 | |
| Type | Public (NASDAQ: NFLX) |
|---|---|
| Industry | Electronic commerce |
| Founded | 199 |
| Headquarters | Los Gatos, California, U.S. |
| Area served | United States, Canada |
| Key people | Reed Hastings, co-founder and CEO Barry McCarthy, CFO, Secretary Leslie J. Kilgore, CMO |
| Products | Online DVD and Blu-ray Discrental, proprietary MicrosoftVC-1 video download |
| Revenue | ▲ US$1.67 Billion (FY 2009) |
| Operating income | ▲ US$192 Million (FY 2009) |
| Net income | ▲ US$115.8.0 Million (FY 2009) |
| Total assets | ▼ US$680 Million (FY 2009)[ |
| Total equity | ▼ US$199 Million (FY 2009)[ |
| Employees | 2000+ (2009) |
| Website | http://www.netflix.com/ |
Netflix, Inc.,
The Netflix, Inc., often just Netflix, (NASDAQ: NFLX) is a company that offers online flat rate DVD and Blu-ray Disc rental-by-mail and video streaming in the United States and Canada (streaming only in Canada).
The company was established in 1997 and is headquartered in Los Gatos, California. It started its subscription service in 1999. In 2009 it was offering a collection of 100,000 titles on DVD and surpassing 10 million subscribers. On February 25, 2007, Netflix announced the billionth DVD delivery.
Netflix Services,
Netflix is a subscription-based movie and television show rental service that offers media to subscribers via Internet streaming and via US mail,.
Netflix Disc rental,
The discs are returned to Netflix in the same envelopes in which they are sent to customers.
The company provides a monthly flat-fee service for the rental of DVD and Blu-ray movies. A subscriber creates an ordered list, called a rental queue, of movies to rent. The movies are delivered individually via the United States Postal Service from an array of regional warehouses. Currently, there are more than 100 shipping points located throughout the United States. The subscriber can keep the rented movie as long as desired but there is a limit on the number of movies (determined by subscription level) that each subscriber can have on loan simultaneously. To rent a new movie, the subscriber must mail the previous one back to Netflix in a prepaid mailing envelope. Upon receipt of the disc, Netflix ships the next available disc in the subscriber's rental queue.
Netflix offers several pricing tiers starting at US $4.99 per month for one disc at a time and a limit of two per month. Netflix also offers gift subscriptions for various rental tiers.
Since November 21, 2008, Netflix has offered their subscribers access to Blu-ray Discs for an additional fee, depending on subscription package. The fee for this service increased on April 27, 2009.
In addition to its movie rental service, Netflix formerly sold used movies. The purchase was delivered via the same system and billed using the same payment methods as rentals. This service was discontinued at the end of November 2008.
Starting January 6, 2010, Netflix reached an agreement with Warner Brothers Pictures to delay renting new releases for 28 days from their retail release in an attempt to help studios sell more physical media at retail outlets. A similar deal with Universal Studios and Twentieth Century Fox was reached on April 9, 2010.
Internet streaming
Netflix offers Internet video streaming ("Watch Instantly") of selected titles to computers running Windows or Mac OS X and to compatible devices. Internet video streaming comes at no additional charge with Netflix's regular subscription service, however only a limited portion of Netflix's content is available via the "Watch Instantly" option.
In its simplest form, video is streamed to the user using standard PC hardware, and requires Microsoft's Silverlight software to be installed. Viewing is initiated by pressing a "Play Instantly" button, and played back on the PC monitor. Films can be paused or restarted at will.
Netflix does not support playback on Linux PCs although the Linux-based Roku devices are supported. In a TechRepublic interview in August 2010, Netflix's VP of Corporate Communications stated that available Silverlight plugins for Linux, such as Moonlight, do not support the PlayReady DRM system that Netflix requires for playback.
Technically, the system streams videos in VC-1 format at lower or similar qualities than that available on DVD-Video (typically affected by the user's broadband bandwidth, and more often by the processing power of their computer if using the newer Netflix player and Microsoft Silverlight versions).
