Thirty eight percent in the US watch Netflix online -- each one knows how to "cut the cord"

Yesterday I posted a note on Netflix' vision for their company and the TV industry in general. They now see themselves as a "movie and TV series network" and predict rapid growth for Internet TV. Today, I came across a Nielsen survey that supports both of those contentions.

The survey showed that 38% of the people in the U. S. subscribe to or watch Netflix streaming video service. That is up from 31% last year.

I don't know about you, but that is a lot more than I would have guessed. It is about 119 million people if they consider the entire population -- babies and all. Note also that Hulu and Amazon also have significant, growing numbers of subscribers.

Netflix' view of themselves as a series network is also confirmed by the study. Forty five percent of Netflix streaming subscribers say the types of shows they watch when they stream are original programming -- series like "House of Cards."

And, when they watch those series, they tend to “binge.” Eighty eight percent of Netflix users and 70 percent of Hulu Plus users report streaming three or more episodes of the same TV show in one day. As we pointed out in our previous post, both consumers and creators like the full-season format of Netflix productions.

The survey also showed, that Netflix and Hulu are watched on a variety of devices:

The above figure also suggests a trend away from computers and game machines toward phones and tablets. People want to watch TV on any device at any time and at any place.

"Over the top" Internet television is not just for geeks any more -- 38 million people understand how easy it is to defect from cable and satellite TV, to "cut the cord." As the quality and variety of Internet TV material improves, it will be easy for them to drop their cable and satellite subscriptions. When we reach the tipping point, the transition will be rapid.

Netflix' vision of their company and the future of television

Check out the Netflix Long Term View document for investors. It is interesting because it reveals their vision of the company and for the future of television in general.

As to the vision of the company, they say they are a "movie and TV series network." Note that they see themselves as a "network" -- will Netflix, YouTube, Amazon and the BBC become the new television networks?

But, they are not just a network, they are a "TV series network." That is a testament to their success producing multi-episode series for Internet distribution. People like to watch TV without commercials. They also like watching two, three or maybe all the episodes in one sitting. They like watching TV on phones, tablets, PCs or television sets whenever they want to.

Creators also like the artistic freedom and financial security of the Netflix format. They have the freedom to craft a long story. We can think of the Netflix series "House of Cards" as a 661 minute story, to be watched in one or several sittings. The 13 episodes vary from 46 to 56 minutes in length -- the writers are not constrained by time slots and commercial breaks. They could have created more or fewer episodes if they that was the best way to tell the story.

For more on a creator's view of Netflix, watch Kevin Spacey's excellent 2013 James MacTaggart Memorial Lecture 2013 (below). Spacey, who produced and starred in "House of Cards," says he pitched it to the TV networks and cable companies, but he went with Netflix because they gave him total creative control, funded 26 episodes up front and did not request a pilot episode. He feels that pilots are an expensive, misleading digression. He is producing very long stories with evolving characters, and trying to cram that into a single TV pilot or a two hour movie is impossible.

How about the Netflix vision of the future of television?

They sum it up saying that "While Internet TV is only a small percent of video viewing today, it will keep growing because:"

• The Internet is getting faster, more reliable and more available;
• Smart TV sales are increasing and eventually every TV will have Wifi and apps;
• Smart TV adapters are getting better and cheaper;
• Tablet and smartphone viewing is increasing;
• Internet TV apps are improving through competition and frequent updates;
• Streaming will be the leading source for 4k/UHD video;
• Internet video advertising is becoming more personalized and relevant;
• TV Everywhere provides a smooth economic transition for existing networks;
• New entrants like Netflix are innovating rapidly and driving improvements.

Do you like "binging" on a commercial free TV series? (I just finished "Orange is the New Black"). Do you agree with Netflix' reasons for the future growth of IPTV? Are they enough to overcome the power of the incumbents?

Check out Kevin Spacey's lecture:

Experience casting tabs

The other day, I posted a note on my experience with the Chromecast radio. Today, I will talk about experience with video.

