Personal recommendations have always been a part of ecommerce, but there has been little innovation since Amazon introduced retail and product personalization 10 years ago. But with the increasing mountains of data at digital retailers’ fingertips, ecommerce is about to get even more personal.

The fact is that right now there is little iteration from personalized ecommerce beyond what is taking place on Amazon. So you’ll see suggestions of what other shoppers who bought a certain item also purchased, or recommendations to similar items to what you have purchased, but there is a whole world of social data, and even more-in-depth purchase data that can be mined by retailers to help increase sales.

Kleiner Perkins partner Aileen Lee agrees with me, “In the future, the best  retail sites will know you much better and show you things that are much more relevant.” Lee has helped lead investments in a number of e-commerce companies including Offermatic, One Kings Lane, Plum District, Rent the Runway, and Trendyol and held operating roles at The Gap and North Face.

“We are just at the beginning of a revolution of e-commerce, and existing retailers are going to have to get better at personalizing the experience for consumers,” Lee says.

“Personalization was really important in enabling Amazon to differentiate itself and grow in past ten years,” David Selinger, CEO and co-founder of RichRelevance. Selinger also was Amazon’s Manager, Consumer Behavior Research and helped build some of the site’s personalization features a number of years ago. “Personalization will be the differentiating factor in e-commerce and digital commerce going forward, especially for multichannel retailers and new entrants online.”

Amazon and Netflix represent the first wave of personalization. I believe that we are going to enter into the next wave of a more personalized e-commerce experience as retailers and e-commerce sites move towards mining data to improve sales and conversions.

It’s highly likely that you have helped boost Amazon and Netflix’s conversion rates on movies, books, or other products thanks to personalized suggestions of items that you may like based on your previous purchase data, other consumers’ purchase history and more. In fact, it’s so seamlessly baked into the user experience for both companies, that I tend to not even notice how impactful personalization is on what I purchase.

That’s not to say that Amazon is the only retailer experimenting with personalization. eBay has also been personalizing the marketplace experience with recommendations of similarly viewed or bought items for some time, and is looking to expand personalization efforts with PayPal. And with the recent acquisition of Hunch, we know eBay is going to ramp up data mining.

Recently, I started to receive emails from Gilt Groupe that suggested similar earring to like those those I had added to my wait-list on the e-commerce site. The company also sends personalized email notifications on sales that are tailored to each customer. Gilt, who declined to comment for this piece, seems to realize that personalization is going to be a key product driver for the site in the future. And brick and mortar retailers like Saks Fifth Avenue, and many others are also starting to jump on the personalized email bandwagon.

The Challenges

The best way begin understanding the opportunity of personalization in the future is to realize the immense challenge that retailers face when approaching personalization. As DJ Patil, Data Scientist in Residence at Greylock Partners, explains, “When you go to Nordstrom you have a shopping assistant helps direct you, basically says ‘I’m here to help, what do you need and here’s where to find this.’ No online retailer has quite nailed that,” he explains.

For most retailers, the toughest hurdle is to have enough data on an individual to actually help personalize the experience. For the majority of buyers who purchase from a specific site once every few months, or even less frequently, a retailer may have no real sense of direction on how to present similar products.

Getting these data points is the biggest challenge that retailers face. But retailers do have significant data for the small amount of regular, routine customers for an e-commerce site, including clicks, purchase history, shopping cart information, shares and Likes, and more. Retailers face challenges on how to store and organize this data, and then turn this into personal recommendations

And data comes in various forms. There’s implicit data (which is gained from your everyday actions on a retailer’s site) and explicit data (which you offer to sites via surveys or quizzes). While retailers are doing more with the implicit data (i.e. reminding you when you left items in your shopping cart); no one has yet mastered the art of capturing that precious explicit data.

Google’s Boutiques.com tried its hand at this, as a search engine and fashion site which allowed users to receive personalized clothes and accessory recommendations based on preferences and actions. But Google subsequently shut the portal down last September.

Asking for users to fill out surveys of what they love or like perhaps isn’t the ticket to drawing explicit data, such as brands you love, colors, styles and more. As Patil explains, retailers who ask for this information need to present this as more of a conversation as opposed to replicating the feel of a doctor’s appointment where you are filling out your life history via forms.

Getting these signals from consumers is very difficult from a UI and user experience stand point, he says. His advice to retailers is to find a way to replicate how a store owner or shop keeper would engage you in a conversation when walking into a store and looking for something open-ended, such as a birthday gift. One way to do this is to present a personalized item suggestion but ask the consumer (in a Pandora-like fashion) if the recommendation sucks and how they can make the shopper’s life better “People want to help the system and love to correct things,” Patil says.

And similar to Pandora, people become more invested in a platform that knows their preferences and will be more likely to return.

There’s also the issue of finding the balance between providing serendipity in terms of discovery and personalization. Retailers still want their sites to be this Pandora’s box of discovering items, literally, but personalization can cut down on this discovery process. So retailers need to both anticipate what consumers may want to purchase on the site but also provide items that consumers will be able to feel like they ‘discovered’ on the site.

Patil draws an interesting comparison with how grocery stores have been able to structure their layouts to provide serendipity and useful discovery. “When you go to the supermarket, the stores know you are definitely going to milk aisle, so they often put it in the back of the store, so you can find serendipitous stuff on the way. Online retailers need to replicate that on e-commerce sites.” In the end, the goal is to be able to deliver personalization without being predictable.

At a macro level, retailers also face challenges in finding talent to sort this big data. The difference between doing data personalization well are radical shifts financially for retailers, Selinger explains. The engineers who are able to parse these massive amounts of data are hard to come by, and expensive.

Social

Social data (i.e. the Facebook Likes of products, what products people are recommending on Facebook or Twitter) is going to be a big part of personalization for retailers in the future. Already plenty of retailers are using Facebook social plugins and Connect integrations to leverage Facebook data to show visitors what friends bought or shared, what products relate to their Likes, and which friends they might want to invite.

The problem with this data is that much of it is unstructured, and there is really no one who has effectively nailed social personalization in the commerce arena the way Amazon was able to do with data from purchase behavior. Blippy attempted to socialize purchases, but it failed. Amazon also allows you to connect to Facebook to access your friends’ Likes and recommendations but I find this UI to be clunky, and not very useful.