Initially, the feature offered subscribers one hour of media for approximately every dollar they spent on their subscription. (A $16.99 plan, for example, entitled the subscriber to 17 hours of streaming media.) In January 2008, however, Netflix lifted this restriction. Virtually all subscribers now are entitled to unlimited hours of streaming media at no additional cost. Subscribers with a plan of $4.99/two DVDs per month, one DVD at a time, are allowed two hours which can only be watched on a computer. The new terms of the service are a response to the introduction of Apple's new video rental services.
Currently the Watch Instantly service features more than 17,000 movies and recorded television shows. Major studios including NBC Universal, MGM, 20th Century Fox, CBS/Paramount, ABC-Disney, Warner Brothers, Lions Gate Entertainment and New Line Cinema distribute films and television shows via the service. On October 1, 2008 Netflix announced a partnership with Starz Entertainment to bring 2,500+ new movies and television shows to Watch Instantly in what is being called Starz Play.According to CEO Reed Hastings, the Watch Instantly feature will become available to users outside of the United States during the second half of 2010.
In August 2010, Netflix announced it had reached a five-year deal worth nearly $1 billion to stream movies from Paramount, Lionsgate and MGM. The deal increases the amount Netflix spends on streaming movies annually. It spent $117 million in the first six months of 2010 on streaming, up from $31 million in 2009. This deal adds roughly $200 million per year.
Netflix Profiles,
In June 2008, Netflix announced plans to eliminate its online subscriber profile feature that fall. Profiles allow one subscriber account to contain multiple users (e.g. husband and wife, or two roommates) with separate DVD queues, ratings, recommendations, friend lists, reviews, and intra-site communications for each. Netflix contended that elimination of profiles would improve customer experience.However, likely as a result of negative reviews and reaction by Netflix users, Netflix reversed its decision to remove profiles eleven days after its announcement. In announcing the reinstatement of profiles, Netflix defended its original decision, "Because of an ongoing desire to make our website easier to use, we believed taking a feature away that is only used by a very small minority would help us improve the site for everyone." Then explained its reversal, "Listening to our members, we realized that users of this feature often describe it as an essential part of their Netflix experience. Simplicity is only one virtue and it can certainly be outweighed by utility,."
Netflix Device support,
Netflix Hardware supported,
Netflix Instant Watch Devices,
Apple iPad, iPhone, and iPod Touch, Apple TV
Boxee Box set-top box (announced)
Insignia Blu-ray Disc players and home theater systems
LG Electronics Blu-ray Disc players, TVs (LH50 series LCD and PS80 plasma), and home theater systems
Microsoft Xbox 360 http://www.msnbc.msn.com/id/25680004/
Nintendo Wii
Panasonic Blu-ray Disc players and home theater systems
Philips Blu-ray Disc players and TVs
Popbox set-top box (announced)
Roku set-top box
Samsung Blu-ray Disc players and home theater systems
Seagate FreeAgent Theater+ HD Media Players
Sony Blu-ray Disc players, TVs, and PlayStation 3
TiVo DVRs (HD, HD XL, Series3™, Premiere and Premiere XL boxes),
Netflix Viewsonic VMP75,
Netflix Vizio Blu-ray Disc players and TVs,
Netflix Western Digital WD Live plus Media Player,
Netflix Software support,
Netflix Supported Web Browsers by Platform,
Windows. Windows XP Service Pack 2, Windows Vista, Windows 7 running Internet Explorer 6 (or higher) or Firefox 2 (or higher). New viewer requires use of the Microsoft Silverlight technology and a 1.2 GHz CPU.
Mac OS X. An Intel-based Mac with OS 10.4.8 or later. Browser support is Safari 3 (or higher) or Firefox 2 (or higher). Mac Netflix was added October 27, 2008, which requires use of the Microsoft Silverlight technology,.
