Once again, Netflix CEO Reed Hastings has struck down questions that suggested the company would raise the price of its standard streaming subscription plans beyond the introductory $7.99 per month fee that’s been successful for a few years.

But if the company doesn’t raise its fees, how does it plan to make money when its content costs and customer acquisition costs continue to rise as it grows?

Well, during today’s Q1 2013 earnings call, Hastings outlined some things that the company will and won’t be doing to start making more money in the months and years ahead.

Family plans are coming

As stated in the letter to shareholders, Netflix is planning to offer a new streaming-only plan that would allow subscribers to play up to four concurrent streams of content from Netflix’s library for $12 per month. Currently, the company allows subscribers to play two concurrent streams, but for families that have four or five people sharing a single account, this definitely isn’t feasible.

While this new 4-stream plan will go into effect soon, it doesn’t look like you’ll be gaining the benefit of hosting more than a single account per subscription. That means the recommendation engine will still suck pretty badly if you’ve got four people watching wildly different things. For example, your younger kiddos are addicted to Dora The Explorer, the slightly older kid watches Adventure Time, and you’re content to only watch educational pieces and documentaries and chances are the recommendations — as well as the account’s queue — will still be pretty chaotic.

What we do know is that the ability to have separate accounts is coming at some point. The company has even beta tested the family account plans for a select number of people. We don’t really know if the pricing will be similar to the $12 plans that were just introduced or be a little more expensive, which might be worth it considering your situation.

More original content is very likely, and you won’t have to wait

With House of Cards, Hemlock Grove, and the soon to launch Arrested Development season, Netflix is importing exclusive batches of content that Amazon and Hulu won’t get for years, if at all. The purpose is to bring in new customers and retain old ones that can’t live without those favorite shows — sort of like HBO has managed to do with Game of Thrones, Newsroom, and others. The company is also saying that its spending far less on the original content (less than 10 percent of its total content costs), which means Netflix is able to power the ship without spending a ton of cash. That means its much less  likely to have to raise prices on current subscription plans.

“We’re very excited with what’s happened with House of Cards, and with what’s coming with Arrested Development,” Hastings said during the call. “Over this year with a continuing roll out of original shows, you’re going to see a very nice redefinition and a broadening of what Netflix is to our members.”

We also know that Netflix isn’t big on the idea of making subscribers wait once a week (for 13-15 weeks) to watch an entire season of those shows. This seems to be true even though there’s obviously a benefit in some part to making people wait to get a whole season, which (in theory) would cause them to prolong canceling a subscription for 2 to 3 months rather than a single month.

Don’t count on subsidized Netflix from third-parties

Anyone hoping that Netflix will adopt a payment model used by cable companies to get free Cinemax or HBO for a short period of time might be waiting a while. During the call Hastings said the company doesn’t have any plans to partner with hardware manufacturers, television or Internet service providers on a subsidized Netflix offer — meaning someone like Roku or Comcast ends up fronting the $7.99 per month for six months when you do business with them.

“We’ve seen some companies (that advertise Netflix as a benefit) see success by offering customers a Netflix gift card,” Hastings said. However, he added that the current business model is proving quite successful, so subsidized Netflix accounts aren’t very likely.

That’s probably a pretty smart move, especially because its what’s preventing premium channel HBO from striking out on its own. HBO and other premium channels are deeply dependent on revenue that comes from cable and satellite TV providers, and as such, won’t be able to offer a stand-alone streaming service without ruining its overall business.

Latin America is still a-go

Netflix is still waiting to become profitable in its international markets, such as he U.K., Spain, and Latin America, but the company said it’s seeing consistent growth regardless. This is true of Latin America, which is posting some of the slowest growth because the company wasn’t prepared for how different the market was from other territories.

But that isn’t discouraging the company from sticking around until it starts making money. Hastings reiterated the company’s commitment during the call, saying that although growth is slow, Latin America doesn’t face heavy competition from others. That means the company feels like it’s still a worthy market to stay in.

Photo via blucier/Flickr

If you decide to steal someone’s smart TV or smartphone, you’d think disconnecting all the accounts on it would be a smart first thing to do. Well, an alleged thief in Raleigh, N.C. wasn’t that bright and let a Netflix account lead police to his doorstep.

A Raleigh detective had already been investigating a string of car break-ins and many items that had been taken from those vehicles. But the case really heated up when a man whose smart TV had been stolen on Jan. 22 notified the police after his connected Netflix account was used by another person. Many smart TVs let you login to services like Netflix or Hulu Plus to easily watch content from the web.

The police showed up to the house of the man who unwittingly used the Netflix account. That person said he had purchased the stolen TV from someone else, and started naming people associated with the purchase. This led the police to eventually arrest 36-year-old Tchannen Hall, search his house, and charge him with three drug offenses and for stealing goods.

Hall’s house contained several TVs, eight GPS units, 34 watches, 17 power tools, and other items from assorted robberies.

Who knew a Netflix account could be so dangerous?

Via the Raleigh News & Observer

Illustration by Tom Cheredar/VentureBeat

That might be changing sooner than you think.

Today Netflix chief product officer Neil Hunt told The Verge that Netflix expects to be streaming video at the massive 3,840-by-2,160 pixel 4K resolution in the fairly near future: this year or next. If you thought Netflix was a data hog before, you ain’t seen nothing yet.

Now we know why Netflix recently unveiled its speed list of the 17 fastest Internet service providers in America.

“We have work to do with the compression and decode capability,” Hunt admitted, but he noted that Netflix’ own House of Cards was shot in 4K.

Assuming a massive amount of compression would need to take place in order to be able to stream 4K video reliably and quickly, the question becomes: What kind of hardware will be necessary to run full-res Netflix in the near future? Smart TVs, and appliances like Xboxes, Wiis, and Apple TVs might need very significant upgrades to have the kind of onboard power to run real-time decompression for that much video. Not to mention much more on-board storage, even if just for buffering.