Selinger thinks that mining social data for ecommerce may lose steam before it takes off, drawing the comparison to email. “In 2007, if you were to walk into VC’s office with an idea about ecommerce and email, you would have been sent out the door,” Selinger says. But he explains that while there is an inherent enterprise value in this social data, it will take a long time to take off, similar to the way it took awhile for personalized email and commerce models to enter the market. “When someone figures out how to do it and do it well, it will grow really quickly,” he maintains.

The challenge for retailers is making sense of the Facebook news feed — i.e. streamlining recommendations, attaching brands and tags to this data and then serving this to shoppers in a useful, personalized format. Basically, your social network can become your Consumer Reports.

The challenge for the data mining community, explains Patil, is actually figuring out the intent in much of the unstructured data that is posted about retail products and brands on Facebook. And it’s important to keep in mind that some of this data from Facebook users is private.

This past week, Facebook partnered up with sixty different startups to add their “stories” to Facebook Timeline, through apps that span different verticals from Food, Fashion to Travel. Part of this involved adding new actions (in addition to ‘like’) to Timeline story options. That includes the verbs ‘bought’ and ‘want.’

There is tremendous potential in developers and retailers being able to mine this data from ‘boughts’ and wants’ as opposed to the open-ended ‘like.’ You can see details on what social shopping mall Payvment is doing with the new protocols here, but basically, the ability to add these targeted buttons could be game-changing for social discovery in e-commerce.

Privacy

Echoing Lee’s thoughts, Patil is confident that there will be a new wave of personalization and e-commerce. But without data, there is no personalization. So consumers both on Facebook as well as on retail sites will have to be more willing to give up key data like purchase history, Likes and other social actions, and even location in order to get a more personalized shopping experience on retail sites.

The key will be getting consumers to understand that more data will improve their shopping experience, and making the choice of opting-in a no brainer.

Selinger agrees that privacy is going to be an important issue in the next tranche of personalization innovation. “Now more than ever, consumers are more cognizant of what’s happening with their data,” he says. But what retailers have in the favor is a strong foundation of privacy practices, because these companies have had to protect consumer financial and credit card data for time. Selinger believes that retailers will be very thoughtful about privacy and data sharing going forward.

Perhaps sites like Blippy and Boutiques.com were ahead of their time when it came to consumers willingly handing over the keys to their shopping and payment preferences. I envision a day when there will be an app that reads all of your purchase history via your email account and then serves you recommendations based on this data. There are some companies who are already parsing through receipts in your inbox to organize purchases, so why not take this a step further.

And these personalization strategies that are being adopted by retailers are already trickling down to other kinds of sites beyond e-commerce as well. In the same way that ecommerce sites are trying to maximize sales and profits with this data, content sites are also using social and other data to add relevance to their platforms.

So shoppers, be prepared to give up your data. In the coming year, we’re going to see many more retail sites ramping up data-driven discovery. And e-commerce sites who aren’t thinking about how to mine social and other forms of data are probably going to be left in the dust by the Amazons and Netflix’s of the next wave of personalization.

After some fairly sizable blunders last summer, Netflix suffered for the remainder of 2011, as its stock price took a serious dive and subscribers left in droves. That’s why it was at least a bit of a surprise when Netflix bounced back today in its fourth quarter earnings — beating Wall Street’s projections — in spite of expected losses throughout 2012 thanks to the costs of rolling out its service internationally (among other things).

Of course, while the creation of Qwikster (and splitting its DVD and streaming businesses) may seem ill-conceived in retrospect, as Erick pointed out today, Netflix’s Q4 earnings show that the company had some not-so-trivial economic incentives for separating the two. Breaking out DVD vs. streaming for the first time in Q4, Netflix showed that the two businesses have drastically different margins, with streaming at an 11 percent profit margin, compared to 52 percent for its DVD business.

On the other hand, everyone knows that streaming content has a far brighter future than DVDs, so likely Netflix (and others) just have to “bite the bullet” on that front, right? After all, when CEO Reed Hastings was asked about the future of DVD profitability and subscriber share on Netflix’s 4Q earnings call this afternoon, he simply stated: “We expect DVD Subscribers to decline every quarter … forever.”

In the last quarter of 2011, for instance, the DVD business lost 2.76 million subscribers, while streaming gained 220K. While it hopes streaming subscription rates will pick up over the next year (both domestically and internationally), there’s no reason to think that the declining DVD numbers are going to change.

Yet, the DVD business has fixed costs, and Netflix is forced to continuously jockey for rights to streaming content, so, in the near term, one would think that its DVD business would be significantly more profitable; however, Hastings said that, in reality, it’s just the opposite.

Streaming subscribers now outnumber DVD subscribers 2:1, and the CEO said that the marginal streaming subscriber is “almost pure contribution,” whereas the average DVD subscriber leads to a number of variable costs.

“Profitability of each new streaming subscriber is almost twice what it is for DVDs … we’d obviously like them to do both, but if they’re only going to use one, we’d much prefer they use streaming,” he said.

Netflix will continue to focus on international expansion, and even though the cost of expansion will hamstring earnings results over the next year, leadership believes strongly in the opportunity abroad. Although Amazon acquired LoveFilm (the U.K.’s answer to Netflix) last year, the leaders believe that LoveFilm’s business is still predominantly DVD-based. Profitability, Hastings said, is naturally based on competitive barriers and scale.

While they think that LoveFilm and others obviously pose a few competitive barriers, they’re mostly low, so the opportunity to sieze the streaming market internationally is potentially huge, and likely extremely profitable. Basically, Hastings words imply that Netflix doesn’t really see any sizable competition abroad in terms of on-demand video streaming at scale, so they’re investing aggressively to be “early in the game.”

Hastings and Chief Financial Officer David Wells made a few other interesting points during the investor call today. One being that, although they now believe that splitting the business was a mistake, they continue to stand by their 60 percent price increase last July, which was really the primary driver behind the exodus of subscribers Netflix experienced for the remainder of the year. Since then, Netflix’s stock dove from around $300 a share to under $70. Yikes.