Netflix Other software options,
Boxee OS X and Windows versions only (beta)
Windows Media Center Vista and Windows 7 Media Center capable versions only
PlayOn Windows, from MediaMall, used with UPnP clients such as PlayStation 3, Wii and,
Netflix XBMC Media Center,
Plex media center for Mac OS X only, using the Netflix plug-in from their App Store,.
MediaPortal Windows using the My Netflix plug-in,.
Netflix Video game consoles,
At E3 2008, Microsoft announced a deal to distribute Netflix videos over Xbox Live, This service was launched on November 19, 2008 to Xbox 360 owners with a Netflix Unlimited subscription and an Xbox Live Gold subscription allowing them to stream movies and TV shows directly from their Netflix Instant Queue from an application on the Dashboard.
In October 2009, Sony Computer Entertainment and Netflix announced that the service would also be available on the PlayStation 3 from November 2009. The set-up will be similar to that on the Xbox 360, allowing Netflix subscribers to stream movies videogames and TV shows from their Instant Queue to watch on the console. Unlike on the Xbox 360, the Netflix application will be available on a Blu-ray disc initially (available free to subscribers) but it is expected that a downloadable application will be made available in the future. Also, as the PlayStation Network only has a single, free level of membership, users do not have to pay for use of the service other than the initial Netflix subscription. Netflix CEO Reed Hastings hopes to bring streaming movies to the PS3, Wii and Xbox 360 consoles.
On January 13, 2010, Nintendo and Netflix announced that the service would become available on the Wii in Spring 2010. The service will allow the console to stream content in a user's Instant Queue. Like the PlayStation 3, a streaming disc specifically for the Wii will be required along with an Internet connection to the console. Besides a Netflix account with unlimited streaming, there will be no additional cost for the service. In contrast to the other two consoles, the Wii is not capable of HD resolutions. The Wii streaming disk was released for testing to customers starting Thursday March 25, 2010. The disk was released to all registered Netflix members on April 12, 2010,.
Netflix Set-top boxes,
In May 2008 the first set-top-box to stream Netflix's Watch Instantly movies directly to televisions was released. The device is manufactured by Roku and provides unlimited access to the Netflix streaming media catalog for subscribers with one-at-a-time unlimited plans and above,.
Netflix Blu-ray players,
In October 2008 Netflix agreed to instantly stream movies to two of Samsung's Blu-ray Disc players. They soon after announced a partnership to instantly stream movies to TiVo DVRs,.
Netflix Televisions,
In January 2009 Netflix announced a similar partnership with Vizio and LG to instantly stream movies directly to their high definition televisions.
In July 2009, Sony announced a partnership with Netflix that will enable Sony BRAVIA Internet Platforms to access instant queues for Netflix users. Any Netflix member with an internet-enabled BRAVIA HDTV will be able to link up their account to their TV and stream videos from their queue.
All other TVs, including LCD and plasma, require connection to a desktop computer, set-top box or game console in order to view streamed content,.
Netflix Handheld devices,
In September 2009, Netflix CEO Reed Hastings expressed his desire to expand his company's video-streaming service to Apple's iPhone and iPod Touch mobile devices once the Xbox 360 exclusivity deal expires.In April 2010, the Netflix app debuted on the Apple's iTunes app store for use with the iPad. The iPhone/ iPod Touch version was released on August 26, 2010 via the App Store,.
Netflix History,
Netflix headquarters in Los Gatos,
Netflix was founded in 1997 in Scotts Valley, California by Marc Randolph and Reed Hastings, who previously had worked together at Pure Software, along with Mitch Lowe. Hastings was inspired to start the company after being charged late fees for returning a rented copy of Apollo 13 after the due date. The Netflix website launched in April 1998 with an online version of a more traditional pay-per-rental model (US $4 per rental plus US $2 in postage; late fees applied). Netflix introduced the monthly subscription concept in September, 1999, then dropped the single-rental model in early 2000. Since that time the company has built its reputation on the business model of flat-fee unlimited rentals without due dates, late fees, shipping or handling fees, or per-title rental fees.