One other thing Hunt wants to see from video producers? A higher frame rate.

Hunt says we’ve now pretty much maxed out the resolution of our eyes but that 60 frames/second would make for a much better video experience than the current 24 or 30.

photo credit: pkingDesign via photopin cc

After all, the online TV and movie distributor has, on occasion, used up to a third of all bandwidth in North America singlehandedly. And Netflix’s 33 million customers currently stream more than a billion hours of TV and movies every single month.

The streaming media company has put out a “Netflix ISP Index,” giving you insight into which Internet service providers are the fastest.

In the U.S., that list starts with Google, which is running a high-speed fiber experiment in Kansas and boasts an average download speed of 3.35 megabits per second. Cox comes in fourth, followed closely by Verizon FIOS. But long-time incumbents AT&T, Time Warner, and ClearWire languish well in the rear:

1. Google Fiber – 3.35 Mbps
2. Cablevision – Optimum - 2.35 Mbps
3. SuddenLink - 2.19 Mbps
4. Cox - 2.12 Mbps
5. Verizon-FIOS - 2.10 Mbps
6. Charter - 2.08 Mbps
7. Comcast - 2.06 Mbps
8. Mediacom - 2.04 Mbps
9. Time Warner Cable - 2.04 Mbps
10. Bright House - 2.02 Mbps
11. AT&T U-Verse - 1.91 Mbps
12. Centurylink - 1.68 Mbps
13. Windstream - 1.61 Mbps
14. Frontier - 1.54 Mbps
15. AT&T DSL - 1.43 Mbps
16. Verizon DSL - 1.37 Mbps
17. Clearwire - 1.25 Mbps

The results are average velocity, so peak velocity can be much higher.

The ranking is useful for choosing an ISP, or negotiating with your current service provider. And, perhaps, from Netflix’ point of view, it’s also a shot across the bow of ISPs that might be tempted to “packet-shape,” or slow down traffic from media companies that don’t pay extra for higher speed.

Globally, Netflix members in Finland have the highest average speed, while Mexican Netflix subscribers have the lowest. And all ISPs in Denmark, Sweden, and Finland delivered better than a 2Mbps download speed.

You can check your results here.

photo credit: DigiDreamGrafix.com via photopin cc

Essentially, the pitch is this: Mixpanel’s new Revenue Analytics product helps you determine the lifetime value of a customer. That’s a great metric on its own; and when it’s paired with the ability to track precisely how specific items in your strategy and tactics are impacting revenue, it grows wings. And helping product managers see, without having to run a report, that 35-50 year old female clients are twice as valuable as 18-25 year old males, or that customers acquired via Google AdWords spend three times as much as those who enter via Twitter, is magic.

That’s especially important right now, says Mixpanel CEO Suhail Doshi, because startups are having a hard time raising money — especially for consumer plays. But if they can show exactly how their product converts and funnels and ultimately produces cold hard green cash, the VC conversation is an awful lot easier to ace.

The new product is free to Mixpanel’s existing customers and installs, Doshi told me, with one line of code in your web or mobile app.

“The broader part of the industry doesn’t use this [lifetime value of a customer] metric,” Doshi told me yesterday. “But it’s an important number to know. Companies like Zynga and Netflix grew very fast because they could spend millions and millions of dollars and know they’re going to get a return on their investment.”

But in isolation, any metric is limited. The true magic comes when you know what factors drive your key metrics.

Source: Mixpanel

Mixpanel retention analysis

That’s the target Mixpanel’s new product is squarely aimed at. Mixpanel already knows an awful lot about your users; now, the plan is to tell you exactly which factors lead to maximum revenue. That’s how, Doshi told me, social dating site Grouper found out that Chicagoans were their most valuable users (who would have known?). And how project management company Sprint.ly discovered that customers who integrated their product with Github were 1,400 percent more valuable.

“This is actually very, very hard, and most companies don’t do this because the data is hard to access, it’s a manual process,” Doshi said. “But when you have it integrated, you can ask questions like, ‘Is Facebook Connect actually getting our customers to stay?’ and ‘What’s the actual value of that?’”

Nintendo TVii is finally coming to your living room and the Wii U tomorrow, the company announced, but it won’t arrive with all the features originally promised.

Nintendo announced TVii earlier this year as a service that would integrate all television content and Wii U apps, such as Hulu Plus, Amazon, and Netflix. Wii U owners could then use TVii as a hub for selecting viewing content whether it’s coming through live television or a streaming service. At least, that was the plan. The application didn’t make its expected launch alongside the Wii U.

When it arrives tomorrow, TVii will allow users to find content such as sporting events or movies and tap an icon on their GamePad to view the content. It works with their cable provider or satellite service and also offers social features like content sharing on Twitter, Facebook, and Nintendo’s Miiverse.

However, as website Polygon pointed out, some of the features that Nintendo announced with the service won’t be available tomorrow. TVii won’t be able to access DVR content, and it won’t have TiVo programming support. Those should be available next year. Netflix won’t be available directly through TVii, either. For now, users will have to launch the Wii U’s built-in Netflix app to view its content.

Nintendo’s Wii U is one of a host of devices angling to be your new all-in-one media center. Microsoft’s Xbox 360 and Sony’s PlayStation 3 deliver many similar services, as do many other devices like Roku.

Well, at least Nintendo kept that December promise.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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One of the most highly anticipated shows in Netflix’s original programing line up is Arrested Development, and now we’re hearing word that the video rental service is increasing the number of episodes.

The show’s production is currently taking a break from filming the forthcoming season, which should debut on Netflix at some point during the first quarter of 2013. Arrested Development producers apparently shot more footage than expected for the initial 10 episodes, and they now have ideas for more scenes and storylines, according to a Deadline report.

The report indicates that show producers successfully pitched Netflix on doing additional episodes, which would push the total episode count to 12-15. Filming is expected to resume again in January, pending all the scheduling can be worked out.

