Netflix vs. Amazon in 2015: A tale of two video-streaming giants

Amazon vs. Netflix


As we near the end of another year, VentureBeat takes a look back at some of the highlights from two companies at the forefront of the cord-cutting movement: Netflix and Amazon.

From awards and big-name content acquisitions to new international markets and strategic partnerships, this is a tale of two global video-streaming giants in 2015.

Original content comes of age

Jeffrey Tambor & the rest of the Transparent cast: Emmy's, 2015

Above: Jeffrey Tambor & the cast Transparent at the 2015 Emmys

Image Credit: Shutterstock

If we learned anything in 2015, it’s that original content has well and truly come of age.

Both Amazon and Netflix started the year with a bang by securing gongs at the Golden Globes. Amazon walked away with the top TV comedy award for Transparent — the first online series ever to win a Golden Globe. Jeffrey Tambor also scooped up the award for best comedy actor for the show. Not to be outdone, Kevin Spacey emerged triumphant after seven previous nominations, winning the award for top actor in a drama for Netflix’s House of Cards.

Later in the year, Amazon notched five Emmy awards compared to Netflix’s four, which is notable when you consider that Netflix had a third more nominations than Amazon. To celebrate, Amazon cut the price of its annual Prime membership by a third. But only for 24 hours.

In addition, Netflix could have a serious Oscar contender with Beasts of No Nation, though we’ll need to wait until the new year to find out. This wouldn’t be the company’s first Oscar win, however, as it also won an Academy Award for a documentary short subject last year.

Awards aside, the online video titans invested big in their slate of content. Perhaps most notably, Amazon emerged victorious in the race to sign up former Top Gear presenters Jeremy Clarkson, James May, and Richard Hammond, who will present a new, as-yet-unnamed show for the car-loving fraternity. The move shows how committed online-video giants are to grabbing the rights to big names. Amazon reportedly paid an eye-popping $250 million for the show. Elsewhere, Netflix confirmed it had raised $1 billion in debt to fund its original-programming ambitions.

Both companies racked up a number of other big-name signings. Amazon signed up Woody Allen to create his first-ever TV series and later committed to producing 12 feature films a year to be shown in movie theaters. Part of this plan, the company said, was to narrow the theatrical release window to as little as four weeks, which it can do when it has full control over the content.

Over at Netflix, the company brought Leonardo DiCaprio on board in a multiyear deal to make a new documentary series, while rumors emerged that it was planning to create a new live-action adaptation of the classic Nintendo game, the Legend of Zelda.

Away from the hullaballoo of big-money content acquisitions, the surest sign yet that unique programming is emerging as the key differentiator came when Netflix revealed it would not renew its agreement with the cable network Epix, meaning subscribers would lose access to high-profile movies such as Hunger Games, World War Z, and Transformers. Why? Netflix explained:

While many of these movies are popular, they are also widely available on cable and other subscription platforms at the same time as they are on Netflix and subject to the same drawn-out licensing periods.

While Netflix is still reliant on third-party content for the most part, it’s distancing itself from many of the titles that can easily be watched elsewhere. It primarily wants content it can dangle in front of people and say, “Hey, lookie what we got here.”

Availability

Tokyo, Japan, where both Amazon & Netflix are now available

Above: Tokyo, Japan, where both Amazon & Netflix are now available

Image Credit: Shutterstock

At the start of 2015, Netflix was available in more than 50 markets around the world, while Amazon’s Prime Video was only open in four: the U.S., the U.K., Germany, and Austria.

With trading restrictions easing between the U.S. and Cuba, Netflix seized this opportunity by launching in the tiny Caribbean nation, though it was largely a symbolic gesture given that high-speed Internet is something of a rarity in the country. However, Netflix did announce a number of other big market launches this year. It arrived in New Zealand and Australia in March; Japan in September; Italy, Spain, and Portugal in October; and revealed that Hong Kong, Singapore, Taiwan, and South Korea would be added in early 2016.

Amazon Video, meanwhile, barely boosted its market availability. It did follow Netflix’s lead, however, and launched Amazon Prime Video in Japan.

One question Netflix has faced over the years is: Will it ever offer offline access to its content? Netflix has never skirted the question and has always maintained that downloads aren’t on its roadmap. The issue reared its head again this year, when Amazon announced it was to let Prime subscribers download some TV shows and movies on its mobile apps. Once again, Netflix said it has zero intentions to introduce offline mode.