However, Wells said that if he had it to do all over, he’d make the same decision again. I get it … the whole staying on message thing, hindsight is 20/20, etc. etc., but Netflix is still dangerously close to losing customers if their content doesn’t improve significantly. It’s difficult to compete with the cable networks for exclusivity rights, but their streaming selection still pales in comparison to DVDs.

Another point of interest includes the fact that, while smart TV streaming is the fastest growing segment of its business and 3-D streaming will be a big future play, Netflix has no plans to go into video game rental, which was to be a new feature of Qwikster. Some might think that, with the scale of its distribution, Netflix could easily enter the video game rental market and quickly begin undercutting the competition. But not so, according to the executives. Redbox and Gamefly will obviously quite relieved to hear this news. (At least for now.)

A second inquiry on today’s call asked Hastings and Wells why they weren’t considering a la carte options (i.e. pay-per-view), insinuating that it might help them become a one-stop-shop for movies and TV shows. This is an interesting subject, considering an example many of us have probably experienced. If you don’t have Tivo and you happen to miss an episode of a TV series you love to watch, and you want to watch for free, oft-times you’re out of luck, with Hulu and some of the big cable networks as exceptions. Hastings and Wells seemed to imply that networks are only going to increasingly offer their shows right after they air on their own websites (something which is growing in popularity, check out Fox, for example).

If Netflix were to offer pay-per-view episodes of Mad Men right after they air, isn’t this something that customers would love? Probably, but Hulu has already won a lot of these rights (most of which are exclusive in video streaming). And Hastings said that he thinks that there isn’t a lot of brand strength in “being everything for everyone,” and being unlimited streaming video for a low fee is the core of their brand proposition — adding pay-per-view would confuse both the brand identity and its customers.

With Vudu, Amazon, Blockbuster, and more already in the game there is a huge list of companies already offering pay-per-view, he said, and “we don’t think we have a way to do it any better.”

“In some sense it’s niche,” the CEO said, “but it’s a very big niche, which we think we can lead.” Dolby Digital came to mind, he said, as an example of what Netflix wants to do — be on every platform, and get along with everyone. Clearly, this was another way of saying that, at this point, pay-per-view would put strain on its relationships, and the potential customer acquisition that it could catalyze isn’t worth the cost.

Listen to the webcast here.

Saying 2011 was a rocky road for Netflix would be an understatement, as it split its DVD and streaming offerings into two businesses, then reneged. They also hiked their prices, only to experience a veritable customer revolt, and CEO Reed Hastings was forced to publicly say that they’d made a huge mistake.

Today, Netflix has released its fourth quarter earnings from 2011, and it looks like there’s at least a sliver of good news, as the company beat Wall Street’s forecasts of $0.54 a share and $857 million in revenues, rising instead to $0.73 per share and $876 million in revenues (a 47 percent increase from the year prior).

In its letter to shareholders this afternoon, Netflix said that it saw a rise in streaming members in the U.S., up 220,000 to 21.67 million in the fourth quarter. In October and November, growth was slow, but December was kinder to Netflix, as the company said that it “returned to positive net streaming additions,” boosted by strong seasonal growth additions and exceeded its own forecasts. More importantly, based on its exodus last year, Netflix saw fewer streaming cancellations, as well as a lower rate of migration to DVD-only plans.

All in all, domestic streaming reached nearly 22 million subscriptions, adding a total of 610K, while domestic DVD subscriptions came in at 11.7 million, with international subscriptions at 1.86 million. In relation to the latter, Netflix has warned that it will lose money throughout 2012 as it ramps up its international content, and as DVD subscriptions continue to underperform: “We expect modest quarterly losses, as well as losses for the calendar year,” the company said in its shareholder letter. Due to international expansion, particularly in its launch in the UK, Netflix expects a consolidated loss of between $9 and $27 million in the first quarter.

The company sustained a sharp decline in DVD members in the fourth quarter and thus expects DVD revenues in the first quarter to decline at approximately the same rate, while streaming revenues will increase, with an expected flat sequential revenue in the first quarter.

In total, Netflix ended 2011 with 24.4 million subscribers in the U.S., which was up 25 percent from 2010, and rose from 23.79 total domestic subscriptions in the third quarter. All things considered, this is a good sign for Netflix, especially as it attempts to recover from the whopping 800K subscribers it lost in the third quarter. Although 2012 will continue to be shaky, it seems that the company has at least regained some trust, and is seeing stronger growth.

As to how shareholders are taking the news? Today, Netflix’s stock rose by $3 per share, up 2.37 percent, and in after hours trading, the stock is up 13 percent to $108 a share — another good sign, as shareholders seem at least somewhat contented by the company’s outlook going forward.

The earnings report comes on the heels of some management changes for Netflix, as the company announced last week that its Leslie Kilgore, its CMO for the last 12 years, would be joining the Netflix board as a nonexecutive director. Jessie Becker was appointed interim CMO, and Jonathan Friedland would be promoted to Chief Communications Officer.

Another thing that Netflix may have to contend with in the near future: Amazon. The New York Post published an article today saying that Jeff Bezos and company are seriously considering a move to expand the company’s streaming service, potentially even carving it out as a standalone, subscription-based operation.

In January of last year, Amazon acquired LoveFilm, a U.K. version of Netflix, and some expected at the time that Amazon would eventually rebrand the service, taking advantage of its strong European presence in the video streaming and rental markets. There’s no doubt that Amazon is positioning itself as a major competitor to Netflix, and with its growing clout as a media company, backed by the addition of its new Kindles, Netflix has reason to be nervous.

It’s strong push into international markets could be very important to Netflix in the long term, even if that means lower forecasts and declining profits over the next few quarters. Today, however, shareholders are a bit happier, and Netflix may just be proving that its regaining its footing.

Updating in realtime. We’ll also be listening in on Netflix’s earnings call at 3pm PT/6pm ET.

Netflix has made its debut in the UK and Ireland in early 2012, just like they promised, having worked out video content licensing deals with the likes of BBC Worldwide and MGM.

Users in the UK and Ireland can now subscribe to Netflix to watch available content on their connected TVs, computers, tablets, game consoles and mobile devices. In the UK, Netflix will be bumping heads with Amazon-owned LOVEFiLM, the well-established movie and TV series streaming service. Read more at TechCrunch Europe.

Update: Tickets are now sold out. Be sure to keep your eye out for ticket giveaways and for when we release our next batch of tickets.

