Tuesday, January 16, 2007

Netflix Eats Itself

The DVD-by-post company Netflix has decided that it’s time for it to cannibalise its own market before anyone else can and is to unveil a trial that showing movies and TV episodes over the Internet this week. The company launches its new "Watch Now" feature today to a fraction of its more than 6 million subscribers and will be offered as part of users’ existing subscription.

It's including the service in existing subscriptions and plans to roll it out to 250,000 more subscribers by June (so that it can make sure its servers can cope with the as-yet unknown demand). But the movies available are hardly worth not going to the post box for. Movies available for the launch include a lot of "B" movies such as "Kickboxer's Tears” and classics like "Network," "Amadeus," "Chinatown" and "The Bridge On the River Kwai." Only a thousand or so of the 70,000 titles Netflix carries will be available at launch.

Users will need to install a download client that only works on PCs and will then be able to watch anywhere from six hours to 48 hours of material per month streaming over the internet. Apparently, the allotted viewing time will be tied to how much customers already pay for their DVD rentals. Under Netflix's most popular $17.99 monthly package, subscribers will receive 18 hours of Internet viewing time, roughly equivalent to ten movies a month.

It's becoming a crowded market with services like CinemaNow, MovieFlix, Movielink, Vongo and Amazon.com Inc.'s recently launched Unbox as well as Apple and iTunes now that it's launched its Apple TV. I've also heard that a number of the studios are planning to launch their own services - Sony has already done so - so it's a high risk and highly competitive market, but Netflix had no choice but to put its toe in the water, however hot it might be...

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