My Chromecast works well when showing video from a cast-enabled site like YouTube or casting a Chrome browser tab with still images in it, but poorly when casting a tab with streaming video. (Note that "to cast" is becoming a word, like "to google" or "podcast").

The first thing I tried was casting a tab in which I was surfing the Web and stepping through a Google Docs presentation. The TV image was shifted a little bit to the left, cutting off a few pixels; there was a noticeable, but sub-second, delay in updating the TV screen and data compression made small text difficult to read. The performance was imperfect, but generally satisfactory. (PDF documents do not work because they are handled outside the browser).

As you see below, the CPU load was seldom over 50% of capacity and usually less than 30%, but that was enough to turn the fan on. (My laptop was plugged in).

Next, I went to the CommonCraft Web site and watched a video that played in a 579 by 294 pixel widow. I picked Commoncraft because they make simple teaching videos with little movement on the screen. As you see below, the CPU load increased, but I was able to watch an entire video, which started at the arrow point:

For my final test, I watched a video of the Daily Show in a 512 by 288 pixel window. This is faster-changing video than Commoncraft's. At first, the video played satisfactorily, but CPU use quickly moved up to the vicinity of 100% and the the audio and video degraded severely. The audio went before the video, but the program was un-watchable.

It should be noted that I ran these test using a three-year old Dell Precision M4400 laptop with a 3.06 Ghz core duo CPU with 8 GB of memory running 64-bit Windows, connected to an old 802.11a/g Wifi network. The results would have been better with a newer, faster laptop or an 802.11n network.

The bottom line is that, given my computer and network, tab-casting is fine for PowerPoint presentations and Web surfing, but it is not up to streaming video in a window, much less streaming full-screen video. That is the bad news. The good news is that this is Chromecast version 1.0. Redesign and Moore's will take care of the performance problems soon enough.

For more on variables that can affect tab-casting quality, see this Google help page.

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Update 9/16/2013

+Zarthan South pointed out that my laptop lacks Google's minimum CPU for casting video tabs. With Windows 7, one should have a Core i3 or equivalent for standard quality video casting (http://bit.ly/17E3agi). My laptop is fast enough to cast stills like Web pages and slide presentations, which is quite useful. Note also that RAM utilization was around 3GB while running these tests.

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Update 10/22/2013

K. J. Kim has found that switching to the developer channel a Chromebook significantly improved video tab casting.  That shows that Google is continuing to improve the Chromebook.

I love my Chromecast, but the radio is kind of lame.

I ordered a Chromecast right after they came out, but Amazon back ordered mine. It came a few days ago.

I plugged it in to my TV set, ran the setup and discovered that it could not connect to my home WiFi network. After fooling around with the base station position and antenna and using Google's short HDMI extender cable to move the Chromecast to the side a bit and change its orientation, I eventually established a weak (2 bar) connection.

I used Metageek's inSSIDer software running on my laptop to see the signal strength on the clearest 2.4 Ghz channel available in my TV room and, as you see here, it varied from -50 to -60db.

That is not a terrific signal, but I have a Roku box plugged into the same TV set and neither it or my laptop or my wife's iPad have difficulty connecting to the WiFi network from that room.

I looked online for radio sensitivity specs, and discovered that the folks at Tom's Hardware have speculated that the Chromecast uses an AzureWave AW-NH387 with 802.11 b/g/n, Bluetooth and FM radios. (If that is the case, I wonder if Google has plans for the Bluetooth and FM radios).

They came to that conclusion based on this photograph from Google's FCC Chromecast application:

(If you want to have some geek fun and see how they tested the device, check Google's report to the FCC).

Google's tests show that the Chromecast and its power supply satisfy FCC noise requirements, but I am still in the dark on the sensitivity of the radio.

Is there some way to get finer grained feedback on connection strength than the ill-defined "number of bars?" It would be nice if there were better specs so we could compare devices and guess ahead of time whether they would work in our locations. For now, I can only conclude that the radios in my laptop, my wife's iPad and our Roku box are better than the Chromecast radio. (By the way, a couple years ago, I found that the radio in my wife's iPad was weaker than my laptop radio).