If the news is true, it could theoretically push the debut of Arrested Development’s new season further into 2013. But it’s possible that we could see the season debut in two parts, which wouldn’t be so bad. Of course, it’s hard to say since Netflix still hasn’t given an official premiere date for the season.

We’re reaching out to Netflix for confirmation on the episode order. Stay tuned for updates.

I’ve often praised Netflix chief exec Reed Hastings for his ability to cut through the jargon and communicate information about his company clearly and not always through traditionally recognized channels.

Apparently, the staff of the Securities and Exchange Commission does not agree and is recommending that it take action against both Netflix and Hastings for violating disclosure regulations, according to a new SEC filing released today (PDF).

Regulators are taking issue over a message Hastings sent in July about Netflix users watching over a billion hours on the streaming video service during the previous month. While the company’s stock did receive a 20 percent increase after the news was communicated on Facebook, Hastings said that wasn’t the purpose of the message.

Here’s Hastings response from the SEC document:

SEC staff questions a Facebook post. Fascinating social media story.

We use blogging and social media, including Facebook, to communicate effectively with the public and our members.
In June we posted on our blog that our members were enjoying “nearly a billion hours per month” of Netflix, and people wrote about this. We did not also issue a press release or 8-K filing about this.

In early July, I publicly posted on Facebook to the over 200,000 of you who subscribe to me that our members had enjoyed over 1 billion hours in June, highlighting how strong our content was. There was press coverage as there are many reporters and bloggers among you, my public followers.  Some of you re-posted my post. Again, we did not also issue a press release or file an 8-K about this.

SEC staff informed us yesterday that they are recommending that the SEC bring a civil action against us for my July 1 billion hour public post, asserting we violated “Reg FD”.  This rule is designed to ensure that individual investors have equal access to information as large institutional investors, by prohibiting selective disclosure of material information.  The SEC staff believes that I gave you all “material” investor information in my post and that we needed to instead release the June viewing fact “publicly” with an 8-K filing or press release.

I want to note a few things.

First, we think posting to over 200,000 people is very public, especially because many of my subscribers are reporters and bloggers.

Second, while we think my public Facebook post is public, we don’t currently use Facebook and other social media to get material information to investors; we usually get that information out in our extensive investor letters, press releases and SEC filings. We think the fact of 1 billion hours of viewing in June was not “material” to investors, and we had blogged a few weeks before that we were serving nearly 1 billion hours per month.

Finally, while our stock rose the day of my public post, the increase started well before my mid-morning post was out, likely driven by the positive Citigroup research report the evening before.

We remain optimistic this can be cleared up quickly through the SEC’s review process.

-Reed

Essentially, it looks like the SEC is accusing Netflix of keeping shareholders in the dark because the company never filed a press release about the “1 billion hours watched” milestone, and it does not consider Facebook as an equivalent communication mechanism. And to the SEC’s point, the Investor Relations page on Netflix’s website doesn’t contain a feed of Facebook updates. So if you are a Netflix shareholder and you don’t pay attention to Facebook, you are not in the loop.

We’ve reached out to Netflix for further clarification and will update the post with any new information.

Sony announced today on the PlayStation blog that the PS3 is the number one home entertainment device people use to watch Netflix on their TVs. That’s impressive.

Almost any device, it seems, can stream Netflix these days. Netflix is available on the Wii (and the new Wii U), Apple TV, Tivo, Boxee, numerous Blu-ray players, Roku digital players, smart TV platforms from multiple vendors, and, of course, the Xbox 360.

To lead that pack is quite an accomplishment.

“PS3 is our largest TV-connected platform in terms of Netflix viewing, and this year, at times, even surpassed the PC in hours of Netflix enjoyment to become our number one platform overall,” Netflix CEO Reed Hastings said in a statement.

Part of that lead is because PS3 is a very successful mass-market console despite the fact that Xbox has outsold it for 23 consecutive months. Part of it is because PS3 had Netflix early, in 2009, was the first console with 1080p and 5.1 surround sound, and has consistently been on the cutting edge of what’s available, technologically, to control your Netflix viewing.

But part of it is probably also because the Xbox 360, while it offers Netflix, has a wider range of entertainment possibilities, with Microsoft working on original video content, major network TV, YouTube, live TV, and more.

Two newer innovations that Sony has brought to PS3 and Netflix include a new voice user interface system, dubbed “Max,” that is currently in testing, and the ability to pause a Netflix movie on your PS3-equipped TV, and restart it seamlessly on another device, such as your PlayStation Vita.

Innovations like that — and perhaps a breakthrough new console for the coming 2013 updates — might keep PS3 in the lead.

photo credit: CowGummy via photopin cc

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Netflix chief executive Reed Hastings took the stage at Amazon’s big cloud event in Las Vegas today with Amazon’s senior VP Andy Jassy, and told the audience that he wanted Netflix to be the largest business in the world that runs entirely on Amazon Web Services.

In spite of the fact, of course, that Amazon and Netflix are die-hard competitors.

“The biggest benefit is the scale,” Hastings said. “Now we’re on a cost curve and an architecture that, as more people use it, gets cheaper.”

Netflix, of course, sells streaming entertainment. So does Amazon … and Amazon also sells DVDs and Blu-Rays. But Hastings said that Amazon CEO Jeff Bezos has assured him that it is safe to be on Amazon’s cloud services, and Jassy told him that to Amazon Web Services, Amazon streaming and Netflix streaming are just two equal clients.

“Netflix is every bit as important a customer to us as Amazon retail,” Jassy said.

While cost and scalability are the huge benefits of the cloud — especially since Amazon just reduced most clients’ data storage costs by about 25 percent — Hastings also talked about what is not great with the cloud: configuration.

“When you have to pick individual instance types, you know something’s wrong,” the very technical Hastings said, referring to how Amazon packages and prices cloud usage. ”It reminds me a lot of when I started in computing and had to handle register allocation manually before compilers came out … we’re kind of at that stage before the compiler.”

