NetFlix DVD/Streaming update

NetFlix customers should be receiving an email today, further explaining the news, announced in July, that the service would be upping its prices for DVD+Streaming. That email confirms much of what I said at the time about NetFlix's stragetic position being one that's leaning toward streaming as the future. What I certainly didn't predict was a full-on spin off of the DVD service into a new company called Qwikster.com (I thought they would just phase out DVDs altogether at some point).

Here's a copy of the email I received this morning:

From Reed Hastings, Co-Founder and CEO of NetFlix:

I messed up. I owe you an explanation.

It is clear from the feedback over the past two months that many members felt we lacked respect and humility in the way we announced the separation of DVD and streaming and the price changes. That was certainly not our intent, and I offer my sincere apology. Let me explain what we are doing.

For the past five years, my greatest fear at Netflix has been that we wouldn't make the leap from success in DVDs to success in streaming. Most companies that are great at something – like AOL dialup or Borders bookstores – do not become great at new things people want (streaming for us). So we moved quickly into streaming, but I should have personally given you a full explanation of why we are splitting the services and thereby increasing prices. It wouldn’t have changed the price increase, but it would have been the right thing to do.

So here is what we are doing and why.

Many members love our DVD service, as I do, because nearly every movie ever made is published on DVD. DVD is a great option for those who want the huge and comprehensive selection of movies.

I also love our streaming service because it is integrated into my TV, and I can watch anytime I want. The benefits of our streaming service are really quite different from the benefits of DVD by mail. We need to focus on rapid improvement as streaming technology and the market evolves, without maintaining compatibility with our DVD by mail service.

So we realized that streaming and DVD by mail are really becoming two different businesses, with very different cost structures, that need to be marketed differently, and we need to let each grow and operate independently.

It’s hard to write this after over 10 years of mailing DVDs with pride, but we think it is necessary: In a few weeks, we will rename our DVD by mail service to “Qwikster”. We chose the name Qwikster because it refers to quick delivery. We will keep the name “Netflix” for streaming.

Qwikster will be the same website and DVD service that everyone is used to. It is just a new name, and DVD members will go to qwikster.com to access their DVD queues and choose movies. One improvement we will make at launch is to add a video games upgrade option, similar to our upgrade option for Blu-ray, for those who want to rent Wii, PS3 and Xbox 360 games. Members have been asking for video games for many years, but now that DVD by mail has its own team, we are finally getting it done. Other improvements will follow. A negative of the renaming and separation is that the Qwikster.com and Netflix.com websites will not be integrated.

There are no pricing changes (we’re done with that!). If you subscribe to both services you will have two entries on your credit card statement, one for Qwikster and one for Netflix. The total will be the same as your current charges. We will let you know in a few weeks when the Qwikster.com website is up and ready.

For me the Netflix red envelope has always been a source of joy. The new envelope is still that lovely red, but now it will have a Qwikster logo. I know that logo will grow on me over time, but still, it is hard. I imagine it will be similar for many of you.

I want to acknowledge and thank you for sticking with us, and to apologize again to those members, both current and former, who felt we treated them thoughtlessly.

Both the Qwikster and Netflix teams will work hard to regain your trust. We know it will not be overnight. Actions speak louder than words. But words help people to understand actions.

Respectfully yours,

-Reed Hastings, Co-Founder and CEO, Netflix

p.s. I have a slightly longer explanation along with a video posted on our blog, where you can also post comments.

Spotify is the real deal

Not that there was a ton of concern to the contrary, but Spotify appears to be the technical feat that everyone claims that it is. This isn't too surprising, since they've been refining the service in Europe for several years, and the version we see as the new, hot thing in the U.S. is actually the result of many iterations.

But how does it compare to other services? Well, it aims to be your everything, everywhere service: streaming music, the music you own, everything in one place. It pretty much pulls that off, so long as you don't mind installing software on your computer, rather than having a client on a web page - so old school.

So, why would you install something on your computer, when there are no-install options with Google and Amazon's offering? Speed. Demon speed.

