Survey: ‘Netflix Totally Misread its Customer Base’

Netflix’s widely reported public relations gaffes last September have not been forgotten while Amazon can apparently do no wrong, according to an annual winter holiday consumer survey of the top 40 e-commerce websites.

The Los Gatos, Calif.-based rental service endured a mass exodus of subscribers and widespread criticism in September after raising the monthly rate of its most-popular disc/streaming rental program, and then compounded the problem with an aborted spin-off of its by-mail disc service.

As a result, Netflix saw the rug pulled from under its perennial No. 1 ranking, tumbling 8% to 79 on a scale of 100, according to Ann Arbor, Mich.-based research firm ForeSee.com, which surveyed 8,500 online respondents from Nov. 30 through Dec. 12.

A score of 80 and above is considered excellent in terms of retaining and luring consumers, while a score below 80 risks losing consumers and market share. Survey respondents are queried on four key elements: perceptions of content, merchandise, site functionality and prices.

Netflix took a hit on all four: its content score was down 7%, its functionality score was down 3%, its merchandise score was down 6%, and its price score was down 12%. The report indicated that the 12% drop due to pricing is “alarming,” since most people visiting Netflix are subscribers and thereby committed to the prices associated with membership.

Netflix’s drop in satisfaction also registers a 9% drop in future brand commitment, a 10% drop in customers’ likelihood to use Netflix the same time they purchase a similar product, an 11% drop in customers’ likelihood to recommend the company, and a 5% drop in customers’ likelihood to return to the website again, according to ForeSee.

“Netflix seems to have forgotten how they created a much-loved brand and why people loved their service so much,” read the ForeSee report. “In fact, Netflix totally misread its customer base, damaging its brand among both consumers and investors at a time when providers of streaming and rented-video content proliferate the market.”

Meanwhile, Blockbuster.com resurfaced with an aggressive marketing campaign and is hoping to take advantage of Netflix’s mistakes. Blockbuster is down 1 point this year (from 76 to 75), which means only four points separate it from Netflix. Last year, they were separated by 10 points.
“Still Blockbuster won’t get very far unless they step up the customer experience they are providing as much as they step up their marketing,” read the report.

Amazon, which has trailed or tied Netflix for the last six years, moved up 2 points to 88 – an all-time e-commerce record – and topping last year’s all-time top score of 87 held by Netflix in the spring.

“Since Amazon and Netflix are now in direct competition for market share when it comes to streaming video and rentals, this report could spell troubled months ahead for Netflix,” said ForeSee.

Fourteen other websites registered scores of 80 or above, including QVC with 83, Avon (83), Apple (83), VistaPrint (83), JC Penny (83), Newegg (82), L.L. Bean (81), Victoria’s Secret (81), Barnes and Noble (81), eBay (80), Williams-Sonoma (80), Hewlett Packard (80), Dell (80) , and SportsmansGuide.com (80).

Among the laggards, Gap and Overstock.com tallied scores of 73 and 72, respectively. Notable achievers since ForeSee began its survey/ranking in 2004 include Target.com, up 6 points to 76; BestBuy.com, up 7 points to 79, and Costco.com, up 10 points to 79.

 

 

Embargoes Drive Divergent Top Kiosk Rentals in 2011

Redbox and Blockbuster Express together operate about 50,000 kiosks nationwide, yet their respective customers favored completely different movies in 2011 – underscoring the impact of street-date availability of new releases.

Market leader Redbox, which operates about 40,000 kiosks in more than 27,000 locations, Dec. 29 said Sony Pictures Home Entertainment comedy Just Go With It, starring Adam Sandler and Jennifer Aniston, was the most popular title in 2011, according to a survey. It was also Redbox’s top rented comedy – a reality driven in part by the fact Sony has an exclusive street-date agreement with the kiosk vendor.

Indeed, Redbox’s top drama (The Tourist), top horror (Insidious), and top action (The Green Hornet) – all came from Sony. The Tourist, starring Johnny Depp and Angelina Jolie, was released theatrically last December. Redbox also has distribution deals with Paramount Home Entertainment, Lionsgate and Summit Home Entertainment.

None of the aforementioned titles ranked in the top 10 for Blockbuster Express, which operates 10,000 kiosks. Top Express rentals included Bridesmaids from Universal Studios Home Entertainment; Harry Potter and the Deathly Hallows: Part 1 and Inception – both from Warner Home Video; and Rise of the Planet of the Apes from 20th Century Fox Home Entertainment.

All three studios have 28-day embargoes with Redbox, but operate separate agreements with Express, which include higher street-date pricing and sellthrough components. Express kiosks are owned and operated by NCR Corp. under a license agreement with Blockbuster LLC.
Noteworthy, four Paramount titles ranked among the top Express rentals in 2011 – but failed to rate highly among Redbox customers. Indeed, Inception was the only title to figure among both Redbox and Express customers.

Finally, actor Kevin James was honored with the inaugural Redbox Lifetime Achievement Award for top rental titles such as Grown Ups, Zookeeper, The Dilemma and Paul Blart: Mall Cop – the latter the fastest Redbox title to reach 1 million rentals.
Natalie Portman was singled out as the “Most-Rented Actress at Redbox in 2011” for titles Black Swan, No Strings Attached and Thor. Owen Wilson was dubbed “Most-Rented Actor at Redbox” for Little Fockers, How Do You Know and Cars 2.