Hastings also provided some insight into how Netflix uses the cloud beyond basic storage and streaming.

“Netflix’s biggest problem is ranking,” Hastings said, saying that the company has the impossible task of fitting 10,000 videos into 10 inches of screen real estate.

When the company gets it right, people watch what Netflix is showing them. When the company gets it wrong, he says, people go watch cable. So Netflix analyzes gigabytes of subscriber data on the cloud to optimize its ranking methodology … and ensure that what users see on the first page of Netflix is something that’s actually interesting to them.

As Reuters originally reported, major industry players like Time Warner Cable to Comcast are involved with an ongoing effort to set up a research center in the Bay Area.

Louisville, Colorado-based CableLabs, a not-for-profit research and development consortium with cable operators as its members, has been tasked with leading the effort. It has been around since 1988, and boasts almost 200 employees, including researchers, programmers and consultants.

The center hopes to work on projects with tech startups (primarily in the mobile, communications and networking space) hire engineers, and forge a relationship with Stanford, located a stone’s throw from top-notch research facilities like SRI.

Cable execs hope this initiative will be a lifeboat in treacherous waters. The industry has been doubly hurt in recent years. The younger generation is increasingly turning to competing services like Netflix and Hulu, and in harsh economic times, thousands of existing customers cut their cable or satellite subscription to curb monthly expenses.

Smartphone-carrying youth are among the most dedicated users of Silicon Valley’s tech startups. For this reason, the researchers will focus their efforts on developing mobile technology so young viewers will be able to watch their favorite cable series (Girls and Homeland drew in the highest ratings this season) on the go.

The industry needs to “get re-energized,” Jerald Kent, chief executive of Cequel Communications and co-founder of Charter Communications, told Reuters. “Part of the message is this is not your grandmother’s cable business.”

Image via Shutterstock

Updated at 11:37 am PT with clarification about this being a “test.”

E-commerce giant Amazon is quietly testing an $8 monthly option for its Prime program, which gives customers access to free 2-day shipping, monthly Kindle rentals, and a decent selection of unlimited streaming video.

Amazon previously only offered Prime for $79 a year, which means people concerned about that up-front pricing could try out Prime for several months to see if they get their money’s worth with the program. This new pricing option is also incredibly attractive for the holiday season, when you might want Prime benefits for just a few months.

Additionally, the change signals Amazon’s intention to be a bigger player in streaming media. The $8-a-month pricing closely resembles Netflix and Hulu Plus’ plans, but by all accounts, it offers a less robust movie and TV selection. Still, Amazon is banking on the addition of free 2-day shipping and Kindle rentals to the video streaming package to make up for its paltry options.

One caveat for those attracted to the new pricing: The $8 monthly fee ends up costing about $96 total over the course of a year. So it’s still cheaper overall to purchase a $79 yearly subscription to Prime if you feel like you get a lot of value out of the program.

Top photo: Amazon

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

One of the unfortunate side effects of the iPhone 5′s taller screen has been that many existing iOS apps haven’t been optimized for it.

Developers, however, are rapidly moving to fix the problems, however minor they may be.

The latest addition to the list of iPhone 5-optimized apps is Netflix for iOS, which was updated today with support for not only iOS 6, but the iPhone’s taller screen.

Apps not optimized for the iPhone 5 have been letterboxed to compensate for the device’s tweaked proportions. Instagram fixed its issues on Monday, and the iOS Facebook and Twitter apps were supported from day one.

App developers faced similar hurdles when Apple introduced the Retina display-equipped iPad. Fortunately for iOS users, the Apple developer community generally has been pretty responsive to Apple’s display shifts.

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Netflix on the iPhone just got a whole lot prettier. The company released an updated iPhone app today that sports the same slick user interface as its latest iPad app, making it easier to find and watch streaming video.

The visual improvements are the first step towards priming the app for the iPhone 5 and its large 4-inch screen, which comes out Friday. Update: The app isn’t yet optimized for the iPhone 5′s display, but Netflix says another update will be coming soon to support it.

I’ve never had much of a reason to use Netflix on my iPhone, mainly because I don’t think a 3.5-inch screen is big enough to truly enjoy TV shows (and let’s not even get into movies). But the iPhone 5′s bigger display, together with fast 4G LTE speeds, could make Netflix even more tempting to watch on the smartphone.

The new Netflix app shows you the most recent items you’ve watched at the top of the main screen and presents recommendations below that. Compared to the past Netflix iPhone app, the new version feels faster and more fluid, while showing you even more choices. You can learn more about a title by tapping once, or double-tap to instantly start playback.

Take a look at the new Netflix iPhone experience in action below:

But a decade ago, the big social networking story was Friendster with a whopping 3 million users. Microsoft’s Internet Explorer had 95 percent market share. And less than 600 million people were online globally … fewer than Facebook users alone in 2012.

10 years, 3,652 days, 87,648 hours.

A lot has changed since Apple was touting a new 700 MHz iBook and iPhoto 1.1. Blockbuster went from $5.5 billion in revenue to a big bloody hole in the ground, and Yahoo went from Internet behemoth to will-Marissa-Mayer-be-able-save-it.

In a glorious animated GIF from BestedSites: The change a decade makes in Internet time.

photo credit: Mikey G Ottawa via photo pin cc

In a dramatic move befitting of his company’s business, Netflix CEO and Facebook board member Reed Hastings ponied up more than $1 million for a small stake (0.0017 percent) in Facebook.

According to a regulatory filing with the Securities and Exchange Commission, Hastings purchased 47,846 shares at $21.03 a piece on Wednesday, costing him $1,006,201.38. The investment has already accrued more than $37,000 for Hastings, as Facebook’s stock closed up at $21.81 on Friday.

The move suggests that Hastings has confidence in the stock, which hit new lows after Facebook provided zero guidance on its earnings expectations for the rest of the year. Perhaps Hastings knows something the market doesn’t, or maybe the buy is a symbolic gesture meant to show support for a close partner. Netflix was a launch partner of Facebook’s Open Graph and may soon enable U.S. subscribers to automatically share their viewing activity with their Facebook friends.

