From The Set Top Box To iTunes To Netflix

Netflix watch instantly Jason Kinkaid has an interesting post on Techcrunch today about the summer TV doldrums and the opportunity this time of year presents for catching up on earlier seasons of shows you like.

I like to watch what my kids do, particularly as it relates to entertainment, as it gives me a clue about where things are going. And my kids are doing exactly what Jason suggests. They are catching up on prior seasons of Friday Night Lights, The Office, and Weeds.

This is not new behavior for them. They've been using the off season to do this for a few years and they used to purchase the older seasons on iTunes and watch them on their laptops.

That would drive me crazy because often one or two or all three kids would purchase the exact same season of shows on their respective computers. I would push them to share their purchased shows and often they would do that, but not always.

So I am happy to report that they've moved on from iTunes and are now watching these older seasons on Netflix Watch Instantly, both via the browser and on Boxee (the photo above is Netflix on Boxee in our family room).

The other interesting development is they are moving away from watching these older seasons on their laptops. They still do that quite a bit, but I've noticed that more and more they are opting to watch on the Mac Minis we've got connected to big screen TVs in our home. When they have friends over, it used to be the set top box was the device they'd watch TV on the most. Now its the Mac Mini.

Last week, some on Wall Street got all crazy about a research report written by a 15 year old intern at Morgan Stanley.  I read the research report as it was sent to me by about a half dozen friends who work on Wall Street and indeed it had some interesting insights in it. But not all 15 year olds are alike. Just as it is dangerous to read too much into what my kids do, it is dangerous to read too much into what a 15 year old in London does. But it is absolutely critical to pay attention to what teens all over the world, particularly the developed world, are doing. And one thing they are doing is changing their media consumption habits quickly.

My kids have moved from the set top box to iTunes to Netflix in less than a couple years and are now watching much of their TV streamed over the Internet. I expect they are not alone. It's a trend worth watching.

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Comments (Archived):

  1. scyphers

    For what it’s worth, my son and I watch almost all of what TV we do watch through either Hulu or Netflix. It takes TiVo to the next step (instead of watch what I have recorded anytime I want to watch it, it’s watch whatever’s in the library when I want to watch it).

  2. daryn

    We don’t have cable. While we do leave local TV on in the morning and evening for passive exposure to news, etc. whenever we are actively seeking content it is straight to the netflix instant queue. The mac mini is key though, we don’t have one at the moment, and that definitely influences what we watch as well. Our DVD player has netflix and pandora builtin, and since they are one button away versus plugging in my laptop, they win, even if I’d prefer hypem or hulu.

  3. Guest

    My kids do exactly the same thing in the summer months – catch up on past seasons of this series or that. And, as you mentioned in another post recently, they are now streaming instead of downloading. I’m really glad about it, it is proof that if you give them an option, they will choose the right way to do it.The points that the teenager in London made struck a chord with me because 1 – My kids won’t use Twitter even though texting is free here if you have unlimited (“it’s pointless”), though they text endlessly 2 – They don’t watch TV – and I agreed with the 15 year old – but that’s because (my opinion) they “watch computer”. In the old days 🙂 when there were 3 TV channels, we had to watch a show at a certain time if we didn’t want to miss it (unless we used a VCR). Worse case scenario now? We watch a recording on our DVR from Fios, but 90% of our media is “watching computer” with our TV or laptop. So Fred it’s interesting, you consider the watching past seasons on Hulu “TV” and I consider “Meet the Press” (one of the few things we usually watch real time) watching TV. I guess because the content was originally produced for TV it is considered that way, vs just being content that will be viewed in one of many ways. Interesting.

    1. fredwilson

      all three of my teens use oldest (daughter) uses it passively to follow fashion icons (and me). she does not middle (daughter) uses it to create a fake twitter under her boyfriend’s son uses it to follow NBA stars, comedians, and me, and he also uses to complain about my wife making him do stuff he doesn’t want to do and to brag when he beats his friends in xbox games.bottom line – teens will use twitter although i agree that most don’t (yet)

      1. Guest

        Entertainment – yes. Absolutely agree. That’s why I think it is great when athletes, personalities, etc use Twitter. Regardless of what the Twitter purists think – it will hopefully bring in the teens. All of my kids actually created accounts (with screen names) and made a few posts and that was the end of it. Point you made in a tweet today about the value being there later vs at the beginning is very true. But once you get more Shaqs (or in my case, my girls would like film directors or producers) they will follow like your oldest does at minimum. Then it’s no longer “pointless”.

  4. Pascal-Emmanuel Gobry

    “But it is absolutely critical to pay attention to what teens all over the world, particularly the developed world, are doing.”Not just the developed world, Fred. The way teens in developing countries use cell phones to send and save money says a lot about where the smartphone ecosystem is going, among other things.

    1. fredwilson

      good point. i was thinking mostly about media consumption when i wrote that. but you are absolutely right. the underdeveloped world might be even more enlightening when it comes to payments and communication.

  5. Leah

    Beyond ‘watching’, there is great insight in exploring the benefits and the attributes that drive the trend.

