Money makes the world go round: A blog about the business and culture of all things entertaining in the world of theater, television, film, music, art, gadgets, gizmos and other life necessities (and probably other things, knowing myself)

Tuesday, November 30, 2010

A Race to Dominate Television Market

First, we saw newspapers across the country frantically come up with innovative alterations to stay afloat financially and now online options are blurring the lines for another traditional medium: television.

As online services offer more flexibility in scheduling and prices, the race in the home television market no longer is the playing field merely between cable and satellite television. Among the most popular competitors include Netflix, Hulu and even Microsoft. 

Netflix recently acquired new deals with NBC Universal, Twentieth Century Fox and Warner Bros to cast their footsteps on the video streaming market. The Los Gatos, California-based company offers a $7.99 per month option allowing subscribers to watch unlimited television episodes and movies streamed into a computer or television set.

To officially shift their focus from DVD rentals to primarily video streaming, Netflix has raised prices on their DVD rental plans, increasing prices by $1 on their two most popular plans: the one and two-DVD rental at-a-time option.

Netflix experienced their fourth consecutive quarter of acquiring more than one million additional subscribers and shares have increased by 200 percent since the beginning of the year.

The company reported a net income of $37,967 million, or $0.70 per diluted share, at the end of their third fiscal quarter ending on September 30, 2010. The numbers represented a significant growth in the company compared to a net income of $30,141 million, or $0.52 per diluted share, from the same quarter of the previous year.

Netflix ended the third quarter with approximately 16,933,000 total subscribers, a 52 percent growth compared to 2009.

Similar to Netflix being fundamentally known as the internet movie provider, Hulu Plus is known as the internet television provider and their new $10 per month option offers subscribers the ability to watch episodes from current and past popular television series on ABC, NBC and Fox.

Even the world’s largest software company – Microsoft – can’t keep away from the enticing market; its latest move uses the Xbox game console’s internet and streaming capabilities for access to CBS, ESPN, CNN and Fox. With 25 million subscribers worldwide, Xbox Live currently has more subscribers than Comcast.

The race to be the first to successfully place software in television sets across America has hit cable service providers hard. Between July and September of this year, Time Warner Cable experienced a loss of 155,000 subscribers, a 41.3 percent increase compared to a loss of 64,000 subscribers during the same period the previous year.

During the third quarter of this year, U.S. cable companies experienced the largest decline since 1980 with the loss of 741,000 basic subscribers, according to research by SNL Kagan.

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