Netflix developed and maintains an extensive personalized video-recommendation system based on ratings and reviews by its customers, similar to the system used by Amazon.com. The company believes this gives it an edge in competing with newcomers such as Blockbuster Video. On October 1, 2006, Netflix offered a $1,000,000 prize to the first developer of a video-recommendation algorithm that could beat its existing algorithm, Cinematch, at predicting customer ratings by more than 10%.
"Some 35,000 different film titles are contained in the 1 million DVDs it sends out every day.
Netflix has played a prominent role in independent film distribution. Through a division called Red Envelope Entertainment, Netflix licensed and distributed independent films such as Born into Brothels and Sherrybaby. As of late 2006, Red Envelope Entertainment also expanded into producing original content with filmmakers such as John Waters. Netflix announced plans to close Red Envelope Entertainment in 2008, in part to avoid competition with its studio partners.
Netflix initiated an initial public offering (IPO) on May 29, 2002, selling 5,500,000 shares of common stock at the price of US $15.00 per share. On June 14, 2002, the company sold an additional 825,000 shares of common stock at the same price. After incurring substantial losses during its first few years, Netflix posted its first profit during fiscal year 2003, earning US $6.5 million profit on revenues of US $272 million. The company is well-known for its worker-oriented culture, including unlimited vacation time for salaried workers and allowing those employees to take any amount of their paychecks in stock options.
Netflix has been one of the most successful dot-com ventures. A New York Times article from September, 2002, said that, at the time, Netflix mailed about 190,000 discs per day to its 670,000 monthly subscribers. The company's published subscriber count increased from one million in the fourth quarter of 2002 to around 5.6 million at the end of the third quarter of 2006, to 14 million in March 2010. Netflix's growth has been fueled by the fast spread of DVD players in households; as of 2004, nearly two-thirds of U.S. homes had a DVD player. The DVD is the most successful product in the history of the U.S. in amount of growth measured by the number of units owned in individual U.S. homes.[citation needed] Impressively the DVD only took 5 years to reach 50% entrance into U.S. homes. Netflix capitalized on the success of the DVD and its rapid expansion into U.S. homes, integrating the potential of the Internet and e-commerce to provide services and catalogs that brick and mortar retailers could not compete with. Netflix also operates an online affiliate program which has helped it to build online sales for DVD rentals,.
Netflix Sales and marketing,
The domain netflix.com attracted at least 194 million visitors annually by 2008, according to a Compete.com survey. This is about five times the number of visitors to blockbuster.com.
On March 30, 2009 Netflix announced an increase in the monthly fee it would charge to customers who rent Blu-Ray discs, from $1 a month to $2 a month.
Expansion
Netflix had preliminary plans to expand to the UK in 2004, but the expansion was cancelled as Netflix concentrated its services on the U.S. market. Zip.ca currently markets itself as a Canadian equivalent to Netflix. Posren and Tsutaya discas would be Japanese equivalents. On July 19, 2010 Netflix announced that in the fall of 2010 it will be launching its instant streaming service in Canada, making Canada the first international market expansion for Netflix. On September 22, 2010, Netflix became available in Canada for $7.99/month, but with a severely limited selection due to licensing restrictions. When co-founder and CEO Reed Hastings was interviewed regarding the lower fees for Canadian subscribers in comparison to USA, he explained "How much has it been your experience that Americans follow what happens in the world? It's something we'll monitor, but Americans are somewhat self-absorbed."
On September 23, 2010, company CEO Reed Hastings announced that Netflix aims to expand beyond the U.S. and Canadian market. "For now, we're focused on Canada," Hastings said in an interview. "If we succeed in Canada, we will certainly look at other markets,."