  6. Vladimir Vukicevic

    Do you think that teenagers are a more important indicator than college-age kids at this point? It seems that consumption trends might be spotted with teenagers but that creation still comes from college-age/21-34 year-old.

    1. fredwilson

      Well college kids are skewed a bit by dorm life, college networks, lack of big screens in their living spaces, etcThe thing about teens is they are operating in the same setting as their parents and yet consuming media differentlyThat’s one reason they are interesting

      1. Vladimir Vukicevic

        Great point, then the environmental factor makes them more valuable and they can be contagious with their habits to their parents. I like it.

      2. ShanaC

        Dorms and college life is a very strange experience. You go to computer labs- and everyone on a separate computer will stream Manchester United games. The dorms will communally have large tvs that everyone has to share- so movies and planned movie nights become popular, as well as planned tv hours. Sharing music between computers using hacked iturns (and unhacked itunes) is extremely common and popular. And the non-dorm college people are sort of a cross-breed…It’s social around social media- and its often very shared and hacked a bit by the advertising market we are in- but it also this moment where we’re trying to adapt to first decisions on our own. Really awkward media moment, because those choices end up mattering. The high school stuff seems so much more ehh in comparison- but that might be the march of time on me.

        1. Vladimir Vukicevic

          I think that computer labs have lost their importance – the laptop is king.I like the sharing concept that you’re bringing up – it’s what catapulted Napster and Facebook to huge popularity is an extremely short period of time.But the connection to back home is still present and shouldn’t be forgotten. Facebook first penetrated the middle-aged market because moms wanted to communicate with (spy on) their kids. This is a powerful reality.

  7. Jason Lynes

    i’ve seen this trend among my mid-30’s friends as well, and i just this week fired my cable company in favor of a mac mini. can’t wait until more shows, especially live sports, are available online. the idea of paying for a set top box full of hundreds of worthless channels and shows now seems about as ridiculous as paying for long-distance calling or per-minute internet.

    1. fredwilson is a premium service on Boxee. But its flawed because you can’t watch your local teams. I expect MLB will fix that at some point. But I don’t know how soon. The other thing Boxee is trying to do is find hardware partners who will build HD broadcast recievers into their boxes. Many live sports events are broadcast over the air for free in HD. There just aren’t many devices out there that pick up the signal that can also run operating systems and media center software

      1. harpos_blues

        Fred,Check with Scientific Atlanta (now owned by Cisco). Worked with them last year on a similar issue (additional internal components for a set-top box) . Scientific Atlanta pretty much has a gadgetry for every purpose. You have to contact them via Cisco, but Cisco first-line service reps are very friendly — though the process can be a little frustrating for a small company. Cisco doesn’t quite have their “small business” game together yet. Cisco is very responsive to feedback though, and super helpful once you get past their application/screening procedure.

        1. fredwilson

          Thanks for the suggestion

          1. harpos_blues

            You’re very welcome.Also check with Texas Instruments, Motorola, and dare I say it — IBM.Again, these companies may not be set up to interface directly with small business so be prepared to “work the phone”. Social networks may be great for establishing a point-of-contact, but getting past the gate-keepers (business development, product management, etc) is major success factor here, and that’s all about the power of persuasion.Ultimately, you’ll want to to talk/correspond with actual engineer(s). Engineers can be quite elusive and/or evasive; I say this coming a family of scientists and engineers (with much love) :). Keep in mind, many engineers can blather on for hours about their current pet project. Gaining access is the difficult part.One other thought: For the last few years conventional wisdom has said that this type of work should be off-shored for a cost-effective solution. Given the aggressive, down-sizing in may mature tech firms, it may be possible to acquire an entire engineering team (perhaps intact), in the domestic US.Good luck, and enjoy your vacation!

  8. Tariq

    One neat thing I shared with my roommates was the ability to stream media from my laptop to my x-box 360 that was connected to the big screen TV we shared. They were all collectively amazed that such a thing was possible.Before they knew about that, we’d usually acquire episodes of TV shows and watch them on our laptops. But the 360 really helped make it a social experience and almost a ritual.

    1. fredwilson

      The xbox is the sleeper in media centers and a big reason why microsoft and apple are the leaders in this area

      1. Tariq

        I actually felt like Apple’s “Apple TV” was a weak offering. To me, I think that as of right now, it’s pretty difficult to get someone to straight up adopt that kind of device since its capabilities are fairly narrow. 360’s ability to not only play games but also work as a media box is a great strength.I always thought that if Apple re-tooled the Apple TV, to do a little more, it would probably be quickly adopted. Maybe partner up with a big cable or satellite provider, so that not only are you getting this AppleTV media streaming device, but you’re getting a well designed UI for going through your cable guide and DVRed programs… but its standalone prospects seem fairly limited. Perhaps that’s why you’re using Mac Minis with your TVs.

