Wednesday, March 21, 2007

Netflix transforms the media landscape. Again.

Netflix will soon update its once revolutionary model of capitalizing on the long tail of movie watching while dispensing with the need to visit a brick and mortar establishment.

Already available to some users (myself included), Netflix's streaming movie service will be fully available to all by July 2007. Users essentially will get one hour of viewing time for each $1 of their monthly subscription fee. Initially only 1,000 titles will be available out of a possible 70,000 on DVD, but the number is the same Netflix launched their service with in 1999 and will increase over time as both consumer demand and capacity to deliver the streams ramps up.

Why is the availability of streaming video important?

The long awaited dream of true video-on-demand is finally here. Streaming video is not a new technology, but the pipes to deliver the content to a critical mass of users and the ability to render the streams on the desktop had to evolve to the point where they are today. Both the Bandwidth Law and Moore's Law certainly applied in shaping the timing and availability of Netflix's first-to-market offering of on-demand commercial content from major studios.

How will Netflix's offering transform the media landscape?

Streaming video satisfies both movie watchers who want the gratification of instant movie watching rather than lengthy 1+ hour download times and content owners who are concerned that downloaded content will be unlawfully shared.

It may also change the way we watch movies by providing the ability to easily start, stop, and switch movies.

Per CEO Reed Hastings, Netflix intends to put movies on "every Internet-connected screen, from cell phones to PCs to plasma screens." Their new service offering is the first step and raises the bar for other heavyweights like Apple and Blockbuster who inevitably must follow suit in order to compete.


Kenneth Danila said...

I forsee one problem with Netflix's streaming model: quality of viewing.

One constant commentary in reviews of Amazon's Unboxed video delivery to Tivo is that it lacks the quality of a DVD (or especially of an HD-DVD) when viewed on large-format television. And this is for a pre-downloaded (not streamed, which is subject to the blips and burps of one's cable modem or dsl line). While that may be fine for 95% of the viewing audience that aren't videophiles or are just watching old reruns of Mad About You, who wants to watch a fuzzy, crackly version of The Departed?

Or beyond that, looking at Netflix's ultimate goal (ie- serving every connected device with a screen), what do cinematographers think of their masterpieces being viewed on my 1.5" cell-phone screen? Guillermo Navarro must be rolling in his grave. (Well, he's not actually dead yet.)

I think there are some things that are very appropriate for an on-demand, place-shifting model (sports, news, most of television), but I don't forsee Netflix selling much of their catalog via streaming in the near future, until high-quality broadband to the living room is more pervasive, and they have a mechanism to play DVD (or HD-DVD) quality video on an appropriate viewing platform.

Elena Postal said...

The reality is that many of us are already happily watching video of sub par quality from non-legal sources on our display screens.

I've used the Netflix offering a number of times when I didn't want to wait an hour or more for a high def movie to download with my broadband connection. The video was neither "fuzzy" nor "crackly" and play started within 15 seconds.

Certainly an attitude change is necessary for these streaming services to take off, but people are already watching video on their cell phones in Asia.

We'll see what the future brings!

Phil Provost said...

What Elena posted can also be said to be true for the music industry. Many people are now quite happy listening to compressed music files (e.g. MP3 files) of a lower quality than the music's original fidelity, all for the sake of convenience and speed. I can download an MP3 file in less than a minute using a broadband connection and there is certainly a trade-off between quality and quantity when it comes to storing music files on an MP3 player.