, including CBS and Fox, by acquiring the rights to high-quality drama such as Kevin Spacey's House of Cards directly from producers and distributors, meaning they can be aired in the so-called "first-run window".

Some US broadcasters responded to this new competition by hiking the prices of their licensing deals with Netflix, meaning some films including The Social Network have had to be pulled from the streaming site.

A tumultuous year for Netflix shares has wiped $7bn off the company's market capitalisation since early April, to $5.7bn on Monday.

The Netlfix chief executive, Reed Hastings, reversed the company's much-criticised plans to split its DVD-by-post and online streaming service into two separate companies earlier this month. In September, Hastings apologised on the company's official blog for the way it handled a rise in subscription prices that prompted a backlash from some users.

But perhaps not as impressive as the 80 million the major cable companies boast as a collective. That figure could explain why Starz walked away.

“For now, they may be in a better position to make Starz money than Netflix is — even if Netflix reportedly offered more than $300 million per year for Starz content,” Dan Frommer writes.

In the coming months, we will see if Starz made the right call.

What does this mean for Netflix? Foremost, it is adding a huge new potential user base to its market demographic. Technology and content companies that do well in the era of Web 2.0 have significant sources of traffic in international markets, such as Facebook and Twitter which both have 70% or so of users overseas. The move will further cement Netflix as a go-to source for streaming content on the Web. With all the competition in that area, that will be huge for Netflix going forward.

Since 2006, Mashery has managed the APIs for more than 100 brands such as The New York Times, Netflix, Best Buy and Hoovers. Powering the more than 10,000 apps built upon these APIs, Mashery enables its customers to distribute their content, data or products to mobile devices and web mashups.

The biggest thing that Netflix can do for itself is to make the company an invaluable resource to movie studios. The more users that Netflix can generate, the more likely it will be able to sign content partnerships with the major studios at terms that are favorable to Netflix. In turn, that will enable Netflix to provide its service at its current rate ($7.99 a month to start) without having to jack up rates to afford content licenses.

We have contacted Netflix about which countries are specifically included in the Latin America and Caribbean rollout and will update this post if/when the company responds. The prize of the region would be Brazil, a country that is rapidly developing a first-world economy and sparking technological innovation. Brazil has 15 cities with a population greater than 1 million and a total population of 190 million, the majority of which speak Portuguese. If Netflix is not coming to Brazil in this expansion, it is laying the groundwork to debut in the country by providing streaming services in Portuguese.

“Netflix members in the U.S. and Canada have really taken to watching instantly and we feel great about being able to offer the same combination of convenience, choice and value to people in Mexico, Central America, South America and the Caribbean,” wrote Jessie Becker, VP of marketing for Netflix, in a blog post.

It is telling that South America is mentioned by Becker with no specific mention of Brazil. It also looks like Netflix will offer streaming-only in its expansion. The logistics of DVDs by mail to 43 countries across a large geographic region is a cost that Netflix would probably like to avoid.

NEW YORK - Facebook has been in talks with Netflix and others about integrating video and other content into the social networking site, the //New York Times// reported Friday.

In a presentation at the eG8 technology conference in France this week, Facebook CEO Mark Zuckerberg mentioned Netflix, whose CEO is Reed Hastings, as one of the companies his team has held discussions with.

The talks are part of a broader plan by Facebook to develop features that will allow users to share their favorite TV shows, news, music and other media. Playing social games and sharing photos are already popular activities on the social networking site.

Facebook would not license content itself, but use the content licensed by its partners. Citing people involved in the negotiations, the Times said Facebook’s media partners would have a part in a continuous feed that would display the songs, videos and other media that a user is consuming.

The company is, for example, in discussions with several online music services, such as Spotify, to develop a feature that would display a user’s most-played songs and let friends hear them, the Times said.

“Listening to music is something that people do with their friends,” Zuckerberg said in France, according to the Times. “Music, TV, news, books - those types of things I think people just naturally do with their friends. I hope we can play a part in enabling those new companies to get built and companies that are out there producing this great content to become more social.”

Facebook did not comment on its plans further, the Times said.

In a statement, the company only said: “We’re always looking for better ways to help people discover the most relevant content on Facebook, but have nothing to announce.”

Last year, Facebook was in discussions with Apple about adding social features to iTunes, but the talks broke down.

