Netflix is considering a streaming-only membership. If Netflix actually launches this it will be directly competing with Hulu. This streaming only option could be a low cost alternative to Netflix’s traditional product offering for not only customers but also Netflix itself because of the cost savings from not having to ship each disc. According to National Public Radio, it costs Netflix $.78 to round trip ship a disc. Also the reduced price of a streaming only option could attract new users and grow Netflix’s existing user base even more.
With Netflix’s extensive library and massive user base will any of its competitors actually be able to compete in the future?
If Netflix launches this, Hulu is definitely in trouble. Even though Hulu is free, there are limitations in their business model, such as only being able to carry a few episodes at a time, etc. I think many consumers (including me) are willing to pay for a streaming-only membership with Netflix for the convenience to watching complete seasons of shows.
ReplyDeleteOne competitive advantage Hulu has is it's current television content. For Netflix to effectively compete against Hulu, it must have a lot more current television content.
ReplyDeleteCurrently, Hulu allows you to view programs which premiered just the week prior (this capability helped because of the Fox-ABC-NBC partnership with Hulu). Other providers (television studios) and distributors (cable companies) have On Demand capabilities which also show recently-aired television programs.
Netflix is cool if you're looking to catch up on last season's House. If you want to watch last week's House? Advantage: Hulu.
I know that as a current Netflix member, I rarely get the actual DVDs from the company any more. I tend to watch most of the content streamed through their website. I wonder if in the future we would see a Netflix/Hulu partnership-- Netflix for movies and Hulu for TV? This only works if Netflix stays away from offering greater levels of television. Interesting development!
ReplyDeleteWith the launch of Hulu Plus (subscription $10) you can now watch full seasons of TV shows. Netflix's ability to survive will depend on converting their rights to print and distribute discs to stream popular movies.
ReplyDeletehttp://www.hulu.com/plus