Microsoft: ‘Gold’ Level Xbox Price Hikes Take Effect In November

Microsoft is raising prices of several Xbox Live subscription levels in the U.S., Canada, Mexico, and the UK by as much as 25% beginning November 1.

“Gold” level subscribers in the U.S. will pay $2 more for a one-month subscription ($7.99), $5 more for a three-month subscription ($24.99) and $10 more for a 12-month subscription ($59.99). However, current subscribers have the opportunity to secure a 12-month renewal for $39.99 before the price changes take effect.

“Since launching Xbox Live in 2002 we have continually added more content and entertainment experiences for our members, while keeping the price the same,” said Larry Hryb, Microsoft’s Director of Programming for Xbox Live, in a blog post. “We’re confident that when the new pricing takes effect, an Xbox Live Gold membership will continue to offer the best value in the industry.”

The Gold subscription level offers members network-based multiplayer videogaming, along with access to other entertainment such as streaming movies from Netflix (provided the member has a Netflix subscription) and sports coverage from ESPN 3 (provided the member’s broadband service provider is affiliated with the sports network).

Jesse Divnich, Director of Analyst services for game market research firm EEDAR, said that inflation — along with Microsoft’s offering of additional entertainment services via Xbox Live — justifies the price increase.

“When originally launched in 2002, a Gold subscription cost the same as an AAA video game, $49.99,” Divnich said in a statement. “When taking into account for inflation ($50 in 2002 is roughly $60 in 2010) and the additional services available to Gold subscribers in 2010, such as ESPN, Facebook, Twitter, Netflix, Last.fm and Video Kinect, a $10 price increase still represents an incredible value to consumers.”

Perhaps unsurprisingly, subscribers reacted differently to the announcement. “You don’t even give us enough content to justify $50 let alone $60,” reads the first comment following Hyrb’s price-hike post. “Glad I’m paid up for the next year and a half.”

iPad App Battle Brewing Among Cable Operators: WSJ

Subscription television operators from Comcast and Time Warner Cable to Verizon Communications are looking to compete with the likes of Netflix on the iPad, with plans to release apps of their own, the Wall Street Journal reports. The operators’ various apps will offer subscribers access to select movies and TV shows for little or no additional fee. At least seven of the country’s 10 largest pay-TV operators are in the process of developing tablet computer apps, the Journal says.

Netflix’s Streaming Deal With Epix Preserves Pay-TV Window

Netflix continues to expand its streaming library by embarking on a multi-year licensing arrangement with Epix, the major-studio-backed pay-TV channel. Under the deal, movies will begin streaming from Netflix on Sept. 1, and will include new releases and library titles from Paramount, Lionsgate and MGM.

The deal spans five years, with Epix expecting to receive close to $1 billion in licensing revenue from Netflix, according to the Los Angeles Times.

The Epix deal follows Netflix’s July agreement with Relativity Media for exclusive streaming licenses of the distributor’s films.

Similar to Netflix’s arrangement with Relativity, the Epix deal preserves the premium television window that studios maintain with cable, satellite and telco distribution partners. Epix will make its movies available to Netflix 90 days after their pay-TV and subscription-on-demand premieres.

Warner’s Bewkes: Studio Sees Sales Boost From 28-Day Window

Warner’s agreements with Redbox and Netflix to delay rental availability of new releases for 28 days had a positive effect on sales of titles such as “Sherlock Holmes” and “The Blind Side,” according to Time Warner CEO Jeff Bewkes (via paidContent).

Discussing the company’s second-quarter performance, Bewkes said that Warner’s positive experience with the 28-day window was similar to that of other studios testing the new business model, “while other studios not using that window structure appear to be underperforming.”

paidContent notes that Bewkes did not offer specific figures. That’s in keeping with the general vagueness of the public release-window debate. On the other side, Disney’s Robert Iger asserted in June that his studio saw no cannibalization in sales of its “Alice in Wonderland” from the titles day-and-date availability in Redbox kiosks. But Iger did not offer unit or revenue specifics either.

Revenue at Time Warner’s filmed entertainment division was up 8% year-over-year during the second quarter, to $2.5 billion (via Home Media Magazine).