“I am certain of one thing, and that is cable companies and pay-per-use broadcasters are shaking in their boots for sure,” analyst Mark Tauschek of Info-Tech Research Group said Wednesday.

“Netflix is just so cheap, it’s hard for them to compete with that, he said, adding that similar providers like Hulu will eventually make their way into Canada.

While companies such as Astral , Bell and Rogers are putting content across TVs, computers, smartphones and tablets, Netflix is doing that and more, Tauschek said from London, Ont.

Netflix also allows access to its service through popular game consoles that hook onto televisions.

“I can get it on my Wii, I can get it on my Xbox, I can get it on my Apple TV, I can get it on my computer, I can get it on my iPad, I can get it on my iPhone for $8 a month when I am paying over 100 bucks a month for cable. It will be increasingly compelling when they get more content.”

Netflix recently inked a deal with Paramount Pictures to show all of its first-run films in Canada — content that typically would have been seen on Montreal-based Astral’s Movie Network and Movie Central operated by Toronto’s Corus Entertainment (TSX:CJR.B) pay TV services.

RBC Capital markets analyst Drew McReynolds said Astral and Corus’s loss of Paramount to Netflix opens the door to more competition from these web-based services.

“Although the loss of Paramount is not without precedent for Astral and Corus (precedents have included Twentieth Century Fox and Warner Bros.), the consequence is now allowing new ‘over the top’ services a stronger foothold in Canada,” McReynolds wrote in a research note.

McReynolds said the movie studio’s pricing likely scotched the deal.

“We understand that pay television operators Astral and Corus did not agree with Paramount on pricing and other terms during recent re-negotiations and thus dropped the studio from the pay line-up.”

In the near-term, the impact of services like Netflix on the Canadian television system won’t affect companies’ earnings, McReynolds said, but in three to seven years, they will likely affect margins and in seven to 10 years would become a “legitimate” substitute for cable and satellite TV.

McReynolds lowered his share price target to $45 from $46 for Astral, and to $26 from $27 for Corus.

Astral TV president John Riley said Astral’s Mpix movie channel will continue to offer older Paramount titles.

“The number of new titles that a given studio produces in a year is relatively small, particularly in this case,” said Riley, president of Astral Television Networks.

Current Paramount films include “True Grit” and “The Fighter.” About 350 Paramount films will eventually be added to Netflix.

Riley said competition for movie and TV shows is constant and he doesn’t believe deals like Netflix will result in fewer subscribers to Astral’s pay TV service, which has about two million subscribers for the Movie Network and French language Super Ecran.

“As long as we continue to provide a top notch product and make it available to everyone and every platform, it will remain an attractive offering,” Riley said from Toronto.

“What I think differentiates us is exclusivity,” he said, referring to HBO and Showtime series that air on the Movie Network.

U.S.-based Netflix announced this week that it has made changes to its streaming service so that Canadian subscribers would use less data, due to caps put in place by Internet service providers. It now has a subscriber base of more than 500,000 Canadians.

Bell executive Mirko Bibic said now that Netflix is getting access to exclusive content, it’s competing with broadcasters.

“If they can offer this first-run content on an exclusive basis, why shouldn’t they contribute to Canadian cultural objectives like the rest of us do?” asked Bibic, referring to contributions to Canadian content and independent programming.

“I think the arrival of Netflix and how they’ve evolving their business model certainly raises a number of issues which we’re all going to have to grapple with as an industry,” said Bibic, senior vice-president of regulatory affairs.

Netflix moving in to fund content directly is a fairly radical step, even though Sarandos played that down in an **interview** today with All Things Digital. Sarandos called the deal “traditional in its windowing, it’s just that Netflix owns the first window.”

The show itself is a political drama starring Kevin Spacey, an American adaptation of a British novel of the same name that explores U.K. politics at the end of the Thatcher era. The British novel focuses on a politician trying to climb up the ladder and become the next Prime Minister, and the American version will feature Spacey as a U.S. politician aiming to become president. Fincher-directed content and films starring Spacey have both done well on Netflix, Sarandos noted.

Sarandos mentions in a **post** on the Netflix blog about the deal that one-hour serialized dramas, as a format, have become a “very important part of the Netflix experience.” Shows like Heroes, Lost, Dexter, and Weeds have all done well. Netflix has made a point of acquiring streaming rights to as many of those shows as it can, and has had success in doing so—”with the exception of HBO,” writes Sarandos

The development of the service has taken longer than expected because it has involved negotiations with several potential go-to-market partners, according to Coinstar CEO Paul Davis, speaking at a Feb. 16 analyst day. Coinstar is Redbox’s parent company.