The nominations have been tabulated and the votes are in. Over 300,000 nominations were calculated across 20 categories. Along with our partners GigaOm and VentureBeat, we are very proud to announce the finalists for 2011′s best in technology. Voting begins now.

For 2011, we’ve added some new categories. Best Location App, Best Cloud Services and Biggest Social Impact join the Crunchies ranks this year. You’ll also find Best Social App, the NYC-dominated category of Best Shopping App, Best New Startup and the year’s best VC’s and Angel Investors. Newcomers like TaskRabbit’s Leah Busque and Keith Rabois for his angel investments (Airbnb, LinkedIn, Yammer, Path, YouTube) made the list of finalists, as well as industry favorites such as Marc Andreessen, Jack Dorsey, Mark Pincus and Ron Conway.

There are some pretty good match-ups this year. Google+ is up against Facebook Timeline for Best Social App, along with the New New Twitter, Instagram, and Path 2.0). The Kindle Fire is competing with the iPad 2 for Best New Device. And Pinterest, Turntable.fm, Nest, Fab, and Codecademy are all vying for Best New Startup (even though two of those were complete pivots). LinkedIn founder Reid Hoffman is up for Angel of the Year. His seed investment in Zynga is worth 160 times what he paid for it. But AngelList founders Naval Ravikant and Babak Nivi are also finalists in the category for helping to democratize angel investing, along with Conway, Rabois, Y Combinator’s Paul Graham, and Kevin Rose (who has a killer portfolio that includes Twitter, Foursquare, Zynga, and Square). Who will win?

Everyone is eligible and encouraged to vote. The rules state that you may vote once per day, per award category, until voting closes on Sunday, January 29, 2012 at 11:59pm PST. There are 20 award categories open for voting, recognizing the top accomplishments across a variety of fields and roles. If you are one of the finalists, create a badge and get your community excited about this honor and get them to vote for you. Winners will be announced on January 31, live at the Crunchies.

In addition to today’s announcement of the Finalists, we are happy to release our next batch of tickets through Eventbrite. The release begins now, so act fast and get them while you can.

Here are your Finalists:

Best Technology Achievement (2010 winner: Google Self Driving Cars)
Lytro (Related posts)
NFC (Related posts)
OnLive (Related posts)
Siri (Related posts)
Tesla Flat Pack Battery (Related posts)

Best Social Application (2010 winner: DailyBooth)
Facebook Timeline (Related posts)
Instagram (Related posts)
Google+ (Related posts)
The New New Twitter (Related posts)
Path 2.0 (Related posts)

Best Shopping Application (2010 winner: Groupon)
Birchbox (Related posts)
Fab (Related posts)
Gilt Groupe (Related posts)
Lot18 (Related posts)
Warby Parker (Related posts)

Best Mobile Application (2010 winner: Google Mobile Maps for Android)
Evernote (Related posts)
Flipboard (Related posts)
Pandora (Related posts)
Spotify (Related posts)
Square (Related posts)
TaskRabbit (Related posts)

Best Location Application (New category for 2011)
Airbnb (Related posts)
Foursquare (Related posts)
Grindr (Related posts)
RunKeeper (Related posts)
Uber (Related posts)

Best Tablet Application (2010 winner: Flipboard)
djay (Related posts)
Eventbrite At the Door (Related posts)
Fotopedia (Related posts)
GarageBand (Related posts)
Netflix (Related posts)
StumbleUpon (Related posts)

Best Design (2010 winner: gogobot)
Gojee (Related posts)
Orchestra (Related posts)
Path 2.0 (Related posts)
Pinterest (Related posts)
Quora (Related posts)

Best Bootstrapped Startup (2010 winner: addmired)
Github (Related posts)
Imgur (Related posts)
Instapaper (Related posts)
Onesheet (Related posts)
Tap Tap Tap (Camera+) (Related posts)

Best Cloud Service (New category for 2011)
Asana (Related posts)
Box (Related posts)
CloudFlare (Related posts)
Dropbox (Related posts)
Okta (Related posts)
Twilio (Related posts)

Best International Startup (2010 winner: Viki)
Badoo (Related posts)
Klarna (Related posts)
Peixe Urbano (Related posts)
Rovio (Related posts)
SoundCloud (Related posts)
Wonga (Related posts)

Best Clean Tech Startup (2010 winner: SolarCity)
Alta Energy (Related posts)
Array Power (Related posts)
EcoATM (Related posts)
EcoMotors (Related posts)
Hara (Related posts)

Best New Device (2010 winner: iPad)
Galaxy Nexus (Related posts)
iPad 2 (Related posts)
iPhone 4S (Related posts)
Kindle Fire (Related posts)
Nest (Related posts)

Best Time Sink (2010 winner: Cityville)
Modern Warfare 3 (Related posts)
Quora (Related posts)
Skyrim (Related posts)
Turntable.fm (Related posts)
Words With Friends (Related posts)

Biggest Social Impact (New category for 2011)
Charity: Water (Related posts)
Khan Academy (Related posts)
Kickstarter (Related posts)
Practice Fusion (Related posts)
Twitter (Related posts)

Angel of the Year (2010 winner: Paul Graham)
Ron Conway (Related posts)
Paul Graham (Related posts)
Reid Hoffman (Related posts)
Keith Rabois (Related posts)
Naval Ravikant and Babak Nivi (AngelList) (Related posts for Naval) (Related posts for Babak)
Kevin Rose (Related posts)

VC of the Year (2010 winner: Yuri Milner)
Marc Andreessen & Ben Horowitz (Related posts for Marc) (Related posts for Ben)
Matt Cohler (Related posts)
Vinod Khosla (Related posts)
Aileen Lee (Related posts)
Yuri Milner (Related posts)
David Sze (Related posts)

Founder of the Year (2010 winner: Mark Pincus)
Leah Busque (Task Rabbit) (Related posts)
Brian Chesky (Airbnb) (Related posts)
Jack Dorsey (Square, Twitter) (Related posts)
Susan Feldman & Ali Pincus (One Kings Lane) (Related posts for Susan) (Related posts for Ali)
Drew Houston (Dropbox) (Related posts)

CEO of the Year (2010 winner: Andrew Mason)
Dick Costolo (Twitter) (Related posts)
Daniel Ek (Spotify) (Related posts)
Phil Libin (Evernote) (Related posts)
Mark Pincus (Zynga) (Related posts)
Jeff Weiner (LinkedIn) (Related posts)

Best New Startup of 2011 (2010 winner: Quora)
Codecademy (Related posts)
Fab (Related posts)
Nest (Related posts)
Pinterest (Related posts)
Turntable.fm (Related posts)

Best Overall Startup of 2011 (2010 winner: Twitter)
Dropbox (Related posts)
Instagram (Related posts)
Gilt Groupe (Related posts)
Spotify (Related posts)
Square (Related posts)
Tumblr (Related posts)

5th Annual Crunchies Awards
Tuesday, January 31, 2012

Louise M. Davies Symphony Hall
201 Van Ness Ave.
San Francisco, CA

7:30pm – midnight – Awards Ceremony and After Party
A night of celebration with festive attire.