Blockbuster Pushes DVD Exclusivity In New Consumer Campaign

“Less waiting, more watching” is Blockbuster’s latest ad slogan, as the chain attempts to convey its 28-day advantage over Redbox and Netflix — for some new-release movies, anyway — in a new TV campaign. BTIG Research’s Richard Greenfield applauds the marketing move, calling the spot “the best Blockbuster ad in years.” (It sure beats this one from 2005.) But Greenfield says that with studios such as Disney making movies available to Redbox, Netflix, and Blockbuster simultaneously, “we find it hard to believe the message will really hit home for consumers.”

As paidContent points out, the 28-day wait for some new releases now in effect at Netflix doesn’t seem to have impacted the company’s subscriber growth. BTIG’s Greenfield notes that Netflix’s DVD rental business historically has been catalog-driven.

Six In 10 Netflix Subscribers Use Streaming Service

Among Netflix’s 15 million subscribers, 61% streamed a TV show or movie for more than 15 minutes during the company’s second quarter — up from 37% during the second quarter of 2009, and 55% in the first quarter of this year. AllThingsD digs into Netflix’s plans to license more exclusives for its streaming service, bolstering its offer against competitors such as Hulu.

Streaming is currently a value-add for Netflix subscribers. But as the LA Times reports, the company’s revenue gains in the second quarter were on the low side of analysts’ expectations, and not proportional to the 42% year-over-year subscriber growth. That may mean that subscribers are increasingly opting for the company’s lowest-priced subscription plans, which start at $8.99 per month. Also, while streaming usage surged, Netflix shipped fewer DVDs to customers than it expected during the quarter.

Netflix Crosses Into Canada; Microsoft Bringing Zune Pass Across The Pond?

The leading entertainment subscription services in the U.S. have long had their sights on expansion into international territories. Netflix takes a step in that direction today,  announcing its plans to launch a streaming-only video subscription service in Canada this fall. Other companies may deem the timing to be right for venturing abroad: Microsoft, for example, seems to be developing a UK extension of its Zune Pass streaming music service, according to paidContent.

‘Nip/Tuck,’ Other Warner TV Series Headed To Netflix Streaming Service

Netflix subscribers will be able to watch instantly a slate of catalog TV series such as “Nip/Tuck” and “Veronica Mars,” in an expanded streaming content agreement between the video company and Warner Bros. Home Entertainment Group. Netflix acquires streaming rights to the shows for a period of four years; the agreement also extends the company’s existing license for catalog movies through 2011.

The companies said they were keeping intact their previous deal under which new release titles on DVD and Blu-ray are made available to Netflix subscribers after a 28-day window.

How May USPS Changes Affect DVDs By Mail?

As the U.S. Postal Service calls for a postage rate hike and a five-day delivery schedule, analysts are mulling the implications for Netflix (as well as fellow disc-by-mail services Blockbuster and GameFly).

Janney Capital media and entertainment analyst Tony Wible reportedly reiterated his sell rating on Netflix stock in the wake of the Postal Service announcement, estimating that a rate hike could add between $18 million and $30 million to Netflix’s physical distribution expenses in 2011.

Netflix is nevertheless undaunted by a prospective USPS rate increase; it actually supports it, according to Home Media Magazine. And an end to Saturday delivery, Netflix tells The New York Times, is more palatable than a steeper rate hike.

Netflix Deals For Streaming Rights To Relativity Films

Film production company Relativity Media asserts its options in the emergent age of digital distribution, and Netflix asserts itself as a potential pay-TV contender, in an exclusive deal that will bring Relativity films to Netflix’s streaming audience “just months after their DVD release.”

Netflix chief content officer Ted Sarandos explains the context in the company’s PR: “Historically, the rights to distribute these films are pre-sold to pay TV for as long as nine years after their theatrical release.” The movies-via-pay- TV business is currently dominated by the likes of Starz Entertainment — which Netflix has partnered with to stream first-run films since late 2008.

Among the first wave of films covered by the Netflix-Relativity deal are “The Fighter,” starring Christian Bale, Mark Wahlberg and Amy Adams (distributed by Paramount Pictures), slated for release later this year. Current Relativity releases include “Salt” (distributed by Sony’s Columbia Pictures) and “Get Him to the Greek” (distributed by Universal).

The Wrap made hay of its exclusive on the news yesterday, noting that pay TV deals can net a major studio $100 million a year in revenue. The Netflix-Relativity pact “is believed to be on a par with or better than” major-studio terms, The Wrap reported.

Deadline Hollywood, meanwhile, throws water on the idea of deal being a game changer: “It’s hilarious to think [it] will make HBO or Showtime or Starz or Epix shudder, especially as they continue to move away from showing movies and more towards original programming.”

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