Some notable partnerships came to light in 2015 to help expand the availability of both video-streaming services. Netflix signed up Marriott hotels to include its app on their in-room televisions, while Amazon inked a deal with JetBlue to let travelers watch videos without paying for Wi-Fi. Not to be outdone, Netflix partnered with Virgin America to include its service on U.S. flights.

Elsewhere, Amazon ironed out a curious little quirk with Android this year. Until fairly recently, Amazon didn’t offer a streaming app to Android users. When it finally did launch one in late 2014, the process of accessing it was a mess. You had to find and download the Amazon Appstore to your Android device, install the Amazon Video Player, and search for videos directly within the main Amazon shopping app, which was linked to the video player.

Things improved this year when Amazon finally launched a standalone video-streaming app for Android. It’s pretty slick, but you can’t download the app easily. You still have to go through the same convoluted process as before. It’s nuts — and certainly too much friction for many non-techie people.

Netflix has stated its intent to be a truly global service — that is, in 200-ish markets — by the end of 2016. To achieve such scale, its own stack of original content will help, but it also needs to remove the friction from global licensing deals. Netflix’s chief content officer Ted Sandros has previously discussed the company’s efforts to buy the rights for shows in multiple regions at once, but it’s not an easy process because of the way the networks and studios have set themselves up internationally.

“I don’t know if it is more difficult than expected but it has not been as easy road,” explained Sarandos during a recent investors’ call. “All of the studios and networks have situated themselves to be regional sellers. They have never been global sellers and it makes complete sense that Sony and Disney and Warner Brothers would have regional sales teams. Now we are global buyers and buying global rights to shows and movies, and there is some resistance to it, mostly from the regional sellers, people who are in charge of regional selling, who don’t want their jobs marginalized.”

In short, Netflix wants to expedite the rights-buying process to serve its growing global user base, but regional rights-holders are impeding this.

Feature focus

“If you stand still, you stagnate” is a common philosophy in technology as companies iterate and improve their products to meet the latest standards and preferences. With that in mind, both Netflix and Amazon rolled out a slew of notable updates in 2015.

Back in April, Netflix introduced a new narration feature that describes what’s happening on screen for the visually impaired. This was followed in June by the platform’s first major website update in four years, which saw an all-new design rolled out to make searching easier.

Over at Amazon, the Internet giant revealed back in April that HDR-quality streams would arrive on Prime videos this year. True to its word, two months later it launched HDR for a series (Mozart in the Jungle) in the U.S. For the uninitiated, HDR improves the contrast of a video, making shadows and highlights more distinctive — blacks appear blacker, and whites appear whiter. But if you don’t have a HDR TV, well, it will be lost on you.

Perhaps the most exciting Amazon Video launch of the year, from a feature-update perspective, was when it brought its “X-Ray for Movies and TV” service to the big screen for the first time.

In a nutshell, X-Ray for Movies and TV taps IMDb (the Internet Movie Database) data to deliver contextual information about what’s currently happening on-screen. Want to know who that familiar face was who made a brief cameo and what other movies you’ve seen them in? This is what X-Ray is all about.

X-Ray first arrived for Kindle Fire in 2012, but it’s now available on Amazon Fire TV and Fire TV Stick too, meaning you now have this very cool little tool in your living room.

X-Ray Actors
Who are these actors? Ask X-Ray, an Amazon Video feature. 

Netflix also put a focus on the big-screen experience this year. In January, the company launched the Netflix Recommended TV program, which serves up an independent evaluation of the best smart TVs for streaming Netflix. Three months later, Netflix revealed a triumvirate of televisions it reckons are great for Netflix.

Though Amazon and Netflix are competitors, the two companies — alongside Cisco, Google, Intel, Microsoft, and Mozilla — joined forces to create the Alliance for Open Media. The open source project aims to deliver a next-generation video codec by 2017.

And the rest

In October, Netflix revealed it was upping its lower-tier subscription from $9 a month to $10 a month in the Americas, but only for new users. Existing users will continue on their current price plan until October 2016.

While Amazon’s reputation as an employer took a severe bashing in 2015, Netflix won major plaudits for its new maternity and paternity leave policies, which essentially promised new parents unlimited paid leave for the full first year after a child’s birth.

Elsewhere, in an interesting move, Amazon banned sales of Apple TV and Google’s Chromecast streaming devices. While they directly compete with Amazon’s own Fire TV stick and box, Amazon claims its main gripe is that Apple and Google devices don’t play friendly with Amazon Video. An eye for an eye, and all that.

