Mike McGuireHaving built a decent business based on consumers desire to avoid worrying about when they return their rented DVD movies, NetFlix is pushing into the online world of movie distribution by securing streaming deals with Microsoft’s XBox (including a small catalog of about 300 HD titles) and TiVO’s HD-based DVRs.
NetFlix’ announcements are strong additions to deals announced earlier this year with set-top box vendors such as Roku, and BluRay DVD manufacturers LG and Samsung. With those deals, consumers purchase the boxes on their own and, assuming they’re already subscribers to NetFlix, there’s no additional cost.
NetFlix’ Watch Instantly is the obvious extension to the DVD-rent-by-mail system the company launched. Deals with these hardware manufacturers is crucial to keeping NetFlix from being bypassed by cable VOD and other alternatives such as AppleTV.
What is likely to be NetFlix’ advantage – assuming it can grow it’s streaming and HD catalogs rapidly – is its browser-based interface and its subscription model, giving its installed based of customers a relatively easy path to moving to watching online streams via one of the growing hardware options.
But perhaps I put too much faith in the desire of people to have a fixed monthly fee on their bill versus a more selective pay-per-title offering a la Amazon’s Unbox and Apple’s AppleTV/iTunes offerings.
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