IP Democracy: Netflix Unveils Movies-over-the-Web

After a few false starts, mail-order movie rental business Netflix has finally launched an Internet delivery option. The DVD rental giant will give its subscribers at no charge streaming access to around 1,000 movie and TV show titles.

Netflix opted for the streaming mode of delivery to provide “instant gratification” to its customers, who must first download a piece of software, or a client, to be able to view the videos. Subscribers who pay $18 per month will get 18 hours of free PC-based (no Macs yet because the service uses Windows DRM) video access, while customers who spend less will receive more hours, and customers who spend more will receive more hours.

It’s a nifty marketing gimmick for Netflix, which, despite its still-solid success, is hitting a wall in gaining new customers. But it’s not a breakthrough in the web-based movie distribution business. After all, it’s just streamed movies over the Internet.

Moreover, Netflix, which rules the DVD rental business despite stiffening competition from a revived Blockbuster, is entering a very crowded marketplace, with Amazon, Apple, Movielink, CinemaNow and a half dozen other serious competitors all vying to become the lead Internet film distributor. Still, Netflix has jumped out of its DVD-only rut and onto the Internet, sparking hopes that the company won’t become a dinosaur left behind by technologically savvier competitors.

Posted by Cynthia Brumfield on January 16, 2007 7:20 AM to IP Democracy