Though there are pros and cons to both Netflix and Amazon Video, an exciting rumor started circling in late November that Amazon was lining up a major upgrade to its video offering. In short, Amazon was planning to offer third-party on-demand video services as part of Prime. Details were recently confirmed, and dozens of video-on-demand (VoD) partners have been brought on board, including Showtime and Starz. It’s a smart move by Amazon: By centralizing a number of VoD subscriptions through a single Amazon account, this makes it easier for consumers to monitor and manage their various subscriptions. Amazon is also integrating the various services, meaning users can search for content or create a single watchlist across all their subscriptions.

“Winners and losers”?

People often talk in terms of “winners” and “losers” when comparing products and companies. But it has become increasingly clear, in the video-streaming realm at least, that it’s not a case of one or the other. There’s every reason to suggest that consumers will be willing to pay for both Netflix and Amazon Prime — not to mention other services such as HBO Now, which launched in the U.S. this year.

What viewers want is real differentiators. And with a growing slate of original programming, both Amazon and Netflix are setting themselves up well to service the cord-cutting generation.

To combat app overload, Apple and Google should look to Amazon

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It’s hard to believe that when the iPhone launched in 2007, Apple planned to eschew third-party native apps altogether. From that nearly missed opportunity, iOS went on to not only change course and offer the App Store, but to create a blueprint for mobile software distribution that has been adopted by every smartphone platform since.

Currently home to a staggering million-plus apps (1.4 million at last count), and still trailing Android’s massive catalog, the App Store is a shining paragon of market-building, having enabled an economy worth billions of dollars annually to both Apple and its developer community.

But Apple’s and Google’s mobile software shops have become victims of their own successes; both stores are bursting at the seams, with noise far outweighing signal.

Although significant change is unlikely to come to either of these stores, there are targeted ways in which the glut of apps could be made more manageable for consumers. In fact, one need look no further than Amazon’s Android Appstore for a better model of app management.

The problems with choice

Want an auto redialer on Android? There are no less than 36 apps whose names signify that functionality. How about a voice recorder for iPhone? Too many results to count. And games? You’ll get buried by Tetris clones, alone.

This is a problem, from a number of perspectives — and it has little to do with volume. Having more apps available is not necessarily a bad thing, but having more of the same (and of course, spammy apps) is undesirable.

This phenomenon is explored in Barry Schwartz’s 2004 The Paradox of Choice, in which the author, a social psychologist, argues that people derive little benefit — and can actually develop anxiety — from expanded options, when the choices are relatively similar to one another.

It’s also a problem for developers who, barring extensive marketing budgets, end up buried in a sea of similar products — exerting significant downward pricing pressure on the entire lot. Combined with Apple’s unwillingness to let publishers utilize the in-app purchase mechanism for trialware, systemic price compression leaves little incentive for highly specialized or especially sophisticated programs. It’s a problem currently faced by would-be iPad Pro developers.

To wit, a 2012 GigaOm survey showed that the majority of developers earned $500 or less per month from their App Store participation that year. While this may be tolerable for developers looking to supplement other income, it can’t sustain the resources necessary to build intricate, feature-rich apps.

Finally, it’s a problem for the very platform stewards enjoying the otherwise advantageous position of market leaders, in that customers oftentimes look to them to fulfill the need for app discovery — an increasingly complicated task.

In an interview with VentureBeat, senior director of industry analytics at analytics firm App Annie, Ross Rubin, said, “As the number of apps have proliferated, surfacing them has been a huge challenge and given rise to the practice of app store optimization, much as search engines gave rise to search engine optimizations.”

“There are, of course, the top-ranked charts, apps being used near you, cohort apps based on what users who own the apps also downloaded, kid-friendly apps, and apps that support new devices such as the Apple Watch and Apple TV,” he continued. “These are all ways that the stores are seeking to provide more visibility.”

Perhaps the most disheartening aspect of app overload is the fact that the stores’ gatekeepers — Apple, especially, but more recently, Google, tooalready present a pretty high barrier to entry. Even with plenty of hoops to jump through, developers have still managed to stuff these repositories with millions of apps. There’s little hope of separating the wheat from the chaff at the entry point, at least any more than is already being done.

A page from Amazon’s book

With little hope of slowing down the endless stream of new applications, app markets can only attempt to provide their users with better discovery tools. And this is where I think Google and Apple currently fall a bit short.