“So we could have moved a lot quicker quite a few months ago had we decided to do this on our own,” Davis said, according to a transcript of the presentation. “But we made a conscious decision as a team to not do it on our own because the price tag of doing that was prohibitive. We also didn’t feel like we could have an offering working on our own that would distinguish ourselves and be a real winning proposition.”

Davis did not disclose which companies Redbox has been approaching about a partnernship.

Separately, Amazon.com reportedly is readying a service that would stream 5,000 movies and TV shows members of its $79-per-year Prime free-shipping membership program.

Redbox is a wholly owned subsidiary of Coinstar. The Oakbrook Terrace, Ill.-based company claims to have rented more than 1 billion DVDs to date through vending machines at about 24,900 U.S. locations nationwide, including select McDonald’s, Wal-Mart Stores and Walgreens locations.

“We’re very confident that the brand can extend into [Internet streaming] given our position,” Davis said at the analyst event.

Netflix, which offers more than 20,000 selections available to stream online to more than 200 devices, had about 20 million subscribers at the end of 2010

Want more movies? Go for Netflix, which has deals with Starz and Epix, among others. Want more current primetime TV? Try Hulu Plus, unless you’re a big CBS fan; the broadcast nets there are from JV partners News Corp. NBC Universal and Disney. Want a deep selection of movies and a full palate of primetime? Even combining the two won’t get you there.

The new Netflix pitch: Watch TV and movies instantly on the internet—or pay $2 more for a “broader selection” selection. Netflix is now “primarily a streaming video company delivering a wide selection of TV shows and films over the Internet,” CEO Reed Hastings said in the announcement, adding: “Today’s action reflects the tremendous customer value we’ve injected into streaming from Netflix, our initial success with a pure streaming service in Canada for $7.99 a month and what our U.S. members tell us they want.”

The explanation for the price drop: no mail costs. The new unlimited plan rates now range from $7.99 to $55.99 for 8 DVDs at a time, a hefty price increase of about 17 percent.

In a Netflix blog post, Jessie Becker, VP of Marketing, explained why there is no DVD-only plan:

The fact is that Netflix members are already watching more TV episodes and movies streamed instantly over the Internet than on DVDs, and we expect that trend to continue. Creating the best user experience that we can around watching instantly is how we’re spending the vast majority of our time and resources. Because of this, we are not creating any plans that are focused solely on DVDs by mail.

10/5/10

As a result of the agreement, Netflix said it expects to stream five to 10 more movies each year within a few months of the films’ DVD releases. Nu Image/Millennium is known for its big-budget action films and thrillers, such as The Expendables and Brooklyn’s Finest.

In July, Netflix announced a similar deal with independent film financing and production company Relativity Media, whose recent productions include Despicable Me and Get Him to the Greek. The company also reached an agreement to stream films from major studios Paramount Pictures, Lionsgate Entertainment and MGM.

Netflix allows consumers to stream films through television sets by using the XBox 360, PlayStation 3 or Nintendo Wii, on computers or on mobile devices using apps for the iPad, iPhone and iPod Touch.

The four-year agreement includes streaming rights to a number of television series including Nip/Tuck, Veronica Mars, Pushing Daisies and Terminator: The Sarah Connor Chronicles. Netflix had already announced an earlier agreement with Warner Bros. Home Entertainment involving access to new release titles on DVD and Blu-Ray. That agreement makes new release titles available to Netflix 28-days after a title’s release.

The player is simple to install, easy to use and gives Netflix members instant access to more than 10,000 movies and TV episodes.

“We’re excited to bring the first Netflix ready device to the market,” said Anthony Wood, CEO and founder of Roku. “The seamless integration of the Netflix service into our player has resulted in true ease of use for the consumer. Now, streaming video isn’t limited to people sitting in front of the PC; it’s ready for the TV in the living room.”

“The key breakthroughs of The Netflix Player by Roku are simplicity and cost,” said Reed Hastings, chairman and CEO of Netflix. “First, it allows consumers to use the full power of the Netflix Web site to choose movies for their instant Queue, and then automatically displays only those choices on the TV screen. That’s a major improvement versus the clutter of trying to choose from 10,000 films on the TV. Second, there are no extra charges and no viewing restrictions. For a one-time purchase of $99, Netflix members can watch as much as they want and as often as they want without paying more or impacting the number of DVDs they receive.”

