With NetFlix, Inc. (NASDAQ:NFLX) being the gold standard for in-home DVD rentals these days -- thanks to the vision of Reed Hastings years ago -- are there any upcoming bumps in the road that may lead to potential downfalls in Netflix's business? Things like, say.....DVD-quality downloads? My bet? Not at all, and it's all due to the experience of the movie, concert or special event that makes renting an "experience" more than just "content."Seeking Alpha looks at this situation by looking at Netflix possibly getting into the video downloading arena soon. That may be, since a deal between DVR leader (and verb) TiVo and Netflix sure as heck points to this. But still, I have to ask, beyond the "do-it-yourself" crowd that can figure out how to get the content from the folder on a PC to the HDTV sitting in the living room, will most American families put up with such madness?
Heck no -- and that's why the iPod rules the digital music market, even with its restrictions on content. The entire ecosystem works so well -- from hardware to software to buying content -- that it's been the leader, the HUGE leader, for years now. And, there's no letup in sight.
There's still something about popping in a physical piece of plastic into that DVD player and navigating the menus that makes the experience enjoyable for most. I won't even get into the commentary streams and other goodies that accompany DVDs these days that really do add value to the experience.
DVD-quality downloads, for now, will find a niche audience. But unless the experience really gets to the point of being as easy to use as a DVD rental -- mainly, getting the content to the main TV in a few steps (not 20 steps with progressively-harder technical roadblocks) -- movie downloads are no threat to Netflix's core business, even if Netflix has that service available itself.
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Reader Comments (Page 1 of 1)
10-27-2006 @ 1:25PM
Gary E. Sattler said...
You may want to consider it a niche for now, but as soon as we can rent a video for $1.99 from our PC and have it stream directly to the hi-def flat screen on the wall without wires, this whole internet entertainment world will explode into the next generation!
Based on what I'm seeing, I predict that AOL is preparing for exactly that.
..
U
10-27-2006 @ 4:14PM
Jack said...
People will eventually get tired of receiving scratched and broken dvds. Netflix sends dvds on long journeys across states and they get battered quick. The turnover is slow also since they are sent distances that take more time to deliver.
10-29-2006 @ 1:22PM
amanda said...
I disagree that turnover is slow you send the movie back and get a new movie in less then 48 hours. I find that amazing. You do lack a level of spontanity in that you have to wait but it is still not to bad. I have never recived a damaged disk in the mail. Disks have all played with no problems at all.
10-28-2006 @ 9:39PM
boris said...
netflix is in 1 lousy distribution channel
within the $24 billion US DVD indsutry.
an industry thats peaking. also Netflix
shoves flea market catalog crud disguised
in red gift wrapped enveloped to unsuspecting
consumers. talk about a trojan horse of kaka.
further i cant wait until Red Box takes
a bite out of there subsriber base.
Red Box and robot clones offer new releases
for 99 cents per nite. Consumers would
be wise to downsize there netflix monthly
serive to $6-$10 and lean on cheaper Red Box
and free comcast on demand.
10-29-2006 @ 11:20PM
Nina Savino said...
I have been a Netfix subscriber since it began. I have moved a few times including an across the country move (No Blockbuster where I am at now) and Netflix has unfailing been there to take care of me. I am particularly fond of the ability to find indie, rare or obscure DVD's and no rental late fees. In the several years I have been using Netflix, I have only had an occasional problem with a damaged DVD. The two to three day turnaround time is not a big problem for me. I expect Netflix to be around for a good time yet to come.
10-31-2006 @ 1:59PM
arajay said...
cds are already obsolete and soon dvds, even blu-ray, will be too. in the next 10 years, instead of looking at a tv's screen size/resolution, you will be looking at how big its integrated hard drive is and how much it costs to upgrade it to a full TB.
netflix knows this, and if it has any kind of competence in its management it will start building its infrastructure to support a subscription download service right now.