The Spotify client isn't just another media manager and player; it looks a lot like iTunes or DoubleTwist, but it's the fastest thing around. I've got 12,000+ tracks in my library (local files), and searching through them is literally instantaneous. Even better? The delay between when you press "Play" and when your music starts is absolutely zero, essentially removing the buffering effect of cloud-based playback...but wait...Spotify's streaming IS cloud-based playback. So what gives? Well, besides simple speculation, I just don't know how they do it. Spotify's performance is so amazing, it's literally a feature all its own. For example, my girlfriend has a computer at work that's old, and generally slow at all things multimedia on the web. She hasn't been able to use any of the cloud-based services such as Google Music and Amazon Cloud Player because it locks up her browser. Spotify, however, still streams instantly for her, even on her older computer, and the experience has her spouting so many positive things about the service that I just had to jump in and give it a go myself.

If you don't have a Spotify account yet, you can request an invite to the free service (I used the free service and it's features alone for this post), or as mentioned before, if you want to pay for the premium service now, they'll let you in right away. I got an invite in just three days, so the wait for the free service doesnt' appear to be very long.

NetFlix increases cost of getting DVD+streaming service

While NetFlix isn't music, it's very much tied to the move toward digital content distribution of all sorts.

Today NetFlix took a major step toward their next strategic reality: going to a 100% streaming only service. What this means is, on or after September 1st, NetFlix will change the cost of DVD+streaming service from $9.99 to $15.98 ($7.99x2). Other than the change in price, there will be absolutely no change in the service that you receive if you're currently gettign DVDs+streaming.

So why are they changing the pricing plan? Why charge customers more for something they've already been doing at a lower cost for years? The answer is pretty simple: in order to head toward streaming only, they need to people to drop the DVD shipping option.

They actually tried to accomplish this by changing their prices already, somewhere around a year ago, by announcing a the DVD+streaming price change from $8.99 o $9.99. Even though that's a >10% price increase for (once again) absolutely no change in the service itself, it clearly wasn't enough to get people to cancel DVD shipping. After all, you could have changed your plan to streaming only, and SAVED >10% by going down to $7.99. But, the fact is, NetFlix seems to have so many fans that I'll bet hardly anyone had a problem paying the extra $1.

Well, not long after that happened, NetFlix really focused its message on getting new customers, based completely around the streaming only service, and tons of people signed up. Streaming only service, having been a massive success since then, NetFlix is ready to further accelerate their move away from physical media. From a business standpoint, the sooner they can stop shipping DVDs, the sooner they can spend that money on better distribution deals, so their streaming service will include absolutely everything that is currently covered in their physical DVD collection. NetFlix obviously believes that their streaming offerings are strong enough to practically gut their DVD-only business, and this is reflected by today's announcement of the price increase.

So, my money is on this: a year from now two things will have happened (or be about to happen). First, the streaming library will have drastically improved, and their streaming-only customer base will continue to grow at an incredible pace, meaning they won't care if a relatively small percentage of customers decide to cancel the service in reaction to today's announced price increase. Second, they will announce they are dropping DVD shipping service altogether.

The downside to this? Well, if I were working in one of NetFlix's DVD handling centers, I wouldn't expect to have a job handling DVDs for much longer. I'd either be looking for something new, or trying to move into some aspect of the streaming service. Love it or hate it, the days of physical media are numbered, and this is just one more reminder of that simple fact.

Music stats, and my top 10 most played songs

Friends of mine know that I'm into numbers and statistics. I decided to take a look at my Google Music collection, and sort the list by "most listened to" tracks.

The simple fact that Google Music bothers to keep track of the stats, I think, is really cool.

So here it is, just for kicks, my top 10 most played songs since I started keeping track in iTunes a couple years ago. Laugh if you must at one of them being from the Labyrinth soundtrack - I'm a Bowie fan.

I guess my point is, when you leave the physical music collection, and statistics are kept on you rmusical habits, some interesting insights can come from that. For me, this is just one of them. I wonder, 10 years from now, what will be at the top of this list, and what will have fallen away.

Another win for Google Music Beta streaming

In the past I've had trouble streaming music from Amazon's Cloud Player over 3G, even while driving from home to work in a major metropolitan area. If I was in a dead/low 3G coverage zone for more than 10 seconds or so the music would become extremely choppy, and often not recover without me leaving the Android app, and coming back to it. Not too long from now I'll likely upgrade to a 4G phone, but for the majority of us, 3G is where it's at for now, and will be for a while to come.

