Netflix's New Competition

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.