Our sponsors help make the Crunchies happen, if you are interested in learning more about sponsorship opportunities during the ceremony or after-party, please contact Jeanne Logozzo at jeanne@techcrunch.com.

For press credentials, please fill out this request form and confirmations will be sent separately via email.

Netflix is launching a new original series next month called Lilyhammer, which will kick off the company’s foray into original programming for 2012. The series will star The Sopranos actor and E Street Band guitarist Steven Van Zandt in a “fish out of water” story that takes place in Norway.

The story follows New York mobster Frank “The Fixer” Tagliano as he enters the federal witness protection program. He moves to Lillehammer – the Norwegian town that hosted the 1994 Winter Olympics. He calls it “Lilyhammer,” however, which is how the show gets its name.

The series will include eight episodes in its first season, beginning February 6th in the U.S., Canada and Latin America. All episodes will be available for streaming on connected TVs, tablets, game consoles, computers and mobile phones – but not on DVDs by mail.

We reported in March 2011 that Netflix would be soon bankrolling original content. The company successfully outbid HBO and AMC for the rights to House Of Cards, an adaptation of the successful 1990 British miniseries. The show stars Academy Award winning actor Kevin Spacey, and is being produced David Fincher (Fight Club, The Social Network). Netflix confirmed that show will arrive in the U.S. and Canada by “late 2012.”

In November, the company announced it would resurrect critics’ and fan fave Arrested Development, with episodes starting in 2013.

Netflix had previously said that Lilyhammer would arrive in early 2012 and that at least two seasons have been planned.

You can check out the trailer for the series here on YouTube.

After a disastrous Q3 2011, Netflix stands to replace some of the 800,000 subscribers it lost. It’s savior? The Facebook news feed. Earlier this month, the House of Representatives passed a revised bill to change the Video Privacy Protection Act of 1988 to allow people to opt in to having their movie rental activity shared. This Act had delayed the Netflix Facebook app‘s launch in the US. Now the Facebook news feed is beginning to show “Josh Constine watched The Walking Dead on Netflix” stories that point back to the Netflix site. After being enticed by something a friend has watched, Facebook users might sign up and pay on Netflix.com so they can watch too.

So far we’ve only spotted these stories coming from Facebook employee profiles. Above you can see how they look (ignore the Netflix logo I added). They would appear in the Ticker, news feed, and Timeline. They may just be tests in preparation for the official US launch of the Netflix Facebook Open Graph app. Regarding the roll out of the news feed stories, Facebook declined to comment and we’re awaiting a response from Netflix.

The Facebook Open Graph platform launched at f8 in September has helped Spotify gain millions of daily active Facebook users. This contributed to the 1.5 million new paying subscribers it pulled in this year. That kind of growth could help Netflix bounce back from a price hike that scared off subscribers, an embarrassing scrapped move to spin out its DVD rental business, and its plummeting stock price.

Despite these issues, twice as much time is spent watching videos on Netflix than on its competitor Hulu. The TV studio-backed Hulu launched its own Facebook app in July, and then pushed an Open Graph version at f8 which offers several ways to share videos with friends. Netflix could grow its lead over Hulu through the US release of its Facebook app and the viral distribution it would receive through the news feed.

Netflix won’t be the only company capitalizing on Facebook’s Open Graph platform, which can automatically share a user’s in-app activity with their friends. Facebook yesterday announced that non-partnered third-party developers would begin to have their Open Graph apps approved in January. That means in addition to seeing what friends “read”, “watched” or “listened to”, any developer will be able to gain news feed, Ticker, and Timeline exposure for their apps.

Until then, Ticker and Timeline are a bit sparse, providing added visibility of apps like Spotify and The Washington Post reader. Netflix should be hoping to get its app legal for US launch before Facebook gets more crowded.

Update 12/29/2011 10pm PST: A Netflix spokesperson confirmed that “currently only Netflix employees and non-US members can connect their Netflix and Facebook accounts. Unfortunately US members can not currently connect their Netflix accounts to Facebook because of the ambiguous Video Privacy Protection Act. We hope this will change soon.”

Starting in early 2012, when Netflix is set to make its debut in the UK and Ireland, registered members will be able to instantly stream available content on their television sets, tablets, game consoles, computers and mobile phones.

In the beginning of November, the video streaming giant signed up MGM as its first content provider for the regions, and this morning Netflix announced a new digital licensing agreement that will add a host of BBC series.

Content from BBC Worldwide, the commercial arm of the BBC, was already available on Netflix in North and Latin America.

Financial terms of the UK and Ireland deal were not disclosed, and it’s still unclear how much Netflix plans to charge for the service in the UK and Ireland (but probably somewhere near the pricing of its biggest competitor in the regions, Amazon/LOVEFiLM).

Previous series of BBC shows such as “Torchwood” and “Spooks” will be available at launch, as will additional popular titles like “Little Britain”, “Fawlty Towers” and “Miss Marple”.

Android tablet owners have been rocking the new Netflix app design for nearly a month now, and with today’s update, iPad users can finally join in on the fun.

The 2.0 update squeezes more movies onto a single page by trimming out most of the excess white space that made the original version feel a tad ill-suited for such a large screen. It’s a huge improvement over the original if only because you don’t have to squint to see a movie’s image anymore — they’ve blown up the images and folded most of the text and ratings info into a movie or show’s individual entry.