As it stands, neither store offers a comprehensive set of filtering options — that’s especially surprising in Google’s case, given the rich, advanced capabilities of its web search engine.

What’s not surprising, however, is that Amazon — an entrenched retailer intimately familiar with the problem of organizing large catalogs of physical and digital goods — does a better job than either Apple or Google in this department.

Amazon’s Appstore for Android applications is one of the most ambitious third-party software depots for a major platform, to date. It’s the default store on the company’s Fire lineup of devices, and comes preloaded alongside the Play Store on other Android products whose OEMs have struck a deal with the sprawling etailer.

The Amazon way

phone_f

Amazon’s AppStore works like any other department on Amazon.com (e.g.: Clothing, Books, Electronics). There, Amazon highlights recommended apps based on a particular shopper’s browsing and buying habits. Why isn’t Apple leveraging its plethora of data on app usage habits to mimic this functionality?

filters

On the Web, Amazon’s omnipresent sidebar offers a plethora of options for searching and drilling down results (filters that are duplicated in dropdown menus on Amazon’s phone and tablet apps). And it highlights the absence of seemingly basic filtering tools in Apple’s App Store and Google Play, such as the ability to parse by minimum average review score (no matter what that minimum may be).

I suspect that the average user doesn’t want to do a lot of work to find apps that might interest them, and in fact, that most app downloading past the initial device setup period is done piecemeal. But for those who want to put in a little more work, who care enough about finding new apps to bother searching and browsing for them, the experience would be a lot more fruitful if they had more than the very basic tools currently offered — tools which haven’t changed much since the stores’ respective debuts.

Given their proven success as revenue-generating machines (at least in the aggregate), and the growing pool of talented programmers, mobile app markets are only going to continue to swell larger and prove more unwieldy. That makes the need for better discovery tools an increasing priority, lest the “paradox of choice” serve to keep even more device owners from fully engaging.

Oculus Touch delayed to second half of 2016

Oculus Touch isn't coming out until Q2 2016.



Check out all of our GamesBeat Rewind 2015 end of the year coverage here.

Oculus VR announced today that its Oculus Touch hand controls for virtual reality will be delayed until the second half of 2016.

The company said in a blog post that it needs more time to perfect its Touch controls, which allow you to use your hands in a virtual reality simulation. That means that the Oculus Rift headset will ship with an Xbox One controller — a traditional video game controller — when it debuts in the first quarter. Preorders for the Oculus Rift are beginning “very soon,” according to Oculus VR, which Facebook bought for $2 billion in 2014.

The delay is significant because lots of developers are dependent on Oculus in the VR ecosystem. Tech advisor Digi-Capital estimates that VR will be a $30 billion business by 2020, but that is dependent on good platform launches by companies such as Oculus.

The post said, “On Touch hardware, we’ve made significant advances in ergonomics, and we’re implementing many changes that make Touch even more comfortable, reliable, and natural. We’re also implementing changes that improve hand-pose recognition.”

Oculus VR is also setting up a larger pre-production run so it can get more prototypes to developers. Oculus said there will be a lot of “groundbreaking new content launching alongside Touch.” Early previews will be shown at the Oculus Connect 2 in September. The Oculus team said the Touch will be worth the wait.

That means that Oculus VR will likely have less cool stuff to show at the 2016 International CES, the big tech trade show in Las Vegas next week.

WhatsApp goes down for some on New Year’s Eve

WhatsApp:-Android


WhatsApp isn’t working today for some users. We first spotted the problems at 9:58 a.m. Pacific — we couldn’t send messages for a good few minutes, and then they went through eventually. That said, the outage seems to be impacting certain regions more than others, and while some users have regained access, it’s clear that for others this is more than just a blip.

Complaints about the outage have been ongoing for a few hours now, according to searches on Facebook and Twitter. Sites like Down Detector confirm the problem, while others aren’t registering anything as again, not all users are affected.

In fact, Down Detector shows just how the outage is hitting certain regions harder than others:

whatsapp_outage_nye

Indeed, our reporters in Europe are having more problems than our staff in North America, for example. But reports are coming in from all over the world.

New Year’s Eve is not a good day for an outage, especially for a messaging service. Hopefully WhatsApp resolves the root cause of the problem before midnight arrives for everyone around the globe.

We have reached out to Facebook, which owns WhatsApp, for more information. We will update you as we learn more about the issue.