Hasta La Gadget!

You’re outraged (OUTRAGED!) that Netflix’s price hike has stolen your cheap movie rentals. In fact, you’re going to delete your subscription. Forever. Now what? Here’s how to replace Netflix in your life, from streaming to shiny plastic discs. More »

This week on the Gadget Lab’s podcast, the crew talks about Netflix’s new pricing plan, Jawbone’s health-and-wellness bracelet and Toshiba’s new tablet product.

Netflix recently announced major changes to its prices, and staff writer Mike Isaac gets to the bottom of the company’s true motivations. Here’s a hint: say goodbye to your DVDs.

Next up is Brian Chen with his take on a new bracelet from Jawbone, a funky looking device that tracks your habits to see how healthy you are. Will it take off? Maybe — if the company improves the look.

Finally, product reviews editor Michael Calore swings by with Toshiba’s brand new Android tablet, the Thrive. Loads of external ports make for extra connectivity to peripheral devices. That’s a big bonus for the hardcore geek with lots of extra hardware to support.

And we couldn’t help but mention the debut of Spotify, the heavily hyped streaming music service that just made its way stateside after being available in Europe for quite some time. We’ll be logging some serious listening hours this week.

Like the show? You can also get the Gadget Lab video podcast via iTunes, or if you don’t want to be distracted by our unholy on-camera talent, check out the Gadget Lab audio podcast. Prefer RSS? You can subscribe to the Gadget Lab video or audio podcast feeds

Or listen to the audio here:

Gadget Lab audio podcast #120

http://downloads.wired.com/podcasts/assets/gadgetlabaudio/GadgetLabAudio0120.mp3

The Nintendo 3DS may be suffering from a slight lack of hot games at the moment, but thanks to a little update it is certainly not suffering from a lack of great movies and TV shows to watch. The Netflix addition that Nintendo promised us back in the summer is now up for download, and download is just what we did. If you’re wondering just how Instant content looks on the small screen, click on through and find out.

Continue reading Netflix on Nintendo 3DS hands-on (video)

Netflix on Nintendo 3DS hands-on (video) originally appeared on Engadget on Thu, 14 Jul 2011 14:44:00 EDT. Please see our terms for use of feeds.

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Netflix's instant-streaming option is more appealing than ever, in light of a price increase for its DVD rentals. Photo courtesy of Netflix.

Netflix wants you to kick your DVD habit.

The company would much rather you launch the Netflix app on your Roku, Xbox or iPad and watch movies there instead.

That’s the simple explanation behind Netflix’s recent price hike for its DVD rental plan, analysts say. Ideally, the move will encourage customers to sign up for digital streaming plans, which would lower operating costs and increase profits for the company.

“The incentive for Netflix is to push their customers into digital distribution,” said NPD Group analyst Ross Rubin in an interview. “With a DVD customer, in terms of mailing DVDs, Netflix has to deal with damaged discs and inventory,” said Rubin. “There’s many expenses with that part of the business.”

Netflix’s DVD price hike comes off as an aggressive tactic to transition into streaming media, in a time when some brick-and-mortar shops are failing in the wake of digitally distributed media hitting the mainstream. In the past year, both Blockbuster and Borders have filed for bankruptcy and closed hundreds of shops, and many agree that the two companies failed because they were too slow to execute digital solutions to compete against tech-savvy giants Netflix and Amazon.

To its credit, Netflix has ruthlessly executed its digital regime for years. It started out as an online DVD rental service, and later expanded into an unlimited streaming video service accessible through multiple devices, such as the Roku, PlayStation 3, Xbox 360 and Apple TV.

Now Netflix’s goal is to push digital even harder by enticing customers to opt for the streaming plan. Instead of Netflix’s former plan — 10 bucks per month for all-you-can-stream online movies and endless DVDs by mail — the services have been split into two separate plans, ultimately making the streaming service more attractive to customers. For unlimited movie streaming service, you’ll pay eight bucks a month. For unlimited DVDs, you’ll pay eight bucks a month. So if you still want both, it’ll cost you $16 a month total.