Facebook got a second vote of confidence today, courtesy of Microsoft. Bloomberg claims that Microsoft will be holding on to its trove of Facebook shares even though the company will be free to unload its stock next week. Microsoft, said an anonymous source, views Facebook as a long-term investment.

Surely no one, save Facebook, would fault Microsoft for dumping its stake. Even with the stock resting around $22 a share, a much depreciated value from the IPO price, the software giant would stand to make a handsome profit from its 2007 investment. At the time, the company put in $240 million, and it holds a 1.7 percent stake in Facebook. That stake is worth around $1 billion.

But investing in Facebook has been one of Microsoft CEO Steve Ballmer’s more highly regarded decisions in the last decade. Both companies also have a common enemy in Google, and they remain tightly aligned in many ways, including patent-sharing deals and a partnership that gives Microsoft’s Bing search engine a Facebook advantage. Cashing out now doesn’t seem likely.

The market has reacted well to both pieces of news, but Facebook will be put to the test yet again on August 16, when a share lock-up period expires and insiders are allowed to sell.

Facebook declined to comment on this story.

That’s what new fashion rental startup Le Tote is offering young urban women. And the founders are hoping that women’s rich history of sharing clothes will make the company as successful as some other rental successes.

Netflix, anyone?

“Women only wear 10-20 percent of what’s in their closet,” co-founder Rakesh Tondon explains. “Most women have closets full of clothes they don’t wear.”

(Perhaps I’m way more metrosexual than I thought, or perhaps the problem is not limited to women.)

So Le Tote is trying to solve the problem of variety, without generating the bloat that spawns Hoarders-style rooms full of unused clothing. All while trying to fit inside the tight budgets of young urban women sans unlimited income.

Users sign up for Le Tote at a monthly rate of $49, then fill out a style profile. Le Tote’s stylists (and algorithms) take that profile information and select looks and fashions for you: three garments and two accessories. Then you receive a little Le Tote bag in the mail.

Source: Let Tote

Filling out your Le Tote style profile by favorite stores and magazines …

Just like the Netflix DVD rental business, you can keep the outfit as long as you want. Get tired of it? Send it back to get another one.

Women can send the totes back as often as they want. They can have a new outfit every weekend, and can make special requests, such as no earrings, just skirts, or no tops. But the styles are picked for you, kinda like Forrest Gump’s box of chocolates.

The clothing itself is not brand name, nor, co-founder Brett Northart hastens to add, knockoffs on famous designer’s clothing. Instead, the fashion is under Le Tote’s own label and is sourced in Asia, the Middle East, and Latin America.

“We’re buying from wholesalers and manufactures that supply the big boutiques in major cities,” Northart says.

Source: Le Tote

Same Le Tote fashions

And the obvious question about re-using clothing? Tondon says that’s actually not been a problem at all in their target market testing, as women “grow up sharing with their sisters and friends.” In addition, the clothing is laundered and checked for quality and condition after every use.

That alone might incentivize some women to buy more than one membership and give up doing laundry entirely.

Hastings congratulates colleague Ted Sarandos for the feat. Sarandos is the company’s chief content officer, and he’s held that role for the past 12 years.

One billion hours in a month means that Netflix subscribers watched 33 million hours of video for every single day in June. Each hour, they watched 1.4 million hours of content.

Hastings is looking for even more growth as new content, specifically House of Cards and Arrested Development, comes on stream in the future. Both are being produced in-house by Netflix.

Netflix recently passed Apple in streaming media market share for movies, growing by 44 percent over last year. With that growth comes some almost unbelievably significant technical requirements. As we noted recently, Netflix can sometimes consume up to 32 percent of peak U.S. bandwidth alone, and it has created its own private content delivery network to cope. That private CDN is not yet complete; when it is perhaps Netflix will not be as affected by cloud outages such as Amazon’s last week.

Here’s the full text of Hasting’s status update:

Congrats to Ted Sarandos, and his amazing content licensing team. Netflix monthly viewing exceeded 1 billion hours for the first time ever in June. When House of Cards and Arrested Development debut, we’ll blow these records away. Keep going, Ted, we need even more!

It’s worth noting that Michael Spiegelmanm, the director of product innovation at Netflix, is a speaker at VentureBeat’s upcoming MobileBeat 2012 in San Francisco.

Image credit: ShutterStock

Amazon will take on Netflix, Hulu, and traditional television companies by creating its own slate of original TV shows, starting with one children’s show and three comedies. The move was expected.

Amazon’s new Studios arm intends to produce several TV shows and distribute them through its Amazon Instant Video service. This is quite similar to what Netflix has done with the show Lillyhammer and upcoming projects like David Fincher’s House of Cards, Eli Roth’s Hemlock Grove, Jenji Kohan’s Orange is the New Black, and the hugely anticipated fourth season of Arrested Development. Hulu also has original projects with the comedy Battleground, Morgan Spurlock’s A Day in the Life reality series, and the unscripted travel show Up to Speed.

Unlike Netflix’s more traditional approach of hiring a known Hollywood entity to create and produce its original programs, Amazon has decided to crowdsource its efforts and let anyone submit scripts to turn into TV shows. The first four winners, whose shows will be produced, have been awarded $10,000 in options as a start for being selected.

Amazon lists the following four shows as its first original projects. The first three are the comedies and the final one is the children’s show:

The 100 Deaths of Mort Grimley
Creator: Angel Castillo
Premise: In this animated comedy, Hell desperately needs new customers. And Mort Grimley, new to the Underworld after accidentally taking his own life, is offered a deal; get Hell’s numbers up and maybe get a transfer out (and up), or face eternity in fire and brimstone alongside the cruel mother he tried to escape.