Lest I end on a sour note, you should know that I love the Chromecast and expect to find Chromecasts connected to and built into many future TVs and boxes like my Roku. Chromecast radios will improve with time and I will upgrade my lame WiFi network to 802.11n. I won't be surprised if one day we find all sorts of "Chromecasts" plugged into formerly dumb, disconnected things like heaters, air conditioners, washing machines, etc.

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Update 9/12/2013

Google decided to place the Chromecast antenna inside the dongle case, which means it has to zig around chips and is constrained by the size of the case, so your WiFi reception will depend upon the location and orientation of the dongle itself. Luckily, I was able to get my Chromecast to connect to my home network by fiddling with its orientation and getting it away from the TV set using Google's short HDMI extender, but I was flying blind.

Anyone who has adjusted the rabbit ears on an analog TV set knows that reception varies with the orientation and position of the antenna -- you see the picture improve or get worse as you move the antenna. Unfortunately, the Chromecast gives you no feedback as you move it around.

If you succeed in connecting, Google displays the "strength" of the connection using "bars" like on your cell phone. But those bars are a course, undefined measure of signal strength and they are not shown while you are adjusting the position of the Chromecast.

Google should let you monitor connection strength as you move the Chromecast around. The familiar bars would not be good enough -- you need something more precise like, say, a two digit number or a graphic meter of some sort. The user would not have to know what the meter was displaying, just that it increased or decreased with signal strength.

The dongle would need to be mounted on a swivel that mechanically constrained it once you found the optimal orientation.

Another alternative would be to use an external antenna something like this:

It seems that Google tried to emulate Apple with the Chromecast. It comes in a really nice box and all the user has to do is plug and play -- let's not bother them with details like signal strength and adjusting the antenna position. That is great when it works, frustrating when it doesn't.

Al Jazeera bucks the IPTV cord-cutting trend

We hear criticism of US TV news. Local news tends to feature a lot of "if it bleeds, it leads" stories about crime and police chases. National cable news is highly partisan. Network news is redundant and sound-bite driven.

Al Jazeera has started a new cable offering, Al Jazeera America, which they say will present serious, in-depth news from a global perspective. That sounds pretty good to me. (For more on their coverage philosophy, plans and staff, check this recent OnTheMedia podcast and transcript).

But, it turns out that the cable/satellite companies strong-armed them into dropping their Internet-streaming news service in return for being carried:

So, folks who want Al Jazeera news are now forced to get it as part of an expensive bundle on satellite or cable. As a cord cutter, I am out of luck.

Google Chromecast delay -- production or legal or hardball?

It may have been a data input error or perhaps Amazon has been hacked, but I received an email on August 8 saying the Google Chromecast I had ordered on July 27 would be delivered in mid October.

I checked the Amazon Web site, and, sure enough they were now saying it "usually ships in 2-3 months:"

As we noted last week, the first production run sold out in a few days, and, at the time I placed my order, they said it would ship in 3-4 weeks:

On August 3, they seemed to be on schedule:

This is a simple electronic device -- why are they having so much trouble?  Why did the shipping date slip?  Are they poor production planners?  Having trouble getting parts?  Having legal problems? Playing hardball with Amazon?

If it is legal problems, it may be a trademark conflict with Chromecast.com, a Web development company.  Here is their Web site:

Note the link to legal information near the bottom of the screen.  Follow the link and you will see a lot of legal information.  There is also some very faint black-on-blue text at the bottom of the page.  It is illegible on my display, but here is what it says:

© 2013 Chromecast Inc. All rights reserved. Chromecast, Chromecast Digital Media, chromeTone, The rADium LDAP suite, and project|aurora, are trademarks of Chromecast Inc. and may not be used without written permission.

Did Google forget to get that written permission? If so, the can always change the name to "Metro."

Perhaps they are just playing hardball with Amazon.  It turns out the Google Play Web site still says the Chromecast ships in 2-3 weeks.  If they cut Amazon's quota to induce people like me to cancel their Amazon orders and order from the Google Play Store, they may gain a few sales, but, as a Google customer, that strikes me as doing evil.

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Update 8/9/2013

At first I thought my Amazon delivery date may have been an error, but a day later, Google is still promising 2-3 weeks for shipping, Amazon 2-3 months and Best Buy is just out of stock period:

This pisses me off a bit and must also rankle Amazon.  At $35, there cannot be much (any?) profit in a Chromecast, so it seems foolish.  I guess Google wants me to cancel my Amazon order, but I'll wait till Amazon ships it in October.

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Update 8/10/2013

Amazon sent out an email saying "customers who placed orders prior to August 7 should receive their orders in the coming weeks and into mid-September." The expected ship date for new orders remains 2-3 months.

Chromecast blunders -- does Google need a few MBAs?

Google's new Chromecast, a device for streaming video on a TV set, might turn out to be terrific, but they have bungled the marketing and production.

I was on the Yet Another Tech Show podcast Wednesday and, based on what they had read, all the panelists agreed that Google's new Chromecast was a terrific product at a no-brainer price.  So, being a cord cutter, I ordered one.

After I placed my order, I learned that I had missed the deadline for a three-month Netflix credit premium. I was satisfied with the purchase at first, but now I am somewhat pissed at Google for giving all those folks who ordered a few days earlier a better deal.

It also turned out that Google blew the production planning -- my Chromecast is expected to ship in three or four weeks.

I came across a tweet saying that nearly 250,000 people had ordered them before the Netflix promotion was pulled -- who plans logistics and production?

I had to wait, but it will be worth waiting for, right? I hope so, but astute blogger Bob Cringley suspects that the Google demo overstated the capability of the Chromecast and when I checked the customer reviews on Amazon, I found that, while most are favorable, there is some dissent.  Some folks could not get it to work, experienced poor quality audio or video or discovered that they needed a second port to power the device if they had an older TV with pre-version 1.4 HDMI ports.

I didn't cancel my order -- I still hope to love the thing, but I can't help wondering if Google, with all their PhD engineers and scientists couldn't use a few more folks with MBAs in production management and marketing. Remember the Nexus Q?

Superbowl streamed -- pirates do IPTV better than NBC

When I reported that the Superbowl would be streamed this year, I saw it as a milestone on the road to IPTV.

I was one of the 2,105,441 people who watched the stream on NBC.COM. I tuned in out of curiosity, but after watching for a few minutes and taking a few screen shots, I turned my computer off and watched the game on TV. (NBC reports that the average veiwer remained online for 39 minutes).

I was not impressed. The action was in a small window surrounded by ads and statistics on a black background. The viewer could switch camera angles by clicking on the insert window on the upper right.

IPTV done poorly -- by NBC

It was too busy and too small for my taste. There were also seemingly constant commercials and other distractions. I did not tune in at the very start, but by the third quarter, the Internet stream was a quarter behind the TV broadcast.

On the other hand, spokesmen for NBC and the NFL were pleased.

Kevin Monaghan, SVP, Business Development & Managing Director Digital Media, NBC Sports Group was pleased by the "record traffic that grew throughout the event." He was also happy with "record high engagement numbers" referring to nearly two million camera angle switches.

Hans Schroeder, NFL, SVP, Media Strategy and Development called the live stream "a tremendous success."

They might have been pleased, but I expected more because I have seen better live streaming of a sporting event. The basketball game shown below filled the laptop screen and was identical to and only four secnds behind the TV broadcast shown behind it.

IPTV done better -- by pirates

One small hitch -- the basketball game was pirated.   NBC and the NFL should check out the music industry experience with pirates. A good way to stop pirates is to offer people convenient, high quality content at a reasonable price.

Perhaps TV executives should think of pirates as market research consultants who are showing them what the public wants.  NBC needs to learn from the pirates that the distinction between "TV" and "the Internet" is broken -- it's all bits.