The new update isn’t all about revamped visuals: it also packs a few stability fixes, and it marks the first time Netflix for iOS has been made available in Latin America. ¡Fantástico!

Itching to see the new app in action? That’s where things may get a little dicey. The update is live in the App Store, but it may take a few tries to get things going — it took a handful of reinstalls and restarts before the new UI finally kicked in for me. At least one other reviewer mentioned the same problem, but hopefully not too many of you are running into issues (and if you are, I’m sure you’ll let us know).

Surprise! The big Xbox 360 update started hitting consoles late last night and brought along with it a new Netflix app. This overhauled user experience incorporates the new Kinect voice and gesture controls with a swanky new UI. It nearly turns the Xbox 360′s Netflix app into a movie selection device worthy of a starring roll alongside Tom Cruise in a modern sci-fi adventure that rhymes with Sinority Beport.

The redesign puts a lot more content in front of the viewer. The Recently Watched tabs, Instant Queue, and recommended lists now display three times more titles. Plus, when a video ends, a screen will appear display three related titles (think YouTube). Most of the user elements including related titles, rating, subtitles, and audio settings now occupy similar buttons at the bottom of the screen, eliminating menu overload.

The app also gets in on the new Kinect actions. Users can control nearly the entire app with just voice controls and motion gestures. Of course a Kinect is required.

The updated Netflix app is ready to rock and roll, but users need to initiate the download after applying the latest system update.

Several users took to YouTube after stumbling upon the app last night. Below is the best video demonstrating the new features I could find. Now that Netflix made the new experience official, I’m sure more will pop up.

Cable TV and internet giant Verizon is planning a streaming media service similar to Netflix, according to a Reuters report. The service is in the planning stages and people close to the matter, but apparently not that close, described it to Reuters variously as limited in scope, focused on movies, and focused on children’s programming. While it can’t be all three, it probably will feature on-demand movies and premium show streams, presumably delivered with that signature Verizon style.

Details are in fact few, except that Verizon is talking with content producers at the moment and is possibly going to jump on the Epix library of movies currently licensed to Netflix but soon to be available to others. And it would be offered in places that are not served by their FiOS service. Beyond that, it’s more or less all speculation.

The natural question is, of course, what exactly can Verizon offer that could possibly tempt users away from Netflix or other streaming options? I don’t want to condemn a service that hasn’t even been born yet, but Verizon isn’t exactly a popular consumer brand, at least for this kind of thing. Want signal in remote areas? Everyone will tell you “Verizon.” Want to stream a movie? Not many would make that connection.

There’s also the consideration that Reed Hastings calls to attention: the fact that both Netflix and their most feared competitor, HBO Go, spend over a billion every year on content. And as he points out, HBO is licensing more and Netflix is producing more. They’re becoming vertically integrated content delivery companies. Verizon is a series of pipes — efficient pipes, to be sure, but they’re in an awkward position from which to start. The last thing most consumers remember from them content-wise is the abysmal VCast.

If anything it will probably resemble Comcast’s on-demand Xfinity service, which works fine but isn’t winning any beauty contests (or content contests). It has some content that you can access through it, and you can access that content. Nothing wrong with that. But I doubt anyone would say it has Netflix in its sights. And to be honest, I don’t think Verizon has Netflix in its sights either, as Reuters characterizes the service: they just can’t afford to be left behind and honestly want to test the water.

The plan is currently to roll out in 2012, but that is as specific as the sources could get, apparently. By that time, it must be noted, there will likely be some serious changes in the streaming TV world, and Netflix might have even gotten its groove back. More options is always better, but let’s hope Verizon’s effort is more than half baked.

A funny thing happened on Techmeme yesterday. Though it may seem a subtle or even nonexistent shift, the stories I found most interesting took a turn away from the tech and toward the media. Gone were anything but the last vestiges of the Steve Jobs changed/tweaked the world argument, and along with it the Google + tracking poll. Instead, the media services are on the rise or fall, most notably Spotify, Netflix, Starz, and in general the unravelling/lash back of big cable/carrier cartel.

The Starz news is most fascinating, with the movie aggregator moving from supporting Netflix to what may be a direct competitive strategy. By pulling back from a deal with Netflix, the company triggered the rationale for Netflix to compete more directly with HBO and Showtime by investing in series development. That in turn pushed Netflix toward focusing on the streaming side of its business and fire its DVD customers.

Similarly, Spotify is beginning to get pushback from what’s left of the CD record business. Small record labels are apparently pulling their artists out on the theory that they’re leaving money on the table from record sales going to all you can stream subscribers. In both cases, the market has reacted by punishing the logic of these transformation drivers. The easy money is on the status quo reaping its payback as we reconfigure back to the Bad Old Days where nothing is available and we’re being “protected” from intellectual property theft.

Actually this is not what is happening. Instead, we’ve gotten a taste of how it might work and there’s no putting the genie back in the bottle. If we focus less on each individual player, and more on the Interplay between them, a different picture emerges. Starz is a case in point. Buried in its strategy of maintaining relationships with Comcast similar to the one abandoned with Netflix is the audacious plan to start offering some of its studio offerings a la carte in tablet form. Why would Comcast let the little player slice and dice its bundling strategy with network and early window film releases?

Because Starz is also going into competition with Netflix by partnering with the streaming service’s competitors, especially Amazon and their incredible Fire hardware. By establishing themselves as a hybrid between streaming and cable aggregation, they have potentially just enough juice together with the second-line streamers to entice the studios to give them access to iPad and Fire rights in return for cutting Netflix down to size. Once that happens, Netflix could extract the same rights to keep the new competitors at bay. Or even more disruptive, join the coalition.

On the Spotify side of the business, the threat of flight from the service is counter-balanced by the ability to buy most music to fill in the gaps from Apple and Amazon or even on CD from Amazon or Walmart. Already we’re getting used to the idea that we get streaming from Column A and Beatles from Column B and special promotions from all of the competitors that fall on either side. One of the players is offering exclusive Rolling Stones live recordings unavailable elsewhere, for example. The genie is out of the bottle and the record cartel is getting a taste of how digital can work for them.

