NFLX – Add GroupFlix to the List of NFLX Competitors

by Robert Martin | October 21, 2013 1:43 pm

netflix nflx stock[1]There’s a new online video service in town — a startup called GroupFlix.  It offers an alternative to  Netflix (NFLX[2]), joining the increasingly long list of NFLX competitors: HBO Go from Time Warner (TWX[3]), Hulu Plus, Amazon Prime from Amazon (AMZN[4]) and the iTunes Store from Apple (AAPL[5]).

Though NFLX  is still the dominant player in the space, other NFLX competitors  are duking it out[6] when it comes to the right pricing and subscription model for online video. Now, most NFLX competitors have more or less the same model — Hulu, HBO Plus, Amazon Prime and even iTunes all offer some form of a subscription model to access entire seasons of shows, though iTunes also has a-la-carte episodes at $2.99 a pop.

GroupFlix offers something in-between.

From Louis Bedigan of Benzinga[7]:

GroupFlix[8] hopes to provide viewers with a superior alternative. Founded by James Norman, the man behind Ubi[9] (a video aggregation site), GroupFlix is an online video service that allows TV lovers to pay for monthly subscriptions for individual shows.

Users start by selecting which shows they are interested in watching. If enough users commit to a subscription, the show will be “unlocked.” Users will then the charged a monthly fee — typically $8 to $10 — to watch shows like The Walking Dead the day after they air.

GroupFlix is still in beta, so only three shows are currently available: The Walking Dead, Magic City and Low Winter Sun. The first two cost $9 per month, while Low Winter Sun goes for $8.

The price is about comparable to a NFLX or Hulu subscription, but with less for your money — however, a big opportunity exists for NFLX competitors to increase viewer access to shows that have a big cult following, but are not commercially successful in traditional TV outlets. Bedigan explains:

GroupFlix was heavily inspired by the cancelation of ABC’s Detroit 1-8-7.

By the time viewers began to get into it, the network had taken it off the air.

“It just didn’t make sense why this show would get canceled,” said Norman. “There’s 500,000 people alone who would pay $5 or $6 a month to watch this show. So why is it going off the air? It simply goes off the air because they do their business on the same model they’ve been doing for years. ‘Nielsen said it wasn’t tracking well, so we’ll just cancel this one and go to the upfronts.’

If this sounds familiar, it’s because NFLX had the same idea with Arrested Development. The show was cancelled, but had a huge fanbase, so NFLX brought it back to life for a fourth season, released in April[10]. It remains to be seen what is the best model for making money from these types of shows will be, and whether NFLX competitors like GroupFlix are on the right track or not.
NFLX reports earnings today after the close, though some analysts are skeptical[11] of its valuations.

As of this writing, Robert Martin did not hold a position in any of the aforementioned securities.

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  2. NFLX:
  3. TWX:
  4. AMZN:
  5. AAPL:
  6. duking it out:
  7. Benzinga:
  8. GroupFlix:
  9. Ubi:
  10. released in April:
  11. analysts are skeptical:

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