I just took a business trip over the last two days, riding the Amtrak the whole way. During this trip I was streaming music from the Google Music Beta through my laptop and my Android phone, sometimes over a Verizon 3G MiFi, and sometimes just through the phone's connection. This trip took us though large stretches of rural Illinois, and since I was sitting right next to the Mifi most of the way, I could see everytime it lost 3G service via a little indicator light. However, my music rarely skipped or missed a beat. Maybe it's the quality of the stream, maybe it's Google's supposed better caching algorithm that caches as much data as it can, when it can, to try to get ahead of data outages.

Whatever it is, it's another great thing about the Google Music Beta that makes it stand out as a superior service vs. the Amazon Cloud Player. When it comes to wanting to sit back, relax, and enjoy some music, I don't really care how fancy the underlying technology is, I just want it to work. Even as a technology person myself, I'm always extra excited when something just clicks and works without me having to keep my eye on it all the time.

Google Music Beta

The Google Music beta rocks. I requested an invite maybe a month ago, and received my invite earlier this week. If you haven't requested an invite yet, just ask for one already, it's free if you get in. 

Only a few days into using it, I can honestly say that I like it better than the Amazon Cloud Player already. For your basic listening experience, it's very similar to Amazon's Cloud Player: you upload your music in the background, it's available to play anywhere you have a data connection, and it works in your browser and mobile devices such as Android smartphones and tablets.

So why is the Google Music Beta actually better? 

  • Return of the "Genius" list: For those of you that may have used iPods in the past, and love that "Genius" feature that creates a quick, 25 track mix of related music, Google Music includes this feature as well.
  • Ratings: I've spent years rating my iTunes music library, primarily so that I can create playlists based off of my favorite stuff, and just put my player on random. While Genius is great, sometimes you really want to listen to just the cream-of-the-crop. The Google Music Manager automatically pulled my ratings history from my iTunes library, so it knows what I like, and what I don't.
  • Preferential uploads: Along with pulling the ratings data from iTunes, the Music Manager also seems to be uploading my highest rated music first, which means the music that is already in my Google Music Player is the favorite of my favorite music. This simple little feature ensured that my music listening experience was as good as it could be from the very beginning.
  • Better iTunes sync: I've been using iTunes for years to manage my music. While Amazon Cloud Player will upload from your iTunes library, Google Music Manager will automatically monitor any changes to your iTunes library (e.g. when you buy new music), and upload it for you. This really helps to ease the transition from a locally managed music library, to one in the cloud. Since Google doesn't sell music directly, like Amazon and Apple do, this also makes getting your music into the cloud super simple. I decided to check to see if the Amazon MP3 uploader on my Mac would do this as well, but unfortunately it stopped working today. Strange - all I can see is a screen that says, "Click on Upload Music to begin uploading," yet the button to begin uploading is gone. I upgraded to the latest Amazon MP3 Uploader v1.0.3, and same thing.
  • Intelligent caching: Music you listen to on a regular basis is automatically cached on your mobile device. This means that, in a world of mobile data caps, you won't have to worry as much about how much listening you do on the go.
  • Support for FLAC: FLAC is an audio format that takes up less space than .WAV of .AIFF, but maintains a perfect copy of your music. So, if you've always been a little disappointed at the audio quality that results from MP3 encoding (even at the highest levels), FLAC should feed you need.
  • It's free, for now: if you get into the beta, it's free for now, and will accept a music library of up to 20,000 songs.

UPDATE: As of this morning (June 6th), I've decided to delete all the music I had stored on Amazon, and just go with the Google service. Life in the beta is too good, and there doesn't seem to be any real downside. Also, my uploads to Google have been going for a couple of days now, and I've got more music on the Google Music Beta than I had on Amazon.

Of course, I could still use the Amazon Cloud Drive for storing various things. Problem is, with the lack of a "no brainer" client similar to DropBox, I can't see it being terribly useful.

Bye-bye Pandora, Last.fm

I haven't used Pandora or Last.fm in weeks. After putting some thought into it, I think the primary reason is because I prefer to discover music not at a track level, but at the level of an entire album or EP. When I'm listening to a new artist, I don't just look for if they have one or two catchy tunes. I want to sit down with a whole album, get a listen to a cross section of what's on their mind, and then make a judgement on whether or not I want to listen more.

I talk a lot about Rd.io on this blog, but for me they've simply build a better music listening mouse trap when it comes to music discovery. How can anyone really know if they're going to like an artist or not if all you know of their work is the single that the record label is promoting? Rd.io lets me listen to whole chunks of an artist, to get into the groove with a mood or sentiment that is being expressed in the music, and it doesn't have those uncomfortable surprises that come along with Pandora and Last.fm where you get a random song that is so completely off the map it makes you wonder what the hell is going on. When I get a chance to delve deeper, to get to know more sides of that artist, that's when I really make the decision on whether or not the song that hooked me was the tip of the iceberg, or just a fluke.

Voice control is actually pretty cool for casual music listening

We're not very far away from having voice control in a lot of places. With Google's Android voice control working pretty well, and improving every day, I can see a time when voice control could make the casual interactions with technology a real pleasure.

While many have hoped for voice controlled computers for a long time, it's never really come into reality for a number of really basic reasons, such as the fact that talking to you computer with commands like, "Open Word Document, July Summer Vacation" is just a ridiculous thing to do when you can simply click, or hit a few keys.

The way this relates to music is my experience today with how easy it's become to use voice control inside of my Rdio app for Android in order to quickly and casually find some good music. Paula and I were playing a card game, and I asked her for a music suggestion. She said, "Stephen Kellog," so I told Rdio, "Stephen Kellog", and within a couple of seconds there is was. If you could combine this with Apple's Genius feature on the iPod and iTunes, I would be in heaven.

The unexpected outcome of Rdio's social music discovery

I now live in two worlds, and in a lot of ways it feels as if I have two music collections. The first is the one I've been collecting for many years, first by ripping CDs, and then by purchasing music through iTunes. The second one is my growing streaming music library via Rdio. Though I don't "own" any of the items in my streaming collection, so far it's no less awesome. After all, with the ability to download/sync items to a mobile device, the experience of accessing and playing that music is pretty much identical to the way I listen to the stuff I do "own".

My streaming library is actually growing much faster than the old-school stuff. This is primarily for two reasons. First, because it's nearly frictionless - I can add music to my collection with a few clicks - easy peasy. Second, and more importantly, the social network aspects actually work. The recommendation engine is so simple, and adds a human face to the music that is recommended to me. In Rdio, even though I've never met, nor have I even spoken to/emailed/chatted with any of the handful of people in my network, I have already assigned certain values, qualities, and innate trusts to these people. With nothing more than an overview of their musical tastes, I already have in my own mind a structure for whose recommendations I trust more than others. On top of that, and because it actually works very naturally, I find myself listening to and exploring a lot more music than I would have otherwise. All this, while having a built-in quality filter via the network itself.

I, like many others, were early adopters of one of the other major music streaming services, Pandora. And while Pandora was awesome for some things, whether it's a mind trick or not, I feel that Rdio's recommendations are somehow more personal. By capturing the filtering effects of the network without having to build a data project as complex as the Music Genome Project, I get music that stands a pretty good chance of being liked, or even loved, with very little effort, and almost no downsides.

It's really quite a clever mechanism. I never thought that a social network without the chit-chat social interaction that we have all come to expect from places like Facebook would actually work to build relationships. Instead I find that Rdio, by specializing in a particular element of socialization, really nails what it takes to encourage people to collectively discover music.

Amazon Cloud Player pt. 3 (final)

I'm pretty much sold on Amazon's Cloud Drive/Player. Google & Apple are rumored to be rolling out something similar soon, whether it be only streaming, or something else altogether. Well, they don't have long before I plop down my $$$ for storage with Amazon.

The only thing holding me back at this point? Paula and I would like to share a collection. I use Android, and she uses an iOS device. Time will tell if Amazon comes out with an updated MP3 app that works on iOS (I don't see why they wouldn't), and whether we both agree it works well for us. If Amazon can pull this off, and their software offering is as good or stronger than Google or Apple, then I think they're going to be the big winners here.

Honestly, I'm just thrilled that the cost of bandwidth and storage have come down so far that companies can afford to do this. $1/GB may seem like a lot, but it's only once per year. I'd image that year over year, this price will only get cheaper (the cost of storage goes down by a huge amount every 12 months). Don't forget, it's in the cloud, I can re-download it anytime I want, and Amazon takes care of backups, redundancy, and all the other things I had to worry about with my lowly media server at home. Not to mention the fact that I can cancel anytime if I want to.

What do I have to lose? When it comes to media files the size of music, we've basically reached a point where we are awash in essentially free storage, bandwidth, and computing power. Considering how little computers could do when I was growing up in the 80's, and the Atari Supercharger was the hottest thing on the block, this is pretty much a dream come true.

Amazon Cloud Player - pt. 2

The Amazon Cloud Player is pretty sweet, despite lacking some of the little things I love about managing my music in a dedicated app (smart playlists, ratings of songs, and storing lyrics/other metadata). They do, thankfully, have a playlist feature.

The only other thing I'm really pining for right now? Allow me to both upload and play music in a single interface! Currently the Cloud Drive page (where you upload media) is a separate page. They have a dedicated downloader application that you can install on your computer that should allow you to upload a ton of stuff en masse (really helps you get past the initial upload). I'll be giving this a shot later tonight and tomorrow.

The Android app works reasonably well. I tested the streaming functionality in my car over a 3G connection yesterday on the way to work. Every place that I had good data coverage, the music streamed very well, and I didn't find any bug in the app to speak of. The app is very straight forward, and simple to use, and I personally like the no-frills approach. They also offer a "download" option that allows you to keep your music saved on your Android device so you don't have to worry about sketchy data coverage.

Seems like the core features are covered straight out of the gate. Except for the "nice to have" stuff, I gotta say, the cloud storage + cloud player is a combination that we haven't seen since the days of LaLa.

Amazon Cloud Player

Today's news was probably the most amazing in the online music world since the announcement of the original launch of the iTunes store.


I've already signed up, and I am uploading some must to the free, 5 GB starter Cloud Drive. (why wouldn't you try it)?

I'm sure when Apple releases their rumored/anticipated music-in-the-cloud service they'll say something about how they could have released it sooner, but wanted to get it "right". Well, the Amazon service looks like it's pretty much exactly what I've been hoping for, so Apple better come with guns blazing if they hope to trump this. Not only that, Amazon doesn't lock you into buying music only from them - any music file that you've got that isn't DRM controlled, you can play it.

Brilliant!

The universal music collection

What would happen if you lost all your digital music? We all know that we should backup our data, and if you backup you're data you're most likely okay. But what about the more subtle problem of not just losing the music, but losing the list of music you once owned? It seems like there should be a way to keep track of what's in your collection, the way a library tracks its books.

I have music from all over, in multiple formats, and in a variety of places. Some of it is on my hard drive, and some of it I only have access to because I pay for a streaming service. If I decided to stop using one service, and switch to another, how would I rebuild the collection I'd built up on the old service? Would I not worry about it, and just let the lost music be lost? Would I be distraught knowing that there was music that I loved that I could never find again because I couldn't remember the artists' name from years ago?

What would you do? Has this ever happened to you, and what did you do?

Combining music collections

I live with my girlfriend, Paula. When we first met there wasn't a lot of overlap in our music collection. Not too long after I moved in, like any over zealous tech enthusiast, I decided to digitize her CD collection and bring her into the "joy" of the digital music life ... at least that was the plan. Despite my obvious enthusiasm for it, there were a lot of bumps in the road. I'm here to help you avoid those same bumps.

First of all, change comes slowly. Everyone's got their own way of doing things. I'd never tried to combine my music digital music collections with anyone before, so I wasn't prepared for how much change it would entail. Digital music isn't just combining your file storage, if you're the one doing the conversion it's also showing the other person why it would be cool for them, how to add and manage music, and how to get in the groove with their music player. For Paula and I, it was a mini tech project.

So here is what was involved:

  • Convert Paula's music collection from CD to MP3 (I combined it into my pre-existing iTunes library)
  • Find a suitable digital player (we used an iPod nano)
  • Show Paula how to organize music library (install iTunes, add library, etc.)
And then on top if it I added a new file server that would hold the expanded music collection. Suffice to say, this was a lot more complicated than buying the expanded shelf so we could share a physical CD collection. Paula had quite an extensive collection, and while I was converting it to MP3, I was also completely rearranging the actual CDs. This created a situation where, during the process, she couldn't find any of the music she wanted. On top of that, I thought the MP3 conversion would only take a couple of weekends, but it wound up stretching into weeks.

All these changes came on very quickly for Paula. If I could do it all again, I would just convert the CD collection slowly, a few CDs at a time, then let Paula know that this new way to listen to her music was available and let her come to it when she was ready. With all these changes, I was simply in too much of a rush, and I ignored the fact that Paula wasn't fully on board with the change.

That all happened well over a year ago. Paula likes the music collection now, and she's got a new iPod Touch. Things are good, but honestly it would have been a lot smoother if I'd just let her come to where I was at her own pace.

On the fence, but slipping faster

I find that I'm still living on the fence when it comes to dealing with a digital music collection. There's a good chunk of new music released that isn't available on my service of choice, Rdio. It doesn't matter much that different services have different music, because I like Rdio, and I'm not going to sign up for multiple services just to have the variety - right now downloadable MP3s are more than sufficient on that end of things.

Something interesting happend to me this week though - I realized the home server I use to store all my downloaded and CD-ripped music has been off for weeks and I didn't miss it until I really wanted to listen to something that Rdio didn't have. Not only that, when I turned it back on it was actually a huge pain in the ass to map the drive to my computer, get my music up and running, open iTunes (and download it's latest, gigantic update just to get a less appealing look and feel), and then finally play music.

Music in the cloud, so long as your connection is solid, is simply a hell of a lot less hassle. No home server, no maintenance, no technical heavy lifting. I really thought that having music in the cloud was going to be a precarious experiment at best. Truth is, though, that so long as I'm connected to the cloud it's actually a lot easier.

That was unexpected, to say the least.

Music discovery

Music discovery is one of my favorite things. Finding a new band that actually rocks is one of the best experiences that can be had in our human existence, I think. These days though, I don't go to record stores anymore, or scour the iTunes store. Instead I do three main things:

  1. Talk to friends about what they like
  2. Follow a few people with similar tastes on Rdio
  3. Listen to the Sound Opinions podcast
I think the recommendations of close friends will always trump other methods, but in my case I find that option 2 and 3 are getting better and better all the time, and fill different (but equally important) roles in finding new music.

On Rdio, all I've done is follow four people, just four, and I'm now constantly getting remarkably good recommendations from them. It literally took me five minutes to pick these four people from the list of suggested users (based on common interests in our music libraries), and now I can get great, new music with ease...so long as the music is on Rdio. Of course, the Rdio music library is always growing, so long term I don't see this as a limitation. In fact, I rarely feel limited by it even at this early stage.

Finally, Sound Opinions is a great way to discover stuff outside of what my friends and my Rdio network is currently into. Sound Opinions fills the gap that listening to big commercial radio used to years go, and it's way the hell better at talking about and recommending music than any crap Top 40's station will ever be.

The downside of streaming

It's probably obvious, but the downside of streaming media today is the same as it's always been: when your connection cuts out, so does the stream. When it comes to things like music the slightest interruption can easily break the mood.

The cause of this goes back to the way the internet is structured both in hardware and software, it's built for reliability and automatic re-transmission of lost data, not to be a perfect system of delivering serial content. However, with the huge increase in popularity of streaming media services such as NetFlix the push for better connections will certainly help resolve these problems.

So is the world ready for streaming music to hit main stream? Definitely. If you've used Pandora in the past, then you've already used a streaming music service. With my Rdio account I can usually stream music for hours without any hiccups when I'm sitting at my laptop with a good WiFi connection, but it's not perfect. If you can deal with the occasional interruption thought, and you're the kind of person that wants to try the new, cool thing, it's completely worth it.

There's just one catch: mobile streaming. My experience with trying to stream music over 3G while plugged into my car stereo has been hit and miss. I find that it's best to plan ahead when you want to listen to music on the go. Take a few minutes to decide what you want to listen to and sync it to your phone before you leave. This way you can be sure to have a much less error prone playing experience.

The cure for this will be a combination of two things. First, the deployment of the new 4G wireless networks (faster connections tend to hide intermittent connectivity better). Secondly, more powerful phones coupled with improved compression. When processing power increases you can transfer more highly compressed files (which require less beefy data connections), without any loss in final sound quality. The reason you need the more powerful processors in the phone is that the more highly compressed something is, the more processing it takes on the playing device to decompress it in real time.