5 ms·

I'd been watching this subject with great interest when MSFT first made the announcement several years ago. And watching hopefully, at that. XBox Live accounts

I'd been watching this subject with great interest when MSFT first made the announcement several years ago. And watching hopefully, at that. XBox Live accounts for a large share of Netflix streaming usage, and in theory, MSFT could have developed shows the way Netflix is doing so. Unfortunately, as a lot of people in this space are learning, high-quality shows cost top dollar and take awhile to develop. They require a unified, sustained political commitment from the company, all the way up to top brass. Netflix is able to develop shows because Netflix's core business model involves shows. Original/exclusive offerings are seen as key to maintaining its share of subscribers against would-be competitors. There is a direct correlation between Netflix's content selection and Netflix's subscriber base. Microsoft, on the other hand, is a much larger and more diversified business, with a more complex org structure. XBox is one division of many, and XBox Entertainment Studios was one group of many under the XBox aegis. It's hard to argue, at the C-level view, that XBox Entertainment Studios was core to Microsoft's business. And I can't imagine it was ever going to secure the sort of long-term, serious commitment that it required. In some ways that's a shame. In other ways, I totally get it.

tdicola 12y ago
> XBox Live accounts for a large share of Netflix streaming usage Is that an anecdote or is there some data behind it? I would be surprised to hear a majority of Netflix users are using it from Xbox live accounts since for the longest time it was an extra cost on top of Netflix.
- jonnathanson 12y ago
  "Is that an anecdote or is there some data behind it? I would be surprised to hear a majority of Netflix users are using it from Xbox live accounts since for the longest time it was an extra cost on top of Netflix." I don't think it was ever a "majority," nor did I state it as such. But historically, it's been a significant percentage. As recently as late 2013, roughly 39% of Netflix streamers did so through a video game console. PS3 and XBox were basically neck-and-neck for their slice of that 39% [1]. The numbers were higher in earlier years, before the advent of smarter TVs and media players. Around the time Microsoft would have been conceiving of XBox Entertainment Studios -- let's call that late 2011 to maybe early 2012 -- XBox had a larger share of Netflix streaming traffic than it does today. And the numbers went the other way, as well: a large percentage of XBox Live users used Netflix, possibly to the threat or exclusion of Microsoft's own channel offerings. [1] Source: NPD Group, as referenced in http://www.huffingtonpost.com/2013/11/13/netflix-redesign_n_4262877.html http://www.huffingtonpost.com/2013/11/13/netflix-redesign_n_...
  - gagaga 12y ago
    The Xbox 360 was also the first game console to have a Netflix app. I think MS has released stats stating that over half the time spent on the 360 is streaming video, which is most likely Netflix usage.
- sremani 12y ago
  Majority of XBL users may be using it and that is what Microsoft observed. I do not have any data to back-up, but in general Netflix is one of the premiere apps that I constantly use on my XBox.
VonGuard 12y ago
The MS first-party games were supposed to be the way the company made money on the Xbox, originally. Halo, Fable, all the tent poles of the Xbox platform started at MS. But those studios they'd purchased to make those games are all now off on their own, and MS is left with an internal games development group. Traditionally, MS has just hired this group up: they had Jordan Weissman, Elan Lee, and Rob Rinard working on games back in the day. Those folks left long ago. Thing is, traditionally, you make money from consoles on games, not on consoles. In fact, you sell the consoles at a loss until late in the cycle. That's changed now that youn can make a chunk on app-store sales. Every game sold in MS' online Arcade is giving MS a cut of around 25%, and these games sell much faster, more continually, and require no publisher BS or retail deals. The industry has changed, and MS' internal studios weren't exactly producing gold. Best thing they'd done in a long time was 1 versus 100, which was murdered likely because it didn't make any money.
- jonnathanson 12y ago
  All true. I think at one point MS figured that original shows were a way into the "war for the living room" that everyone was talking about back then. XBox had a decent share of Netflix streaming traffic, and a strong share in games, and it seemed like a decent idea to solidify the XBox platform's lead as a multi-category entertainment device by covering all bases. In retrospect, I think people have been streaming Netflix on XBoxes because it's been convenient. And because, for several years, few alternatives existed that streamed Netflix on your TV, and that didn't require the purchase of yet another specialized piece of hardware to cram into the media cabinet. Netflix on XBox was easy, and that was the source of the correlation. Nothing more and nothing less. Microsoft can be forgiven, IMO, for having read more into the correlation than might have been there. For all of Microsoft's missteps and organizational challenges, you can't fault it for having imagination in this case.
- thekaleb 12y ago
  Actually Halo started at Apple[1]. [1]: http://kotaku.com/5796019/when-halo-was-on-the-mac-and-was-a-totally-different-game http://kotaku.com/5796019/when-halo-was-on-the-mac-and-was-a...

