This article caught my eye because earlier in the year we had discussed the future of Netflix. Netflix is raising prices on it's DVD subscriptions and now offering a streaming only option.
This is a major step in shifting the organization from a DVD subscription company, to a online based streaming company.
From Netflix' email to current members...
ReplyDelete"Why the changes? Our selection of TV episodes and movies available to stream has grown dramatically, and as a result most members want us to deliver unlimited movies and TV episodes two ways: streaming instantly over the internet plus DVDs by mail."
By raising prices by at least $1/month for the 16M DVD-by-mail members in US and Canada who opt to continue receiving DVDs in the mail, Netflix should be able to generate the revenue needed to actually improve the streaming catalog. Whether they actually do so rather than taking the money to the bank is anybody's guess at this point, but based on their slow track record of adding new/popular/well-reviewed movies, call me a bit skeptical.
Looking in the long-term though, I agree that this is a major step in the online media & entertainment space.
I agree with Scott's skepticism especially after reading this article:
ReplyDeletehttp://www.nytimes.com/2010/11/25/business/25netflix.html?src=me&ref=general
Netflix is continuing to be a huge contender in the home entertainment industry and has become the largest source of streaming web traffic during peak evening hours in North America.
Even though they do not have access to movies just released in theatres or shows that are currently airing, they grant immediate access to past episodes of popular shows.
It's not in distributors' best interest to give Netflix the ability to keep their collection too current. Otherwise, they will have warehouses full of media that will likely not get sold.
To fight this, movie studios are delaying Netflix streaming dates so that they are able to push DVD sales before the content is available for streaming and have reconsidered future negotiations over streaming rights.
Good point with NY Times article, Netflix is trying to transfer over to a streaming primary/DVD secondary business model, but they are subject to holdup by movie studios.
ReplyDeleteThey could change their pricing model to adapt with this, by sustaining the current subscription model for customers willing to wait for not-so new movies, while also incorporating on-demand sales for customers who want to see the latest movies.