Walmart offers Internet TV?

Wal-Mart acquired VuDu in February this year but nothing has changed with the service since.  But first, what is VuDu anyway?  Think Netflix.  Add recently released movies, awesome 1080p HDX quality, and true 5.1, 6.1 or 7.1 surround sound.  But subtract points because VuDu is video on demand and does not have an unlimited subscription service like Netflix.  Wait….Wait…..Wait keeping reading ….I know…. I don’t like to pay per title either ok? 

Ok, so what has changed since February?  Well if you are a follower of this blog, you may have noticed in my last post I actually took the position that Netflix raising their rates might have a positive impact to the Internet TV industry long term.  Wal-Mart appears to be taking the Netflix rate increase as an opportunity to compete more effectively.  Content is no longer as exclusive as it used to be.  Meaning, Netflix isn’t the only game in town for content owners to distribute their goods.  In sum, Wal-Mart has a massive consumer base already that is very loyal and comfortable with the brand.   Combine this fact with their ability to potentially mimic the Netflix library.  Then add to this fact that Vudu is the perfect distribution outlet.  It is proven and it works.  Now we have a major competitive threat to Netflix and consumers have another choice for Internet TV beyond Netflix, Amazon, and iTunes.

On July 26^th, Wal-Mart announced $.99 new releases available from www.walmart.com/vudu or directly from the Vudu application built into some Blu-ray and HDTV sets.  Facebook followers have the ability to vote for their picks for $.99 rentals.  This is a huge step for Vudu considering that many of their rentals have been in the $3.99 - $5.99 per rental range.  Perhaps the next step is a subscription based service which I am eager to write about sooner than later.  Let the competition begin.

Netflix price increase…good or bad thing?

A price increase is always a bad thing for consumers especially when it is going up 60% for some Netflix users.  I’m paying more and don’t like it but haven’t forgot paying $20/mo for the same service years ago and this was the mail order only.  No streaming back then.

So why is Netflix doing this anyway?  I’ve seen polls as high as 50% of current Netflix users are threating to disconnect.  The first reason why Netflix is raising rates is because of the cost of content.  According to Merriman Holdings research, Netflix paid 600 millions dollars for content last year and the cost is rising.  So to some extent, Netflix is getting much of blame for content owners raising their rates on Netflix.  

A second reason Netflix is increasing rates is due to its streaming only push.  Let’s not forget that the streaming only plan will still remain at $8/mo.  But 90% of Netflix subscribers use the streaming plus 1 or 2 DVDs out at a time.  Netflix wants more on the streaming only and less on the streaming plus DVD mailers making their company much more profitable.  Like it is doing globally.  I speculate that this free up in expense will be reinvested in content effectively allowing Netflix to enhance their streaming content which is good for end users like you and me.  (long term)

I believe this price increase will do short term harm to Netflix but have long term gain for the company.  This will make Netflix an even more viable online service for the long haul.  While I don’t like paying more starting this September, I’m glad to do so as the service is still a bargain.  Right now, I look forward to seeing Netflix enhance their streaming library.

Prediction:  Once the media hysteria calms down, Netflix will make a come back.  

Manage Netflix Video Quality

Have you logged into your Netflix account lately?  Even if you have you may not have noticed a new option called "Manage Video Quality".  Simply log in, go to your account, and you'll see this link under 'watching instantly on your TV or Computer'. 

The purpose of the 3 settings (Good, Better, Best) is to prevent a Internet subscriber from going over a limit (cap) which could cause some overage fees from ISPs like Charter or Comcast.  Today, RTC Internet does not have any caps and is truly an unlimited service provider.  Another reason to lower video quality is if you have multiple Internet devices in the home all competing against a low bandwidth connection.  If un-managed, Netflix is going to stream the video at the fastest rate (highest quality) as possible potentially slowing down other devices in the home.  So this tool could be used to manage a low speed connect.  Ideally, you would be better off calling to upgrade your speed.