Competitors,
Netflix Online DVD rental,
Netflix's success has inspired a number of other DVD rental companies both in the United States and abroad, but none of the purely online companies appear to approach Netflix in terms of market share or revenues. Wal-Mart began an online rental service in October 2002, but left the market in May 2005 and now has a cross-promotional arrangement with Netflix. Netflix has also cited Amazon.com as a potential competitor, which until 2008 offered online video rentals in the UK and Germany (now sold to LoveFilm), but has remained coy about any similar intentions for the North American market.
Blockbuster Video, the world's largest in-store video rental chain, entered the U.S. online market in August 2004 with a US$19.95 monthly subscription service. This sparked a price war; Netflix had raised its popular three-disc plan from US$19.95 to US$21.99 just prior to Blockbuster's launch, but by October Netflix reduced this fee to US$17.99. Blockbuster responded with rates as low as US$14.99 for a time, but by August 2005, both companies settled at the (identical) current rates. On July 22, 2007, Netflix announced that it would drop the prices of its two most popular plans by US$1.00 in an effort to better compete with Blockbuster's online-only offerings.Blockbuster's subscriber base after one year was roughly a third of Netflix's size and growing, including promotions such as the option to swap DVDs rented online at neighborhood stores and the simultaneous elimination of late fees altogether. Netflix co-founder Reed Hastings commented in a January 2005 interview that rival Blockbuster threw "everything but the kitchen sink at us."
Many in-store video rental chains now have unlimited rental plans similar to those of Netflix. Hollywood Video started its Movie Value Pass (MVP) service in late 2004, which enables customers to rent up to three movies at a time (due in five days) for US$15 a month. New releases, however, are typically excluded from the service for two to six weeks in the MVP "Basic" plan. Blockbuster started Movie Pass in 2004, which lets customers keep two to three DVDs at a time for US$25–30 a month, without restrictions or due dates. Hollywood's MVP "Premium" plan offers the same benefits for a comparable price. Both services still require the customer to travel to the store to rent and return the movies, and their respective selections are not as diverse as that offered by Netflix.
Redbox is another competitor that uses a kiosk approach: rather than mailing DVDs, customers pick up and return DVDs at self-service kiosks located in metropolitan areas.
Netflix and Blockbuster largely avoid offering pornography, but several adult-video subscription services were inspired by Netflix, such as SugarDVD and WantedList. (However, Netflix's catalogue does include films with explicit sexual content, such as Shortbus, 9 Songs, and several movies by Jesús Franco, that are not purely targeted at sexual titillation but which have been compared to pornography.)
Legal issues and controversies
This article's Criticism or Controversy section(s) may mean the article does not present a neutral point of view of the subject. It may be better to integrate the material in those sections into the article as a whole. (July 2010)
"Recommendation Algorithm"
In 2006, Netflix held the first "Netflix Prize," competition to find a program to better predict user preferences and beat its existing Netflix movie recommendation system by at least 10%. An AT&T Research Team called BellKor combined with others to win the 2009 grand prize competition for $1 million. The winning team algorithm called Pragmatic Chaos used machine learning techniques to find that, for example, the rating system people use of older movies is very different than for a movie they just saw. The mood of the day made a difference also; for example, Friday ratings were different than Monday morning ratings.[69]
In 2010 Netflix canceled a running contest to improve the company's recommendation algorithm due to privacy concerns: under the terms of the competition, contestants were given access to customer rental data, which the company had purportedly anonymized. However, it was discovered that even this anonymized dataset could, in fact, personally identify a user. Netflix was sued by KamberLaw L.L.C. and ended the contest after reaching a deal with the FTC.[70]
"Throttling"
Chavez v. Netflix Inc.