Doomsday
Creator: Nathan Thomas
Premise: This mockumentary follows an ensemble of diverse characters as they ready themselves for the supposed end of the world — including the guru who made the doomsday prediction.

Magic Monkey Billionaire
Creator: Diana Wright
Premise: When their wealthy magician owner suddenly dies, his two animal assistants — Rabbit and Monkey — are shocked to learn that Monkey alone has been left his billions, soon unleashing the ultimate forces of good and evil as former friends turn to arch enemies.

Buck Plaidsheep
Creators: Frank Suarez (artist) and Clark Stubbs (writer)
Premise: Buck Plaidsheep chronicles the adventures of a courageous little critter named Buck. Whenever there’s a problem on Fleecy Farm, Buck races full-speed into action in one of his souped-up vehicles. And although things may not always go as planned, it’s Buck’s “never give up” attitude that makes him the sheep that always saves the day!

Let us know what you think of these options in the comments below and if they would help attract you to Amazon’s Instant Video service.

Female director photo: Joyce Michaud/Shutterstock

Data hogs, meet your Holy Grail.

Verizon is adding a major new option for its high-speed FiOS fiber customers: a 300 megabits-per-second data service for households with heavy Internet habits. Using the new level, customers can download a 1.5-gigabyte file in less than thirty seconds.

The reason for the new tier of service is all about online video, which, as an ever-expanding data dominator, needs more and more bandwidth all to itself. Even Verizon is investing in streaming video via Viewdini, a video platform that combines the output of Netflix, Hulu, and Comcast.

Verizon says its new offering is meant for households with five or more constantly-connected, data-hungry devices. Absent from the announcement, however, is any mention of pricing, though the new offering is sure to top the $199, 150 Mbps package that Verizon currently offers.

FiOS is a big money maker for Verizon, which reported the service accounted for 63 percent of its consumer revenue during the first quarter of this year. Clearly, the company has a lot invested in increasing the service’s reach even further. As of last quarter the company counted 5 million FiOS Internet customers, out of a possible 13.7 million customers who live in areas where the service is offered.

But in terms of speed, Verizon is not alone. A competitor on the high-speed Internet front is Gigabit Squared, which recently raised $200 million to bring gigabit per-second broadband to a half dozen communities. Google has also been on the high speed hunt, having already begun work on its Google Fiber initiative in Kansas City, Kansas. Other ISPs and cable companies don’t even come close to Verizon’s new offering.

The biggest difference between the efforts of Gigabit Squared, Google Fiber, and Verizon FiOS is the scale of each service’s rollout so far. While Gigabit Squared and Google Fiber are still very much in development Verizon FiOS has bloomed into a service that many bandwith-hungry consumers desperately want but can’t get just yet.

Amazon has inked a licensing deal with Discovery Communications that will bring popular Discovery Channel, TLC, and Animal Planet titles to its Prime Instant Video service.

Prime Instant Video is a subset of the company’s video streaming, rental, and download service that allows U.S. subscribers, who pay $79 a year for two-day shipping and other goodies, to stream videos as often they’d like.

Amazon is promising Prime customers all-you-can-stream access to series of popular past shows such as Discovery Channel’s Dirty Jobs, TLC’s Say Yes To The Dress, and Animal Planet’s Whale Wars. Available titles will also include additional Discovery library content and Investigation Discovery, Science, and Military Channel shows and specials.

Amazon has recently added a smattering of television shows and movies from Fox and Viacom to round out its offering and blossom into a full-fledged Netflix competitor. The e-commerce company apparently also has an interest in developing its own original programming.

With the Discovery deal, the Amazon Prime Instant Video library has ballooned to 17,000 titles, the company said. That figure, in theory, makes Amazon’s catalog of titles available for instant streaming larger than Netflix’s, which unofficially offers 13,855 titles, by Instant Watcher’s count. Officially, Netflix doesn’t reveal the size of its catalog.

Photo credit: Discovery Channel

Hoping that content really is king in the battle for viewer attention, video streaming company Hulu has purchased its first original scripted series.

Hulu has ordered 13, 30-minute episodes of (somewhat ironically titled) “Battleground,” a faux documentary that follows the characters behind a fictional politician’s campaign for Senator.

“Battleground” episodes will beginning airing Tuesday, February 14, and episodes will include eight minutes of advertising, according to AdAge.

The site’s exclusive new offering is part of a $500 million new content promise Hulu CEO Jason Kilar made to viewers earlier in the week — and a chess-like response to Netflix. The series announcement, not coincidentally, coincides with Netflix’s first foray into the realm of original programming. The Hulu competitor will start streaming its original series “Lilyhammer” to subscribers come early February.

Hulu, a company that had an uncertain future just a few months ago, is also now talking about potentially raising funds to finance more original content deals. “We have a very healthy business,” chief content officer Andy Forssell said at the Television Critics’ Association Winter Press Tour Sunday. “When you have a healthy business, capital is not a problem. There are plenty of people who want to help.”

Hulu has also renewed its commitment to documentary series “A Day in the Life.” The company has ordered 10 new episodes of the show, according to Bloomberg.

Together, the two shows could help Hulu ramp up advertising sales and encourage more Hulu Plus paid-subscriber signups. Hulu continues to see healthy growth in revenue, new content and subscriber numbers, but it missed its 2011 revenue projection by $80 million.

Coinstar’s RedBox kiosks, located in grocery stores and other retail spots, offer inexpensive movie and video game rentals. The dollar-a-day pricing is part of its appeal, but Coinstar announced plans to raise prices on DVD rentals to $1.20 per day.

The company also plans to launch an online subscription streaming service to compete with rival Netflix. The timing is key, as rival Netflix continues to lick its wounds, having shed 800,000 customers in the last quarter alone.

Coinstar’s earnings per share have been between $3.15 and $3.5 per share on revenue of $1.81 to $1.84 for the year. In after-hours trading the shares dropped 11 percent to $47, on investor fears that the price increase would hurt future sales, according to the Wall Street Journal.