Therefore, the incentive for customers who want more bang for their buck — i.e. more movies per month — rests in the streaming plan. If you go the DVD route, you’re only allowed one DVD out at a time. That means waiting for days before you get another flick.

And that’s exactly what Netflix wants.

“They’re driving people away from the model that’s no longer cost-effective for them,” Forrester analyst James McQuivey told Wired.com.

And get this: There’s opportunity for the price changes to sign up even more subscribers. Those who choose a streaming-only service are effectively getting a $2 price decrease on their subscription. For potential customers who don’t care about physical DVDs, a $2 drop may break the threshold that kept them from signing up before. That’s an influx of new cash and new customers for Netflix.

“They’ve probably done the math, and they say, ‘Hey, if we lose 10 percent of our DVD-only customers, but gain 30 percent in streaming customers, in the end, we can invest less in DVDs, have fewer warehouses and have less shipping costs,’” McQuivey added.

Those that still want DVDs but don’t want to lose their streaming service end up being cream to skim from the top for Netflix — an extra $6 per customer who wants to keep both plans.

Which feeds into the second half of the company’s strategy — further fleshing out its streaming services. Right now, Netflix’s big problem lies in access to streaming content. In order to secure more rights to films you can watch online, Netflix has to pony up cash to reluctant studios, all of which are nervous to give up potential DVD sales. If a number of current or future subscribers decide to fork over the extra six bucks for both services, Netflix can turn that cash around and put it to securing more digital content. That means a more robust digital platform, and ultimately, more customers.

Of course, running streaming services to multiple continents isn’t a cheap ordeal. But it’s much less difficult than, say, shipping physical media to different countries over the world. Not to mention their streaming services offer “more variable costs that scale with the business.” In other words, the bigger Netflix’s customer base gets, the easier the server and streaming costs will be to keep down.

And Netflix plans to scale the business for sure. Earlier this month, Netflix expanded its streaming services to 43 countries throughout Latin America for the first time, and the company plans to broaden its service in the future.

“Ultimately this will be a global brand, and everywhere will be streaming,” Netflix vice president of communications Steve Swasey told Wired.com. “We want to emphasize that we’ll be a global streaming service.”

As for the current flurry of consumer backlash, Netflix will weather the storm. Twitter is completely aflutter with customer complaints, and the comments section on Netflix’s blog post announcing the price changes is spinning rapidly out of control. But Swasey said the company “expected the reaction” it’s currently receiving from angry customers, and all of the changes came after months of extensive testing and internal deliberation.

And really, it’s not like everyone is going to up and quit the service immediately.

“The value they offer is too concrete, too good,” said Forrester’s McQuivey. “People aren’t going to walk away from it, because it’s not like you have a lot of alternatives. Netflix is in the driver’s seat, and they can do pretty much what they want.”

What do you think of the price increases? Let us know in the poll below.

In case you were wondering what the updated rates are buying, Netflix’s first step in making its case for your $7.99 a month in streaming fees appears to be a renewal of its content deal with NBCUniversal. The new deal secures availability of previous seasons of popular shows including 30 Rock, The Office, Psych and other selections we’ve gotten used to seeing on the service for the next couple of years. There is one notable loss however, as the LA Times points out an arrangement that brought new episodes of Saturday Night Live to the service the day after they aired has come to an end. Rumors had swirled that Netflix could revive The Event after its cancellation by NBC, but while existing episodes will be available there’s nothing mentioned about putting it next to the streamer’s own House of Cards. Given Comcast (and now NBCU) leader Brian Robert’s reference to Netflix as the rerun TV and Netflix CEO Reed Hastings’ embracing of the term this deal isn’t surprising, but our only question is whether it is enough to keep current subscribers around.

Continue reading New Netflix, NBCUniversal deal announced; extra $6 a month buys some old eps of The Event

New Netflix, NBCUniversal deal announced; extra $6 a month buys some old eps of The Event originally appeared on Engadget on Wed, 13 Jul 2011 17:20:00 EDT. Please see our terms for use of feeds.

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