  9. Name

    My roommates and I (all 23 yrs. old) gravitate towards hooking up our computers to the the flat screen in our living room. We use Boxee, Hulu and Netflix and rarely watch regular television, which made us decide to just get internet next year. Consumption patterns are changing, but cable TV is trying to become more interactive and incentivize watching television live. Verizon’s Twitter application is the first step in merging old and new media to bring more people to subscribe to Fios.

    1. fredwilson

      I’m getting FIOS in my new place largely for the raw speed. I think internet based services will always be more open that services running in a proprietary network. I love that FIOS did a twitter app. But I bet a twitter app in Boxee, or Hulu, or Netflix will be even better

      1. harpos_blues

        I’m on ATT’s internet-only UVerse (naked vDSL) offering and the speed and reliability are amazing. The product offers 18mbps down /1.5 mbps up. I regularly achieve downstream speeds greater than 16 mbps, and my upstream is consistently 1.4 mbps or better. I highly recommend it for fiber-to-curb, if you live in major metropolitan area.For what it’s worth, I’ve never owned a television set; I grew up in a household during the ’60s & 70s with just one TV, and access was rigidly controlled. I never experienced “must-watch” syndrome. In college, I had room-mate who planned her classes around her favorite TV shows. I found this to be completely alien and off-putting behavior :)There’s a spoken word piece from the late ’50s that sums up my father’s approach to television. It’s a track from Ken Nordine’s 1957 album “Word Jazz” called “The Vidiot”. Unfortunately, its not available as a complete stream online or as a single download. See:…I work in media now, so I watch online stream or by legal download, mostly to assess/compare technical solutions.

    2. ShanaC

      Same here- I see that commonly in college dorms- though with a lot more movies, random tv, and Wii to keep it a social hub (you do not want to know what an in person MST3K experience is like…)

  10. pbreit

    With perfect targeting and a captivated audience, Hulu should be able to command very high advertising rates. For example, I’d easily pay $1 to show an ad for my pet boutique to 100 people in 94109. I’d pay $10 to show it to people watching Animal Planet shows.

    1. fredwilson

      Hulu charges more than that already for untargeted ads. I think the CPMs are north of $20. So that means you are paying $2 to reach 100 people who are untargeted (except by show). I expect geotargeting by show costs a lot more than $2 per 100

      1. pbreit

        OK, then make it $50 CPM for simple geotargeting and $100 CPM for subject targeting. I was just trying to point out that Hulu should be able to make a lot more money by making video advertising more accessible to small business and by offering targeting.

        1. fredwilson

          Yes. You are right

  11. Trendsta

    Fred, I totally agree. Through Trendsta, I work with thousands of teens, getting their opinion on products and activities. I’ve noticed that they create their own media experience by seamlessly moving from service to service to fit their needs for that moment. Just 8 years ago Tuesday was WB night with Buffy and Angel, now the CW struggles to get one million teens together on Monday night to watch Gossip Girl. This generation would rather watch Gossip Girl when it’s convenient for them– DVRing shows to skip commercials or streaming a show the missed when their homework is lightest. They’ll move to whatever online social service works for them in a similar way.

    1. fredwilson

      That describes my kids!

  12. JasonTC2

    Great followup post Fred. I’ve actually been using Netflix’s streaming for the exact same thing (in fact, I use it far more than the mail-in DVD service). There’s definitely a big market for streaming TV — I’m fine buying shows on iTunes, but I probably won’t watch them again in the foreseeable future so it’s sort of a waste. I think the first streaming service to have a broad selection (Netflix is good, but not great) and a decent monthly subscription fee could make a killing here.

    1. fredwilson

      Have you tried netflix, hulu, and other streaming services (like on boxee? Its a great living room experience because you can use a remote instead of a keyboard

  13. charlieok

    I latched on recently to a comment you made about queueing video content you come across on the web and watching it that evening in batch on the tv (or some other convenient time on your phone). I quickly found works great for this purpose (no involvement, just a happy user). The main thing they need to work on is detecting more videos in web pages (I’m sure there are all kinds of weird ways they’re encoded/embedded). They get most of the main ones like youtube, vimeo etc and seem to capture 80% of what I throw at them. Then your feedreader of choice can catch it. In my case that’s iTunes but I’m sure you could suck it in with Boxee, Miro or any of the others.

    1. fredwilson

      Yes. I checked them out, and others. This is a killer feature. If more people knew about these services, I think web video at home in the evenings would take off

  14. Ghorwood

    It’s not only teens that watch this way. Our 8 year old watched her 12 year old sister use Watch Instantly and figured out how to use it herself. It is now a frequent choice in her media mix.

    1. fredwilson


  15. marcelofrontiereconomy

    It shouldn’t take long for the TV/computer monitor divide to disappear. Which is which should be a matter of ergonomics and internal decoration, nothing else.Makes me a bit nostalgic. My first personal computer was a Spectrum (this was before the PC XT), which we had to hook to a TV. The more things change…

    1. ShanaC

      I hope actually this is sooner rather than later with one caveat- I hate having to go back and adjust the screen size inside the computer. Sometimes you don’t want a tv sized screen (in the sense of icons) You want a humongous screen in the sense of working space.

    2. fredwilson

      the more they stay the same