The top four largest Internet services in North America account for 64.4 percent of all network traffic, according to the report. They are Netflix, HTTP, YouTube and BitTorrent, according to the report’s executive summary.

The video-streaming component of Netflix is responsible for nearly 28 percent of all bandwidth usage nationally. Real-time entertainment services are the primary drivers of traffic, with especially heavy bandwidth consumption for music and video content.

The report also highlighted the rapid shift of Internet traffic away from desktop devices such as PCs, to all other forms of net-connected devices, such as set-top boxes, game consoles like the Xbox 360, the Playstation 3, smart phones and tablet devices. Only 45 percent of Internet traffic on fixed networks now goes to laptops or desktop computers, according to the report.

“The fact that more video traffic is going to devices other than a PC should be a wake-up call that counting bytes is no longer sufficient for network planning” said Dave Caputo chief executive officer of Sandvine. “Communications Service Providers need to have detailed business intelligence on not only the devices being used but also the quality and length of the videos being watched so they can engineer for a high subscriber quality of experience and not simply adding capacity through continuous capital investment.”

In spite of its prodigious consumption of North America’s broadband Internet resources, things have not been rose for the company with delightful red envelope. Netflix lost 800,000 customers during the 3rd Quarter, and Bloomberg reported today that the company has laid off 15 of its staff, mostly in human resources.

[Image Credit: EDHAR/ShutterStock]

Customers with a streaming-only subscription plan can only watch one video at a time, which eliminates the possibility of sharing an account among multiple people.

When customers try to play multiple video streams at the same time, a service warning pops up that reads: “There are # movies being watched, which is the limit for your membership. Please stop playing at least one movie and try again later. Visit netflix.com/help for assistance.”

Of course, there is a work around to enable customers to play multiple streams, but it’s not cheap. Anyone subscribed to a multiple DVD-by-mail plan — ranging from $19.98 per month for two discs to $51.98 for 8 discs — is allowed to watch additional streams.

The crackdown likely signals that Netflix is inching closer to launching new subscription options. As we reported in April, the company revealed plans to offer family accounts at a higher price that would give those users the ability to watch multiple streaming videos at the same time.

Via Stop The Cap

The contract would replace an existing deal DreamWorks has with HBO, which doesn’t expire until 2014, reports All Things Digital. DreamWorks didn’t respond to VentureBeat for comment about the agreement.

With 22 feature films, the DreamWorks deal wouldn’t add a significant amount of content to Netflix’s already huge streaming library. However, seven of those films grossed more than half a billion dollars at the box office. So although small in its number of titles, the DreamWorks’ library will likely be quite popular with Netflix subscribers.

A wider selection of popular content is exactly what the video streaming service needs to maintain its subscriber base — especially since Netflix is expecting domestic subscriber growth to slow significantly.

Top film distributors in Europe stated that Netflix recently closed deals to offer its service in both Spain and the United Kingdom, according to the report.

Netflix was unavailable for comment about entering into Europe. However, this wouldn’t be the first time it set up shop in another country. The company entered Canada in September 2010 and recently announced plans to enter 43 countries in Latin America and the Caribbean by the end of 2011.

None of the confirmed international markets will offer Netflix’s DVD/Blu-ray disc rental-by-mail subscriptions, which are available only to U.S. customers. While news of the company entering Europe hasn’t been confirmed, it’s likely the company will follow suit and only offer streaming plans.

Netflix probably chose Spain and the U.K. as its first two European markets to test the waters before launching its streaming service across the entire continent.

Spain is known for being a hotbed for digital piracy, which makes it a good candidate for Netflix. The company has often been referred to as an attractive alternative to illegal streaming and downloading because of its relatively low subscription cost and enormous library of content. Also, unlike illegal streaming websites, the company can offer a quality video stream with few service interruptions.

The UK is quite the opposite. The British government provides a free streaming video of public programming through the BBC iPlayer — meaning streaming video is popular among consumers. The iPlayer isn’t a true competitor to Netflix’s Watch Instantly streaming service, but there is no shortage of competition. If Netflix does enter the U.K. market, it will be going up against Amazon-owned LoveFilm and News Corp.’s BSkyB streaming service.

That said, Netflix’s current library of content (as well as partnerships between media companies who own the rights to that content) will translate much easier to a U.K. audience than it will in Spain. It’s unknown if the  licensing from the company’s U.S. and Canadian content library will carry over.

The news of Netflix entering Europe makes sense since the company wants to derive the majority of its revenue through streaming subscriptions. It’s also trying to transition the U.S. market away from the DVD-by-mail subscriptions, since shipping costs eat into profits.

Netflix is understandably slower to enter Europe because operating costs in those countries are likely to be far larger than in the America region. The move also jibes with past comments made by Netflix CEO Reed Hastings.

“We think the international opportunities for us to build profitable businesses may be quite large, but the rapid expansion will lower global operating margins as long as there are additional markets in which we can wisely invest,” Hastings wrote in response to the company’s long-term future growth back in December 2010.

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“In terms of a ‘A to B’ comparison, we were surprised by how unsocial the Netflix users were,” said Mashwork founder Jared Feldman, who highlighted the large discrepancy between Netflix and Hulu’s total subscribers.

“Obviously [Hulu] is at a disadvantage because they’re late to the game, but Hulu has a social component the company is using to grow [its] subscribers,” Feldman said.

Mashwork filtered over 10,000 tweets mentioning people’s preferences regarding Netflix, Hulu Plus (Hulu’s paid service) and traditional cable services. The results revealed that 29 percent of the tweets preferred Netflix — 9 percent higher than the number of tweets preferring Hulu Plus. But considering how many more Netflix users there are, Feldman said he expected the percentage to be much higher over Hulu.

The data also indicated that many people have yet to try the Hulu Plus service, which means the company’s subscriptions could potentially grow much larger over time. Hulu itself is reporting higher than expected growth rates to its subscriptions, according to the company’s 2011 second quarter progress report.