tdicola 12y ago

> XBox Live accounts for a large share of Netflix streaming usage Is that an anecdote or is there some data behind it? I would be surprised to hear a majority of Netflix users are using it from Xbox live accounts since for the longest time it was an extra cost on top of Netflix.

jonnathanson 12y ago
"Is that an anecdote or is there some data behind it? I would be surprised to hear a majority of Netflix users are using it from Xbox live accounts since for the longest time it was an extra cost on top of Netflix." I don't think it was ever a "majority," nor did I state it as such. But historically, it's been a significant percentage. As recently as late 2013, roughly 39% of Netflix streamers did so through a video game console. PS3 and XBox were basically neck-and-neck for their slice of that 39% [1]. The numbers were higher in earlier years, before the advent of smarter TVs and media players. Around the time Microsoft would have been conceiving of XBox Entertainment Studios -- let's call that late 2011 to maybe early 2012 -- XBox had a larger share of Netflix streaming traffic than it does today. And the numbers went the other way, as well: a large percentage of XBox Live users used Netflix, possibly to the threat or exclusion of Microsoft's own channel offerings. [1] Source: NPD Group, as referenced in http://www.huffingtonpost.com/2013/11/13/netflix-redesign_n_4262877.html http://www.huffingtonpost.com/2013/11/13/netflix-redesign_n_...
- gagaga 12y ago
  The Xbox 360 was also the first game console to have a Netflix app. I think MS has released stats stating that over half the time spent on the 360 is streaming video, which is most likely Netflix usage.
sremani 12y ago
Majority of XBL users may be using it and that is what Microsoft observed. I do not have any data to back-up, but in general Netflix is one of the premiere apps that I constantly use on my XBox.

VonGuard 12y ago

The MS first-party games were supposed to be the way the company made money on the Xbox, originally. Halo, Fable, all the tent poles of the Xbox platform started at MS. But those studios they'd purchased to make those games are all now off on their own, and MS is left with an internal games development group. Traditionally, MS has just hired this group up: they had Jordan Weissman, Elan Lee, and Rob Rinard working on games back in the day. Those folks left long ago. Thing is, traditionally, you make money from consoles on games, not on consoles. In fact, you sell the consoles at a loss until late in the cycle. That's changed now that youn can make a chunk on app-store sales. Every game sold in MS' online Arcade is giving MS a cut of around 25%, and these games sell much faster, more continually, and require no publisher BS or retail deals. The industry has changed, and MS' internal studios weren't exactly producing gold. Best thing they'd done in a long time was 1 versus 100, which was murdered likely because it didn't make any money.

jonnathanson 12y ago
All true. I think at one point MS figured that original shows were a way into the "war for the living room" that everyone was talking about back then. XBox had a decent share of Netflix streaming traffic, and a strong share in games, and it seemed like a decent idea to solidify the XBox platform's lead as a multi-category entertainment device by covering all bases. In retrospect, I think people have been streaming Netflix on XBoxes because it's been convenient. And because, for several years, few alternatives existed that streamed Netflix on your TV, and that didn't require the purchase of yet another specialized piece of hardware to cram into the media cabinet. Netflix on XBox was easy, and that was the source of the correlation. Nothing more and nothing less. Microsoft can be forgiven, IMO, for having read more into the correlation than might have been there. For all of Microsoft's missteps and organizational challenges, you can't fault it for having imagination in this case.
thekaleb 12y ago
Actually Halo started at Apple[1]. [1]: http://kotaku.com/5796019/when-halo-was-on-the-mac-and-was-a-totally-different-game http://kotaku.com/5796019/when-halo-was-on-the-mac-and-was-a...