Baffled at Netflix Fascination

Will someone please explain to me why Netflix’s announcement today is getting so much attention? The company announces its existing customers will be able to watch a short list of movies, for a severely limited number of hours, and it will have zero revenue upside for Netflix. Huh?

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Comments

  1. And what use is a newborn baby?
    At this point, Netflix has to enter the online video market to prove a basic level of seriousness about the future.
    Would you invest in any sort of video delivery service today that didn’t have a download strategy?
    Also, downloaded video versus Hi-Def discs. What recent technological duel does this remind us of? Could it be DVD-A/SACD versus every MP3 player in the world?

  2. uh, because it might compel more people to join?

  3. Andrew — Really? Would 1,000 movies on these terms get you on the service? I know it wouldn’t move me from Time-Warner Digital Cable’s VoD service, which I admittedly use infrequently at best.

  4. Most of the VOD services from cable companies — like the one I subscribe to — have one thing in common: They suck. And so does Netflix’s new “service.” A tiny fraction of the most ancient and pathetically undesirable programming, streaming with DRM and no downloads or pausing. What a joke.

  5. John Regan says:

    Netflix stock has been up and down and up and down in a large part because of speculation that some form of internet movie delivery will kill their business. Netflix has been saying all along that the technology is not mature, the supply of movies is limited and that mainstream users aren’t interested… yet. Still, they don’t want to be viewed as sitting on the sidelines so they are positioning themselves to 1)have a feature they can point to to show they aren’t ignoring the situation and 2)use their current capabilities to get their foot in the door and be experienced and ready when the technology, supply and users do come together and the market is ready to be exploited.
    So, now critics are knocking Netflix’s offering as limited and non-revenue producing which is what Netflix brass has been saying about internet delivery all along. Damned if you do, damned if you don’t…

  6. SFGary says:

    I agree with commenter #5. This is just a dress rehearsal until the movie industry allows them to stream DVD quality movies directly to a STB.

  7. mike says:

    1) ability to preview a new release prior to putting it in your queue will improve user satisfaction with the service (avoiding movies that suck).
    2) test marketing – see comment #5

  8. pwb says:

    Uhmmm…maybe because it’s a bigger list of movies than anywhere else, subscribers get those hours for free and for many, it’s the only reason to join or stick around??

  9. @SFGary – Netflix doesn’t have a STB to stream movies to. I agree that STB is the way to go – movies are most compelling on a bigger screen – but I doubt people are going to buy a STB for it. I bought Moviebeam’s STB (am I the only one?) and have a review of it on my blog.
    There are a number of companies that are in a better position than Netflix to do this: Apple (with Apple TV), Tivo and all the cable companies.
    Apple will likely get a substantial number of people to buy their box, but it’s harder to get people to spend $10-$13 to buy a movie than $2-$5 to rent one. MovieBeam has a lot of issues. Tivo is probably one of the best positioned companies to provide such a service, but so far hasn’t announced any plans.
    Maybe NFLX will team up with Tivo?
    The 1,000-lb gorillas are the cable companies. They’ve got many advantages that are going to be tough to overcome.
    More here:
    http://redesign.wordpress.com/2007/01/16/netflix-begins-testing-video-streaming/