Following Blockbuster's recent bankruptcy filing, the New York Times published this story about Netflix's changing competition.
More and more subscribers are getting their content through Netflix's streaming services rather than through DVDs delivered via USPS. While the ability to stream content enables Netflix to reach more devices and screens, it reduces the uniqueness of Netflix's service.
There are obviously numerous companies that offer streaming content, including Hulu, Amazon, and YouTube (although their content is of a different variety currently). Production studios are seeking to capture more of the value attached to their content after its initial airing or release, so they are searching for the most lucrative re-broadcast deals.
In the "on demand" era it is difficult to see how a company like Netflix will compete with Hulu, which is a joint venture with many of the original content owners. As the NY Times article notes, the nature of competition is shifting from distribution logistics to which company will pay the most for the rights to content. Perhaps the streaming video world will not be a winner take all market in the same way that DVDs by mail was.
I agree that new content will likely end in a highest bidder takes all contest, but Netflix still holds access to an tremendous library of titles for rental, which means relationships with studios new and old (not to mention those wonderful network effects that studios will pay a lot to tap into for market research). They'll have to play the move from DVD to streaming of those titles impeccably, but I wouldn't count them out just yet.
ReplyDeleteI agree with DPK. I would not rule Netflix out just yet. Their CEO has been visionary, even predicting that their own business model will be obsolete with in 5 year, 3 years ago. With this type of foresight you would expect them to be in the process of bringing the titles currently only on disc into a streaming format. I give the edge to Hulu as far TV content, but still give the edge to NetFilx as far as movies go.
ReplyDeleteWhat about Redbox? This company has had tremendous growth recently.
ReplyDeleteDo you see Redbox as a real competitor to Netflix going forward? Or will they suffer the same fate as Blockbuster as more and more content is available streaming online?