In September 2004, a consumer class action lawsuit, Frank Chavez v. Netflix, Inc.,[71] was brought against Netflix in San Francisco Superior Court. The suit alleged false advertising in relation to claims of "unlimited rentals" with "one-day delivery." In January 2005, Netflix changed its "Terms of Use" to acknowledge what has commonly become known as "throttling". (Mike Kaltschnee, owner of the Hacking Netflix blog, says Netflix calls this practice "smoothing" internally.)[72]
In October 2005, Netflix proposed a settlement for those who had enrolled as a paid Netflix member prior to January 15, 2005. These earlier members would be able to renew their subscriptions with a one-month free membership, and those early members with current subscriptions would receive a one-month free upgrade to the next-highest membership level. Netflix's settlement denied allegations of any wrongdoing, and the case did not reach a legal judgment. Netflix estimated the settlement cost at approximately US$4 million, which included up to US$2.53 million to cover plaintiff lawyer fees. A controversial aspect of the settlement offer was that the customer's account would continue at the renewed or upgraded membership level after the free month provided by the settlement, with customers being charged accordingly unless they opted out after the month-long free period ended. After Trial Lawyers for Public Justice filed a challenge to the proposed settlement and the Federal Trade Commission filed an amicus brief urging the rejection or modification of the settlement, Netflix offered to alter the settlement terms requiring customers to actively approve any continuation after the free month. The final settlement hearing took place on March 22, 2006. but, implementation of the settlement was delayed pending appeal the California Appellate Courts. The settlement was affirmed on 2008-04-21, with the court saying, "the trial court did not abuse its discretion in approving the amended class action settlement agreement, approving the notice given to class members, or determining the amount of fees." Interestingly, the court approved email notice and an online claims submission process. The court said:
The summary notice and long-form notice together provided all of the detail required by statute or court rule, in a highly accessible form. The fact that not all of the information was contained in a single e-mail or mailing is immaterial… Using a summary notice that directed the class member wanting more information to a Web site containing a more detailed notice, and provided hyperlinks to that Web site, was a perfectly acceptable manner of giving notice in this case… The class members conducted business with defendant over the Internet, and can be assumed to know how to navigate between the summary notice and the Web site. Using the capability of the Internet in that fashion was a sensible and efficient way of providing notice, especially compared to the alternative Vogel apparently preferred—mailing out a lengthy legalistic document that few class members would have been able to plow through.
The settlement was criticized because it paid out $2.5 million to attorneys for fees and costs, while offering only coupons to the class members.
The Terms of Use have since been amended with terms that indicate such a suit would not be possible in the future:
These Terms of Use shall be governed by and construed in accordance with the laws of the state of Delaware, without regard to conflicts of laws provisions. You and Netflix agree that the United States District Court for the Northern District of California and/or the California Superior Court for the County of Santa Clara shall have exclusive jurisdiction over any dispute between you and Netflix relating in any way to the Netflix service or Web site or these Terms of Use. You and Netflix expressly and irrevocably consent to personal jurisdiction and venue in these courts. The parties agree that in any such dispute or subsequent legal action, they will only assert claims in an individual (non-class, non-representative) basis, and that they will not seek or agree to serve as a named representative in a class action or seek relief on behalf of those other than themselves.
Releasing This Week
The Netflix website at one time featured a list of titles "Releasing This Week" (RTW) that enabled customers to easily view new DVDs the company planned for rental release each week. On December 21, 2007, the company removed the link to the page without notice and replaced it with a slider system showing only four previously released movies at a time. The new page, called "Popular New Releases", does not list newly released DVDs for rental. The listing of new releases is still active,though no menu option links to the page.
On January 1, 2008, a Netflix employee unofficially stated on the Netflix Community Blog that customers used the RTW page to add newly released movies to the top of their queues, then complained about delays in receiving them after demand outstripped the supply of DVDs on hand. By removing the page, Netflix sought to quell complaints that these movies were not readily available. Critics, however, have suggested this was just another Netflix attempt at "throttling".