Hulu recently relaunched Facebook integration that lets people comment on specific portions of a video using their Facebook account. The company’s first attempt at integration resulted in security breaches for some users, but the overall backlash was minimum.

“There is a lack of social media integration on Netflix. Obviously that’s a conscious effort the company has made for whatever reason,” Feldman said.

One reason Netflix isn’t as eager to add socialization features to its streaming service could be that its library of content consists entirely of licensed media from outside companies.

Hulu, on the other hand, has more of an ownership mentality, since three of the four partners that own the streaming service (Disney, Comcast and News Corp.) are media companies.

Below is an infographic displaying the results of the Twitter-data gathered by Mashwork. As the data shows, Hulu’s strong social media presence could make the company a serious video streaming service competitor in the future.

The 3 million who’ve downloaded the app since its debut in May represent about 10 percent of HBO’s 28 million total U.S. subscribers, according to the company.

The HBO Go app grants paid HBO subscribers the ability to view the entire library of HBO content, which is composed of 1,400 episodes, documentaries and movies. HBO isn’t cannibalizing its current business since viewers must subscribe to a HBO package through a pre-existing cable or satellite provider, such as Comcast, AT&T, Verizon or DirecTV.

HBO’s business model has transitioned away from relying on licensing from movies to bring in and maintain its base of customers. Now, the company produces original content like Game of Thrones and Entourage, which is worth the elevated cable bill for some customers.

As an added incentive for subscribers to try the HBO Go app, the company has started releasing episodes a week early through the Go service. So, customers who tuned in for the fourth season premiere of HBO’s original series True Blood June 26 can watch the second episode a week early.

Like streaming video service Netflix, HBO’s Go app is available on the iPhone, iPad, most Android devices and on the web. However, HBO’s original programing is unlikely to ever show up through Netflix’s service.

Netflix clearly realizes the value in having exclusive content. In March, the company purchased the rights to produce new TV show House of Cards, directed by David Fincher and starring Kevin Spacey, for $100 million.

Despite HBO’s stand off-ish attitude towards licensing its content on other services, Netflix is still very interested in reaching an agreement to stream its programming.

For now, the only way to watch HBO shows is through a subscription or the HBO Go Apps.

The release of the web app, which currently only works with the iPhone and iPod Touch, marks PlayOn’s first foray into mobile devices. (I didn’t have an iPad to test the app on, and I’m currently awaiting confirmation if it works on that device.) The app doesn’t work on the iPad yet, but PlayOn is working on supporting it over the next few weeks. (If you’re impatient, check out Technologizer’s Jared Newman’s workaround for getting it to work on the iPad.)

Users simply need to install the latest version of the PlayOn client on their Windows PC, then log into http://m.playon.tv on their iPhone while connected to their home network. The mobile app then searches the user’s local network for PlayOn servers, and upon discovery, it grants full access to Hulu, Netflix, Comedy Central, Revision3, and other PlayOn content channels. Eventually, users will be able to log onto their PlayOn servers from anywhere by using their WAN (wide area network) IP address.

PlayOn costs $39.99 for the first year, and $19.99 every year thereafter. Alternatively, users can make a one-time payment of $79.99. After installing the client, users can access content via game consoles like the Xbox 360, Playstation 3, and Nintendo Wii, as well as through computers and other devices compatible with the DLNA streaming media standard.

For Hulu lovers, the release of the web app means that they can get access to the service’s content library without paying $10-a-month for Hulu Plus. Admittedly, PlayOn’s interface isn’t as slick as the official Hulu iPhone and iPad apps. Hulu is also constantly battling with PlayOn and similar services like Boxee to block access to its content — so it’s important to note that access to Hulu won’t always be guaranteed with PlayOn.

While it wasn’t the company’s initial plan, it’s definitely better off with the mobile web app, instead of an iPhone app that’s locked into Apple’s ecosystem. The web app can easily be updated to support other phones and devices eventually, and it could be a much simpler way to access PlayOn content from other computers, compared to previous methods.

PlayOn’s official statement on the iPhone app rejection is below:

PlayOn received approval from Apple in June of 2010 for our application for the iPhone, iPod touch and iPad. Set to launch on July 15th, this app was developed to allow existing PlayOn users to stream online video content and personal media via a home networked PC using the PlayOn software client.

It has now been followed by a notice from Apple that the application has once again gone into review.

Other similar iPhone apps have been approved for the marketplace and can currently be downloaded, including SlingPlayer Mobile and iDisplay, so we’re confident that we can work through this issue with Apple and hope to be able to launch the application on the App Store soon.

It’s strange to me that PlayOn is still pursuing an iPhone app, because the web app works extremely well from my testing over the past few days. It’s a testament to the power of HTML5, and the returning focus on iPhone web apps. (Consider the web app store OpenAppMkt, which offers many features found in the iTunes Store — except it’s outside of Apple’s control.)

On my 802.11G home network — which runs at 54 megabits-per-second, and is typical for most consumers — Hulu and Netflix video loaded up within 15 seconds on the iPhone 4, and the video quality looked excellent. The app gave me trouble connecting to Netflix, and that’s something that I hope is resolved soon. (As of this morning, Netflix access works fine.) PlayOn is technically the only way to get Netflix streaming content on your iPhone right now — at least, until Netflix brings out its official iPhone app this summer.

Navigating through the app’s many menus was zippy, and while the interface had a few bugs during my testing, a PlayOn representative assured me that they were working on squashing them.

Having been a PlayOn user for some time, the release of the app strikes me as something that’s better for existing users than it is for newcomers. Now instead of dealing with PlayOn, new users can pay for Hulu Plus, and wait for the official Netflix iPhone app to be released. And given that PlayOn is a sort of workaround solution to get access to video content, going through the official channels will be far more reliable, and less of a headache, for general users.

Media Mall Technologies, the company behind PlayOn, was founded in 2003, and is based in New York, NY.