Blockbuster Express Top 10 Rentals in 2011
1. Bridesmaids
2. Harry Potter and the Deathly Hallows: Part 1
3. The Help (DreamWorks/Paramount)
4. Inception
5. The King’s Speech (The Weinstein Co./Anchor Bay Entertainment)
6. Rise of the Planet of the Apes
7. Transformers: Dark of the Moon (Paramount)
8. Thor (Walt Disney/Marvel)
9. Super 8 (Paramount)
10.  Captain America: The First Avenger (Paramount)

Redbox Top Rentals

Overall: Just Go With It

Action:
1. The Green Hornet
2. I Am Number Four (Disney/DreamWorks)
3. Battle: Los Angeles (Sony)
4. Red (Summit)
5. True Grit (Paramount)

Comedy:
1. Just Go With It
2. No Strings Attached (DreamWorks)
3. The Dilemma (Universal)
4. Due Date (Warner)
5. Dinner for Schmucks (DreamWorks)

Drama:
1. The Tourist
2. The Lincoln Lawyer (Lionsgate)
3. The Fighter (Paramount)
4. Inception
5. The Social Network (Sony)

Horror:
1. Insidious
2. Case 39 (Paramount)
3. Paranormal Activities 2 (Paramount)
4. The Rite (Warner)
5. Devil (Universal)

Family:
1. Rango (Paramount)
2. Despicable Me (Universal)
3. Zookeeper (Sony)
4. Megamind (Paramount)
5. Rio (20th Century Fox)

 

Intel working to keep the netbook alive with "Cedar Trail" Atom platform

Netbook sales have been declining, with major vendors deciding to leave the netbook market entirely. That hasn't stopped Intel, however, from launching a new family of processors designed for small and cheap laptops.

The new chips are the Atom N2600 and N2800, based on the Intel's third-generation Atom architecture, codenamed Cedarview. The Cedar Trail-M platform pairs one of these processors with company's pre-existing NM10 chipset. As with the previous generation Pineview processor, each dual core, four thread chip integrates a GPU based on a PowerVR design. Cedarview's GPU runs at twice the speed and offers twice the performance of Pineview's. Cedarview adds to this a dedicated media engine for hardware-accelerated decoding of motion video, including support for 1080p H.264.

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Etc: LG has announced its Android 4 upgrade trajectory: the Optimus 2X, Optimus LTE, and Prada Phone will get the OS by June 2012, and few other handsets will follow by September.

LG has announced its Android 4 upgrade trajectory: the Optimus 2X, Optimus LTE, and Prada Phone will get the OS by June 2012, and few other handsets will follow by September.

Read More: The Verge, LG Facebook page

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Two decades of Linux: the big open source stories of 2011

In 1999, Linux founder Linus Torvalds joked about plans for world domination. But as the Linux kernel celebrated its 20th birthday this year, Linux, and open source in general, have achieved a limited version of world domination. As we reported in August, Linux in its many forms now powers a majority of the world's supercomputers. Apache web servers running on Linux and other Unix operating systems serve up the majority of the web sites on the Internet, and Linux powers some of the biggest sites on Earth—including Facebook, Google and Wikipedia. And embedded versions of Linux are part of the explosion of network-connected consumer devices, most notably as the basis of Google's Android mobile OS.

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In the market for new games? Share the best deals of the season

Game prices drop faster than ever, and with every retailer in the country fighting each other for your gaming dollar the deals can be hard to believe during the holiday season. This is the time to put your gift cards, stockings filled with cash, and perhaps even returns to good use to get the games you really want, and you may be able to get away with spending much less than you had assumed.

This is the place to share the sales, deals, and coupons that you find in your travels around the Internet. Is your favorite game on sale? Let us know why you loved it and where we can get it for cheap. Is your favorite retailer running a two-for-one deal? This is the place to let us know. We'll get you started, but we can't wait to see what deals you guys are able to dig up.

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Week in Exoplanets (with a side dose of the rest of science)

This week's science news was dominated results from NASA's Kepler probe, which is single-mindedly staring at a section of the Milky Way, watching for signs of planets passing in front of the stars they orbit. And, boy, is it finding them. But there was still lots of other science news, featuring naked mole rats, clusters of earthquakes, and enigmatic fossils from before the Cambrian.

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FCC proposes relaxing newspaper-TV ownership rules (Los Angeles Times)

The Federal Communications Commission is trying once again to blow out rules that prohibit companies from owning both a television station and a newspaper in the same big city. As part of a review of its media ownership rules, the FCC said it wanted relax the newspaper and television cross-ownership rule in top-20 markets. The agency tried a similar maneuver in 2007, but media watchdogs argued that it would lead to a loss of independent voices and too much media consolidation. The battle ended up in a federal court, which said the agency had not given the public enough time to comment on the proposed changes. This time around, the FCC will provide a 45-day window for comments....

New Stats: E-Book Revs Up 131% YTD, But Overall Trade Sales Decline (paidContent)

The newest statistics from the Association of American Publishers show that e-books saw triple-digit percentage growth in October, compared to the same time last year. But print sales continue to decline, leading to an overall drop in trade book sales year-on-year. Here’s how October 2011 stacked up compared to October 2010. Trade sales were down 7.8 percent compared to October 2010. Note a particular decline in the adult mass market category, down 37.6 percent compared to this month last year....

Megaupload Launches Megabox Online Locker and Store (Billboard)

Megaupload has launched Megabox, a web-based, online music locker and player with an integrated music store. Megaupload is a controversial file-hosting service that has over 50 million daily users and accounts for 4 percent of global Internet traffic, according to the company. Megabox will be familiar to anybody who has used Google Music, Amazon Cloud Drive, mSpot or any other online music locker on the market. Songs can be uploaded using Megakey, Megaupload’s file-uploading application, to the user’s online locker....

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