In a bold move to maintain marketshare in the face of competition on many fronts, Netflix today announced that it will be allowing subscribers to watch certain movies online.
The skinny:
- You get a certain number of hours per month of online viewing time, based on the price plan you’re on
- The service is free to all Netflix customers, though they’re rolling it out to 250,000 customers a week so their servers don’t get completely slammed
- About 1,000 movies and TV shows will be available initially, with more to come
- Windows only - no Macs, no downloading, no iPods
CEO Reed Hastings says:
“While mainstream consumer adoption of online movie watching will take a number of years due to content and technology hurdles, the time is right for Netflix to take the first step.
“Over the coming years we’ll expand our selection of films, and we’ll work to get to every Internet-connected screen, from cell phones to PCs to plasma screens. The PC screen is the best Internet-connected screen today, so we are starting there. ” link
Netflix spent $40 million to offer this service - a good chunk of change for a company with $700 million in annual revenue. But this is a good future-proofing move for Netflix. Illegal downloading of movies is a force to be reckoned with (check out what’s available on The Pirate Bay and you’ll see the threat)
MovieLink and its brethren haven’t caught on because no one wants to watch all their movies online, but Blockbuster Online has made headway with their “return to store” policy, which not only gets your next film shipped out faster, but also gives you a free in-store rental (presumably because you’re saving the company a shipping fee).
Netflix cannot match Blockbuster’s neighborhood presence, so online viewing is a good compensatory move. Their regional shipping centers have reduced delivery times, and they appear to have recovered from the throttling debacle.
Some predictions:
- Someone will find a way to record the streaming movies (which is a waste of time, because it’s not that hard to copy a DVD)
- Netflix will never offer an unlimited view-online plan, because people could share them
- People will beg Netflix to be in the next batch of 250,000 to get the streaming service
There’s still much room to grow in this department, though. I’d like a movie service that lets me get DVDs, streaming video, or download-with-DRM. I don’t want to pay per rental, and I don’t want to buy a crappy low-res download from ITMS for $9.99. I’d like to be able to put a movie on my iPod without buying it. If it has DRM and expires, fine, as long as I didn’t pay for it beyond my monthly service fee, which should get me unlimited DVD rentals and downloads, with the same at-a-time limits I have now. That’d be nice.
Good move, Netflix. Now, let’s see if your servers can handle the strain of a million geeks a month streaming movies onto their laptops.
Via the Associated Press: “Coming Soon: Netflix Delivered Online”