Netflix to Deliver Streaming Movies to the PC
Netflix, the US giant online system for renting DVDs delivered by mail, said in a press release, last January 16, that it would introduce, from the beginning of June, a service to deliver movies and television shows directly to users’ PCs, as streaming video. It is not a new source of income but a way to widen publics and distribution devices. Despite few restrictions (service exclusively available in the US and not yet accessible to the Mac OS users), the stakes are pretty high.
The service is free. It is only an added bonus for the customers. The streaming viewing hours depend on the subscription fee. For example, the bulk of Netflix’s subscribers, who pay $18 a month and are allowed to keep three movies at home at all times, will receive 18 hours of free watching every month.
Netflix chose the instant delivery offered by streaming technology over downloads, which can take a while, because it would encourage subscribers to use the system to browse the catalog and discover new movies. If they do not like a movie, they can stop it and will be charged only for the minutes they actually watched.
Like most other electronic distribution services, Netflix’s system will however work initially only with a limited catalog – about 1,000 movies and television shows, only a tiny fraction of the more than 70,000 titles that Netflix offers for rent. Over time, Netflix hopes to expand the catalog of titles and make the service available on other hardware and software combinations, including set-top-boxes, television screens and portable devices.
Netflix is entering a more crowded market that includes not only the likes of Apple and Amazon, but also MovieLink, CinemaNow and video-on-demand services offered by cable companies. But the company wants to make sure it gets a toehold in the embryonic world of Internet movie distribution. With its business model based on free suscription, Netflix has a product that compares well with those of competitors. But DVD supply remains the top priority market. Online film distribution still has to solve some technological (formats, compatibility, convergence) and commercial (piracy) problems, that are keeping the market from developing more quickly.