• TV (www.i.tv) today announced the integration of Netflix, the world’s largest online DVD and media rental service, into its popular TV and movie guide for the iPhone and iPod touch. i.TV gives media consumers up-to-date, local TV and movie listings based on customizable profile settings. Listings include rich information about programing, celebrity photos, biographies, show synopses, ratings, and reviews. Community features allow users to write reviews, rate their favorite shows and recommend shows to friends via an email alert. In addition to this, i.TV delivers media content directly to the end user in the form of movie trailers, television previews, and now DVD and movie rentals from Netflix.
• Click here for full article
• Update: Netflix is currently using Microsoft Silverlight for “cross-platform and cross-browser” media delivery on both PC’s and Mac’s. Note: Silverlight works with Intel Macs only.
• Click here for original article announcing Netflix’s plans.
• TiVo and Netflix announced a partnership to instantly stream movies and TV episodes from Netflix directly to the TV through TiVo DVRs
• Click here for full article.

UPDATE: NETFLIX is aggressively growing its Watch Now program and are sometimes paying advances for films that track well on their site. They will add titles to their Watch Now that they already have on DVD and their flat fee offers for the Watch Now service are based on the performance of the DVD generally. There are no overages or revenue sharing yet. But the films on Watch Now are not tagged with ads. Netflix continues to expand the platforms that they service with films for their subscibers. They offer films on XBOX, the Roku box, all Bluray players, and soon iTV and they keep expanding devices. Content is only available to Netflix subscribers.

Netflix's strong suit is that it already has the technology, experience and distribution deals in place to stream movies and TV episodes, said analyst Tim Bajarin.

"One of the things (Hollywood) studios are coming to grips with is that DVD sales, especially through retail, are declining," said Bajarin, principal analyst with Creative Strategies Inc. of Campbell. "The distribution of movies over the Internet is going to increase."

Amazon and Netflix officials declined to comment on the rumors. Bajarin also noted there was speculation that Microsoft or Google might make a better partner for Netflix, which has more than 10.3 million subscribers. They rent about 2.2 million DVDs each day online and receive them in the mail, bypassing retail outlets like the once-mighty Blockbuster.

Netflix offers more than 100,000 movies and TV episodes in standard or Blu-ray discs. But since 2007, it has also been expanding its catalog of 12,000 titles available for instant online viewing.

Streaming deals

It has secured deals to stream content to a TV monitor hooked to a variety of Internet-connected devices, including Microsoft's Xbox 360 game console, TiVo, a Roku video player and new Blu-ray players from Samsung and LG.

Netflix hasn't announced how much streaming video it serves up. However, Microsoft said in February that Netflix members streamed 1.5 billion minutes of content on the Xbox 360 in the first three months the service was available.

Last week, Netflix said Sony will make streaming available on Internet-ready Bravia TVs. Vizio will have similar models for sale this fall.

Meanwhile, rival Blockbuster announced this week that its on-demand service will be integrated into new Samsung HDTVs and Blu-ray players this fall. That service is powered by digital streaming firm CinemaNow Inc., which was bought in December by Novato's Sonic Solutions Inc.

CinemaNow has 2,500 movie, TV and music video titles and plans to expand to 10,000 by September. It also has partnerships with Dell, EchoStar Communications, Hewlett-Packard, Microsoft, Pioneer, Samsung and TiVo.

"We're seeing a real land rush as every consumer electronics maker wants to stake out their territory," said Mark Ely, Sonic vice president for strategy. "Every device manufacturer we talk to has connected services on their road map, if not for Christmas this year, then for the early part of 2010."

Timing not right

Bajarin said an Amazon-Netflix hookup "could be dynamite and the only competition would be CinemaNow." But the timing for such a deal might not be right for another six to 18 months, he said.

Netflix spokesman Steve Swasey said the firm believes DVD rentals will continue to grow for the next four to nine years and remain strong for another 10 to 15 years. Meanwhile, the company will expand its digital streaming business to be ready for that transition.

"Our strategy continues to be providing great movies and TV episodes to people in whatever format they want to watch them on," he said.

Netflix stock closed Monday at $41.84, a 4 percent jump, after the Amazon rumor surfaced. Shares closed Thursday at $44.13, nearly 60 percent higher than its low point of $17.94 in October.