Another fascinating development from either the Times or the Journal — I can’t remember either when or which publication because the iPad has shifted my consumption to store and catch up mode. Shows with large social tweet numbers don’t translate to the shows that prove popular with mainstream audiences. Attempts to differentiate through the use of social signals may be lost in the widespread use of social this year.

What happens when push notification becomes a trusted alert platform and Starz-like services give us the ability to mine social networks and directly link tweets or reviews to auto-downloading those programs to our tablets. Each small chink in the big network model translates to more and more user control by turning preferences into transactions, all completely outside the ratings game. Just as my Times/Journal consumption is moving to on-demand, so is the rest of the media.

My choices begin to be managed by the immediacy with which I want the programming. Like a late-booked flight, I’ll pay more for how it fits into my ability to predict and consume the service. At some point, the economics shift from supporting the incumbents to supporting the new incumbents. The more I’m able to assemble a socially-aware version of Comcast that leverages the cloud of influentials I track, the less I pay in to the aggregated mainstream services that are relatively opaque to useful social signals.

It’s possible new media will steal a page from the VCs and the economics of the Cloud, putting these streaming deals together on multiple networks (Facebook, YouTube, Ustream, iCloud) with talent owning the rights in return for low startup costs. Spotify could fight off the independents by offering contracts directly to the artists, and team with the streaming studios to live cast sessions and concerts over the federated network. Soundtrack compilations for stream network-owned series like House of Cards may be where music and gaming crossover first occurs.

And just if by magical thinking, Techmeme tells me Netflix is bringing back Arrested Development, the popular comedy produced and voiced-over by Ron Howard and cancelled by Fox in 2004. What’s even more interesting is that the resurrection is exclusive to Netflix, a streaming version of what HBO pioneered with Sopranos et al. Premium original content bundled on what may well be the first example of streaming achieving a credible cable cutter foothold. With Twitter pushing breaking news and the studios beginning to go direct to Netflix and Amazon, can a return to the West Wing be far behind?

Remember when Netflix piled blunder upon blunder and lost something like a million subscribers? And the bottom dropped out? And the CEO was forced to admit he’d made a huge mistake?

Yeah, none of that matters now. Because they’re bringing back Arrested Development. Glad to see they’re taking our advice.

We had heard that the show would be coming back in film form, and that there would possibly be a pre-film limited series, but this confirmation means a lot. And coming from Netflix, it’s like flowers and a box of chocolates from someone who you put in the doghouse. Will we take them back? Well damn it, we’re going to have to!

Production will be starting soon, and episodes will begin showing in 2013. We haven’t heard much about Netflix’s other big-ticket exclusive series, House of Cards, but it could be that Netflix is planning a content blitz with full seasons of both these shows and whatever else they’ve secretly licensed.

The show will be produced by Fox and presumably the original cast and writers will be reunited. More information at Netflix’s press release.

Netflix took to its blog this morning to announce a new look for its Android tablet app. Gone is the old beige and red scheme (finally). In its place is an immersive user interface that takes full advantage of cover art. It’s swanky and a tad reminiscent of the latest set-top box version.

Per the release the new app is launching today to coincide with the Kindle Fire and Nook launch. Since those two tablets are all about content consumption, it’s a tad hard to argue against that logic. Despite Amazon’s best efforts, Netflix is still the de facto movie and streaming source.

Neil Hunt, chief product at Netflix,

We’re happy to debut a new user experience coinciding with the release of the next generation of devices from industry leaders. The new Netflix interface offers a significant improvement in browsing and searching for TV shows and movies to instantly watch.

The Android version hits the Market today and is available as a free download — of course you need to pay $7.99 a month for access, though. Netflix is also updating the iOS version to the new UI and that app will be available in a few weeks.

Maybe the Kindle Fire isn’t as “media-deficient” a tablet as BN CEO William Lynch would have us believe. Amazon has just announced that they too will have support for Netflix and Pandora, as well as “several thousand more apps” when the Kindle Fire ships next week.

Usual suspects like Facebook and Twitter will run fine on Amazon’s tablet, as will games from big players like Zynga and EA. Amazon’s smaller Android Appstore runs parallel to Google’s, but Amazon claims that the apps they “carry” are tested for Kindle Fire compatibility.

Amazon’s focus on apps is probably meant to highlight the small size of BN’s own app store, but there’s no question that Amazon is feeling some pressure from their long-time rivals. The Nook Tablet came out swinging just a few days ago, and it received more than a little attention thanks to the full suite of media services that would come preloaded on the device. Meanwhile, CEO Lynch lobbed another mortar at Amazon when he referred to the Kindle Fire as a “vending machine” for Amazon’s services.

With Lynch’s claim, BN seems to have forced Amazon into a war of positioning. Amazon clearly has more meat when it comes to their media ecosystem, but BN smartly spun Amazon’s focus on their own services as a lack of choice for consumers. With both tablets nearing launch, watching the two of them slug it out for holiday supremacy should make for quite a show.

Netflix and Metro-Goldwyn-Mayer Studios (MGM) this morning announced a multi-year licensing agreement that will make Netflix the exclusive subscription streaming service in the UK and Ireland for most first-run feature films from the movie studio.

Starting in early 2012, when Netflix is set to make its debut in the UK and Ireland, registered members will be able to watch available content instantly on their television sets, tablets, game consoles, computers and mobile phones.

Read more on TechCrunch Europe.

The Gillmor Gang — Robert Scoble, John Taschek, Kevin Marks, and Steve Gillmor — returned to the Social Wars with renewed vigor courtesy of two weeks of material. These issues included the Klout algorithm crisis, more fun with iOS 5 push notifications, the incredible shrinking Google+ numbers, and @scobleizer’s fabulous Verb Wall aka Spotify Motel where data goes into Facebook and never comes out.

Personally, I’m not too worried about Facebook leaving money on the table, or how Netflix suddenly validated a ton of value with their supposed social mistake. Instead I see an ever-expanding set of social services creating new opportunities for sharing realtime hints about what we will find interesting and valuable just in time. Oh, and Twitter just keeps on rocking. Now back to my movie, @Mention Matinee with nobody you have heard of yet.

@stevegillmor, @scobleizer, @jtaschek, @kevinmarks

Mark one up for Amazon…and mark one up for Netflix.

