Today, Netflix announced that they are going to start offering customers the option of instantly watching movies on their PCs. I am calling it a flirt because this cannot be a serious relationship.
The blogosphere went crazy over the news as expected and created a lot of buzz about Netflix. Here is the most recent capture of Techmeme about the news.
I guess the only group of people to be excited about this announcement would be the ones who would like having an alternative method of getting their movies and who do not really care about the limitations of offerings.
The most recent player in the field of delivering online video was Amazon and they did not get very positive reviews about the initiative. The case is similar with Netflix because they are not bringing anything new to the table.
First off all, it is not a download service, it is a streaming service. There is no way to download the content to ones computer for watching later, say during a trip. On top of that, you have to be online to get one of the available 1000 (1% of Netflix’s inventory) movies.
Netflix, reportedly will spend $40 million to be able to offer the “Watch Now” movie download service to their customers. $40 million dollars for a streaming service that will only work on Windows XP and Internet Explorer is, in my opinion, a lot of money. Moreover, I do not see a return for this investment other than potentially increasing subscriber base. I am not sure how many people would subscribe just for this service.
Hacking Netflix has a nice demo of the service recorded as a screencast. You can see the demo in the video below.
One criticism is about the fact that it is not possible to burn the movies to DVD. I am not sure if this is a valid criticism. If Netflix were to sell movies instead of renting them, then I would definitely expect this from such a service. However, when we rent DVDs on media we do not get to own them. For this reason, this lack of the service may be acceptable.
I mainly do not think this service is noteworthy because of other reasons. Netflix (and many others) wants to get into our living rooms and compete with the giant TV which can also provide on-demand video via cable and satellite providers. In its current form Netflix service is no different than on-demand video and even more cumbersome.
The main advantage of services like Netflix is that it gives the control to the consumer. I get to rent whatever I want whenever I want and wherever I want as long as I get my hands on that DVD media. Plus, I only need to move a finger to do that, I don’t even need to leave the house.
Netflix gives this service exceptionally good since they became an expert on such distribution. What they are trying to do now is to get into a different distribution medium. However, they cannot see the real potential in that medium and try to adapt their conventional distribution manners to this new medium. This is why they do not bring anything new or innovative to the table.
I think that they should have embraced a powerful distribution mechanism on the web. This could have very well been bittorrent (They would probably need to come up with a good way to authorize the subscriber, and use a private tracker). They could give an option to keep the content and upon the purchase of the customer, set it free so that the customer can do anything with it. This way, I think they could come into the living rooms of people not only via their PC but possibly via their media centers, internet enabled set-top boxes, or may be in the future directly through their internet enabled televisions.
What I am saying here may not be possible. I am just brainstorming. What do you think Netflix should have done or can do in the future in the online video market?
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[tags]online video, netflix [/tags]
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