Dynamic queue, subscription & delivery methods
Netflix vs. Blockbuster
On April 4, 2006, Netflix filed a patent infringement lawsuit in which it demanded a jury trial in the United States District Court for the Northern District of California, alleging that Blockbuster's online DVD rental subscription program violated two patents held by Netflix. The first cause of action alleged Blockbuster's infringement of U.S. Patent No. 7,024,381 (issued April 4, 2006; only hours before the lawsuit was filed) by copying the "dynamic queue" of DVDs available for each customer, Netflix's method of using the ranked preferences in the queue to send DVDs to subscribers, and Netflix's method permitting the queue to be updated and reordered. The second cause of action alleged infringement of Patent No. 6,584,450 (issued June 24, 2003), which covers in less detail the subscription rental service as well as Netflix's methods of communication and delivery. The dispute was ended a year later, on June 25, 2007, with both companies declining to disclose the terms of their legal settlement, except for a statement by Blockbuster that it wouldn't have a major impact on its future financial performance. Blockbuster also said that the company planned to close 282 stores that year to shift focus to its online service. The company already had closed 290 stores in 2006.
In Fall 2006, Blockbuster signed a deal with The Weinstein Company, that gave it the exclusive rental rights to the studio's films beginning January 1, 2007. This agreement forced Netflix to obtain copies from mass merchants or retailers, instead of directly from the studio. Netflix has speculated that the effect of the Blockbuster-Weinstein agreement could result in higher rental costs and/or fewer copies of the studio's movies, which would limit the number of each movie's DVDs that would be available to subscribers at any one time. As of June 2007, Netflix continues to make available Weinstein movies, including Unknown, School For Scoundrels and Harsh Times, among others. The first-sale doctrine allows Netflix and other video rental businesses to offer movies released by the Weinstein Company, but the long-term effects of the Blockbuster-Weinstein deal remain uncertain.
Removal of Friends feature
Since 2004, Netflix subscribers could utilize a feature that allowed them to interact with friends who were also members. This feature was meant to tap into the growing popularity of social networking. With this feature, users could see how their friends rated a movie on that movie's page; view what DVDs their friends were renting; and allow them to leave their friends notes with film recommendations.
In March 2010, as part of a redesign of its movie-details pages, the Friends feature began to be phased out. Users could no longer see their friends' ratings on movie pages, and what remained of the friends section was moved to a small link at the bottom of each page. The initial announcement about the redesign on Netflix's official blog made no reference to any changes to the Friends feature. Hundreds of angry users posted negative comments, and the feedback prompted Netflix's Vice President of Product Management, Todd Yellin, to post a follow-up statement. While apologizing for poor communication about the changes, Yellin stated that the Friends feature would continue to be phased out, citing figures that only 2 percent of members used the feature and the company's limited resources to maintain the service.Netflix users also began using the movie-reviews section of the website to post comments protesting the changes.
Technical details
Streaming
Netflix streams HD content using Microsoft VC1AP encoding at a bitrate of between 2600kbps and 3800kbps.
"Throttling"
Netflix's allocation policy — referred to by many as "throttling" — gives priority shipping and selection to customers who rent fewer discs per month. Higher volume renters may see some of their selections delayed, routed elsewhere, or sent out of order.
Netflix currently claims that "the large majority of our subscribers are able to receive their movies in about one business day following our shipment of the requested movie from their local distribution center." However, not all shipments come from the subscriber's local distribution center, and shipments from distant centers are often delayed, as well.
Netflix API
On October 1, 2008, Netflix launched an Application Programming Interface (API).The Netflix API allows access to data for all Netflix titles as well as access on a user's behalf to manage their movie queue. The Developer Network includes a forum for asking and answering questions. The Netflix API is free and allows commercial use. A variety of services have been created around the Netflix API or have integrated the API. Examples include Rotten Tomatoes and the New York Times, which allow users to click to add titles to their Netflix queue or begin watching on Watch Instantly from their pages, and Jinni, which additionally enables search within Watch Instantly and import of some user information like reviews.
The API has allowed many developers to release Netflix applications for mobile devices. Netflix also recently announced an official Nokia app that allows some trailer streaming. An official iPhone app was released on August 26, 2010.
See also
GameFly,
(source:wikipedia)
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