The two companies just announced separate streaming deals with the Walt Disney Co. that will provide subscribers with even more content from Mickey & Co. Under these agreements, both streaming services will see even more Disney/ABC content, expanding their respective libraries with current and past TV programming.

The Netflix deal allows the company continued access to hundreds of episodes. It also adds episodes from Switched at Birth, prior season episodes of Kick Buttowski, and Alias in its entirety. If this deal had failed to be signed, such titles as Lost, Brothers & Sisters, & Grey’s Anatomy would have disappeared from Netflix’s lineup, potentially signing the death notice for the company. The bad press alone might had done it.

The deal inked by Amazon and Disney adds 800 titles to its Prime Instant Video lineup. The content is sourced from ABC Studio, The Disney Channel, ABC Family, and Marvel including Lost, Grey’s Anatomy, Phineas & Ferb and Marvel’s X-Men Evolution. This deal comes just weeks after a major deals with FOX and CBS. The additional content put’s Amazon’s library of instant streaming video at 13,000 TV shows and movies, a fact that Amazon is proudly proclaiming on its front page today.

Financial terms were not released for either deal.

These streaming deals are increasing becoming important as both services attempt to bolster its library. Netflix, in a free fall, needs the deals to hold on to subscribers while Amazon is attempting to kick out a foothold. Amazon’s library is still less than that of Netflix’s, but is on a tear lately, seemingly signing on content providers at a rapid pace. The two company’s are currently in a heated footrace, but this isn’t a sprint.

Netflix third quarter earnings are out, and along with it the quarterly shareholder letter from CEO Reed Hastings and CFO David Wells.  In the letter (embedded below), Netflix talks about the impact of recent pricing changes and its now-retracted strategy to divide the streaming and DVD services into two businesses. The price changes in particular “hurt our hard‐earned reputation, and stalled our domestic growth.”

Netflix expects the impact to lower both revenues and profits in the fourth quarter. And in the first quarter of next year, the company expects to lose money as it invests heavily to launch in the UK and Ireland. It expects to continue to be in the red “for a few quarters.” But it plans to return to profitability after the international launch (it will have to pause other international expansion plans to do so).

Netflix lost 800,000 subscribers last quarter, ending up with 23.8 million (21.5 million streaming subscribers and 13.4 million DVD rental subscribers). It made $62 million in profits (up 63 percent annually) on $822 million in revenues (up 49 percent). Next quarter, Netflix expects the international business to contribute a loss of between $60 million and $70 million due to the cost of launching in the UK and Ireland.

In the letter, Hastings also takes the opportunity to downplay the loss of the Starz partnership, which included access to Sony movies. Starz videos currently makes up about 6 percent of viewing hours on Netflix. With the SOny movies, which were pulled a few months ago, that number would rise to 10 percent. So 90 percent of the time, Netflix viewers were watching non-Starz titles. Still, that is a pretty significant amount of content from just one partner.

Below is an excerpt of the the beginning of the letter, followed by the entire embedded document.

The Internet is transforming video entertainment, stream by stream, consumer by consumer, nation by nation. Our opportunity is to be one of the leaders of this transformation with the best streaming video subscription service on the planet. The last few months, however, have been difficult for shareholders, employees, and most unfortunately, many members of Netflix. While we dramatically improved our $7.99 unlimited streaming service by embracing new platforms, simplifying our user‐interface, and more than doubling domestic spending on streaming content over 2010, we greatly upset many domestic Netflix members with our significant DVD‐related pricing changes, and to a lesser degree, with the proposed‐and‐now‐cancelled rebranding of our DVD service. In doing so, we’ve hurt our hard‐earned reputation, and stalled our domestic growth. But our long‐term streaming opportunity is as compelling as ever and we are moving forward as quickly as we can to repair our reputation and return to growth.

. . .We think that $7.99 for unlimited streaming and $7.99 for unlimited DVD are both very aggressive low prices, relative to competition and to the value of the services, and they are the right place for Netflix to be in the long term. What we misjudged was how quickly to move there. We compounded the problem with our lack of explanation about the rising cost of the expansion of streaming content, and steady DVD costs, so that absent that explanation, many perceived us as greedy. Finally, we announced and then retracted a separate brand for DVD. While this branding incident further dented our reputation, and caused a temporary cancellation surge, compared to our price change, its impact was relatively minor. Our primary issue is many of our long‐term members felt shocked by the pricing changes, and more of them have expressed that by cancelling Netflix than we expected.

Because of this, our revenue and profits in Q4 will be lower than we had anticipated, but we’ll remain profitable on a global basis.  In Q1’12 we’ll be launching in the UK and Ireland, as we had planned. For a few quarters starting in Q1, we expect the costs of our entry into the UK and Ireland will push us to be unprofitable on a global basis; that is, domestic profits will not be large enough to both cover international investments and pay for global G&A and Technology & Development. After launching the UK and Ireland, we will pause on opening new international markets until we return to global profitability. We plan to do that by increasing our global streaming subscriber base faster than we increase our costs.

Streaming movie and TV show platform Netflix reported third quarter earnings today. Revenue came in at 822 million up 49 percent from 2010. Earnings per share for the quarter was $1.16, which is up 66 percent from the same quarter 2010. Analysts expected earnings of $0.96 cents per share.

Net Income was $62 million for the quarter, up 63 percent from 2010. Netflix now has 23.8 million subscribers. Of those subscribers, 21.5 million are using the streaming service and 13.9 million are using the DVD service. Netflix actually lost around 800,000 subscribers from last quarter.

Domestics (U.S.) revenue grew 44 percent to $799 million in the quarter. International revenue came in at $23 million. The company also says that it will aggressively increase its content spending, and will double content spending in 2012.

Netflix warned that revenue and income will be lower than expected in Q4, but says that the company will be profitable on a global basis. Netflix also admitted to its misjudgments in its change in pricing and decision to separate its businesses (which it later retracted).

The company also expects to expand to the UK and Ireland, after launching services in Latin America, Mexico, The Caribbean, and Canada.

The company has had a tumultuous past few months. Netflix announced in July that it would be rebranding its DVD-by-mail service as Qwikster and that it will keep calling its streaming service Netflix. In early October, Netflix backtracked on this decision. The streaming company also hiked its prices in September.

You can listen to the earnings call below starting at 3PM PT: