Netflix: Leading the Way in Content Distribution

It is quite possible that Netflix will single-handedly change the way we watch movies. Netflix Inc.'s online movie rental subscription service has garnered over 7.5 million subscribers who can choose from a DVD collection of over ninety thousand titles. As of late, Netflix is expanding much more than their subscriber base. Netflix Inc. is making significant joint-ventures with other companies, as well as developing its technology, in a major attempt to provide its subscribers with the capability to watch movies through different channels and mediums (not to mention the incentive for non-subscribers). As of one year ago, Netflix subscribers were able to rent movies through the mail, or stream a limited collection on only a PC. Earlier this year, Netflix introduced Roku, a box that allows subscribers to stream a similarly limited collection of titles through one’s television. The box is currently being sold for $99.99. While Roku was a major step in expanding its content distribution, the selection is limited, and both subscribers and business analysts alike have been wondering what Netflix’s next moves will be. Well, after a deal with Microsoft this summer, starting this fall, Netflix subscribers will be able to stream movies online through Microsoft’s Xbox 360 video game console. Netflix has also made a partnership with both LG and Samsung to develop and sell boxes similar to Roku, but with the technology that supports both HD and Blu-Ray content. While all of these advancements are quite significant, I believe the two most recent advancements in Netflix’s distribution mediums are also the best to date. This past Friday, Nexflix allowed subscribers to test and begin using their beta program that will allow Mac users to stream content online. Netflix also announced Thursday that it will begin a partnership with TiVo, Inc. to integrate the Netflix catalogue into its already wildly successful DVR boxes. This week, I have decided to sway away from Hollywood finance to comment on two separate articles written by fellow bloggers who have written about Netflix’s partnership with TiVo, and its inclusion of Mac computers into its online streaming capabilities. The first article, “Netflix Streaming Finally on Tivo”, written by Elaine Chow, examines and explains Netflix’s partnership with Tivo. The second article, “Netflix Opens Beta for Mac Movie-Streaming Service”, written by Gregg Keizer, quite obviously takes a look at the new beta that will allow Mac users to also stream the Netflix catalogue. For your convenience, I have posted both my comments and links to the original articles below.

“Netflix Streaming Finally on TiVo” by Elaine Chow
Comment:
Thank you Ms. Chow for your article explaining and examining the recent partnership between Netflix Inc. and TiVo Inc. First of all, it was very nice to immediately read what was most important: the TiVo products that would feature Netflix’s streaming service. Some questions I have is whether or not any of these products will feature Blu-Ray technology, and a possible estimate as to how much you think these products will cost. I particularly appreciated the inclusion of quotes from both companies’ CEOs. This venture solidifies an extremely powerful partnership between two very successful companies and was an incredibly strategic decision by both companies. Hearing what each executive had to say gave me a much better idea as to the vision and attitude of each CEO and their companies. As a Netflix customer, I am extremely excited for this new service, and believe this collaboration is the best alternative for subscribers to view content aside from Netflix’s mailing system. While online streaming to one’s computer is becoming increasingly more popular, I believe the DVR feature of the TiVo boxes will really differentiate this product from any of Netflix’s other partnerships, namely Microsoft, Samsung, and LG. As Reed Hasting, CEO of Netflix, quoted, Netflix fans are “avid movie watchers and this combination gives them immediate access” to the content available through TiVo and Netflix’s vast catalogue. I wonder, do you think this partnership will negatively affect the sales of the products that are being sold by Samsung and LG? I can’t help but think that even with Blu-Ray capabilities, the combination of TiVo’s amazing service and now a Netflix catalogue will surely weaken the sales of both companies. I would have liked to read some commentary on how this partnership will affect Netflix Inc.’s relationship with cable-service providers such as DirecTV or Time Warner, and how it will affect Netflix’s entry into that particular industry. Other than that, I thought this was a very enjoyable and informative article, and I also appreciated the references to other articles. Thank you again for your article.

“Netflix Opens Beta for Mac Movie-Streaming Service” by Gregg Keizer
Comment:
Mr. Keizer, your article explaining Netflix’s technology developments and their relationship with certain companies is very interesting. I believe Netflix Inc.’s ability to provide subscribers who also own Apple computers with their on demand online streaming service is an incredibly significant development in Netflix’s overall strategy to expand its distribution methods for current subscribers. I think we can both agree that streaming online seems to be the next method of viewing content, and I don’t think Netflix would be able to continue to grow and remain profitable without being able to provide all computer owners with that basic service, regardless of whether it is a Mac or PC. This technology seems to be a great incentive for Mac owners who are not yet subscribers of Netflix. As a Mac owner with a Netflix account, I have been waiting patiently for the ability to stream content through my computer, and I can almost guarantee that I will renew my subscription for at least another year due to these constant improvements in Netflix’s service. I would have liked a little bit more explanation as to what Silverlight 2.0 was, and how Mac users could download that program. While I was thoroughly informed, I was still left a little confused as to where one could download the Silverlight program and how it streams Netflix’s content. I think a link might help readers who don’t already have the program. I also would have liked a little more explanation as to why Netflix went with Microsoft’s streaming technology instead of Apple’s. I think that is a very interesting topic, and I’m glad you brought it up in your article. However, you only touch briefly on Apple’s anti piracy software and why they refused to share it with Netflix. Do you think Netflix’s deal with Microsoft will prevent any future partnerships between Netflix and Apple? Overall, I appreciate the article, and think you provided readers, especially Mac owners, with much more excitement about Netflix Inc.’s future strategic decisions.