Netflix TV

[Geekyfanboy]

Posted by Sam on Tuesday, 20 May 2008

http://www.sliceofscifi.com/2008/05/20/netflix-tv/#more-9415

CNN — Preparing for the eventual extinction of its DVD-by-mail rental service, Netflix Inc. on Tuesday is introducing its first solution for subscribers who want entertainment delivered directly to their television sets with just a few clicks on a remote control.

The breakthrough comes in the form of 5-inch-by-5-inch device tailored for a year-old service that uses high-speed Internet connections to stream more than 10,000 movies and TV shows from Netflix's library.

Although it's provided at no additional cost to most of Netflix's 8.2 million subscribers, the streaming service has had limited appeal so far because it doesn't include the latest movies and couldn't easily be watched on anything but a personal computer.

At $99.99, the Netflix set-top box is priced like a DVD player and is just as simple to hook up to a television. A high-speed Internet connection can either be plugged into the box or the device can pick up a wireless signal.

Similar Internet-to-TV devices made by Apple Inc. and Vudu Inc. cost $229 to $295.

"We think this is something that offers a big value at a low cost," said Reed Hastings, Netflix's chief executive officer.

The Netflix box, made by Silicon Valley startup Roku Inc., is the first of several devices that will pipe Netflix's streaming service to TV sets.

LG Electronics is expected to include the streaming capability in a Blu-ray DVD player that it plans to debut during the second half of this year.

Without providing further details, Netflix has said two other major consumer electronics companies are working on set-top boxes for its streaming service.

Hastings is confident that the demand for DVD rentals will remain strong for at least several more years, partly because movie studios aren't ready to fully embrace digital distribution.

But as technology makes it easier to rent and buy movies within a few minutes instead of waiting for them to be delivered through the mail, Hastings realizes his Los Gatos-based company won't survive unless it evolves.

That's why Netflix has poured more than $40 million into its streaming service, called "Watch Instantly," and is now trying to encourage its subscribers to use it more frequently even though it doesn't generate more revenue.

If anything, the streaming service is eroding Netflix's profits because the company's licensing fees are based on how frequently subscribers use it. And any customer who pays at least $8.99 per month for a DVD rental plan gets unlimited access to the streaming service.

Because the new set-top box figures to spur more usage, Netflix expects its profit margins to be squeezed later this year. Even so, the company is still projecting a profit of as much as $83 million this year, up about 20 percent from last year. The bright outlook has helped lift Netflix's market value 16 percent so far this year.

Hastings eventually hopes to recoup some of the added expense by having to spend less money to attract and retain customers as more people enjoy the convenience of the streaming service. Netflix has no plans to start charging an additional fee for the streaming service this year.

Cowen and Co. analyst James Friedland believes the number of Netflix subscribers interested in purchasing the new set-top box will be relatively small.

Part of the problem is that few recent movies are available on Netflix's streaming service. That's a major shortcoming because nearly one-third of the rental requests on Netflix's DVD service are for new movie releases, Friedland said.

"You can't really drive consumers to do anything before they're ready," Friedland said. "You can only give them options. And Netflix seems to be trying to deliver as much as it can (with the streaming service), given the current limitations of the studios and technology."

Netflix offers more than 100,000 movies and TV shows on DVD, about 10 times the streaming service's selection.

Although the streaming device bears the Netflix brand, it's the brainchild of Roku's founder and CEO, Anthony Wood.

After temporarily leaving his startup to work on the streaming device as a Netflix employee, Wood returned to Roku earlier this year. At that point, Netflix paid $6 million for an undisclosed stake in Saratoga-based Roku. Several other former Netflix employees also work at Roku.

[Rico]

I love Netflix, but until almost every new movie can be streamed as well as rented this type of service won't be able to really take off.

[sheldor]

NetFlix on-demand.  The service I have now from the cable company - WideOpenWest - STINKS.  Locked up all the time.  I'm on Netflix now and based on their track record, their on-demand service will shine.

[Geekyfanboy]

New deal brings many CBS genre shows to Netflix streaming - Medium, Twilight Zone, all the Star Treks, Twin Peaks http://bit.ly/heF0GE

[Bryancd]

I love Netflix, but until almost every new movie can be streamed as well as rented this type of service won't be able to really take off.

LOL! This post was 3 years old! I would say that prediction didn't really pan out!

[Rico]

I love Netflix, but until almost every new movie can be streamed as well as rented this type of service won't be able to really take off.

LOL! This post was 3 years old! I would say that prediction didn't really pan out!

Sure it did Bryan.  There's a ton available for streaming now vs. a few years ago.  But you know the weird thing, most Netflix users still do the DVD rental thing via mail and don't stream much even these days.  But it's quickly changing. 

[KingIsaacLinksr]

Wow, 3 years old.  Funny how Apple came out with a $99 box that does the same thing, but better.  :) 

I'd say Instant streaming is getting better, but its not quite there :)

King

[Ronzo]

The reason I like the DVD rental through Netflix are for the extras. You cannot get those through streaming. I hope it does happen in the future. I am currently watching all the old Dr. who, and occasionaly if a dvd is on the wait list, I will stream it and then watch the extras when I receive the dvd.
My wife, doesn't care for the extras, uses the instant service quite often. She watches mainly martial art and action movies (it's a filipino thing), she watches scifi with me and I watch Jackie Chan and Jet Li with her. Both my daughters steam movies through their Wii and I am so glad they like Scifi as much as I do.

RONZO ;D

[KingIsaacLinksr]

The reason I like the DVD rental through Netflix are for the extras. You cannot get those through streaming. I hope it does happen in the future. I am currently watching all the old Dr. who, and occasionaly if a dvd is on the wait list, I will stream it and then watch the extras when I receive the dvd.
My wife, doesn't care for the extras, uses the instant service quite often. She watches mainly martial art and action movies (it's a filipino thing), she watches scifi with me and I watch Jackie Chan and Jet Li with her. Both my daughters steam movies through their Wii and I am so glad they like Scifi as much as I do.

RONZO ;D

Well, don't get used to those extras.  Studios are now thinking (and some acting on this thinking) of locking out extras of DVD/Blue-Rays to non-rental discs only.  So if you get it from Netflix or Redbox, you won't get that access. 

I personally think that is BS and violates some sort of consumer right, but idk.  We're subject to their whims. 

King

[Jobydrone]

Good news about the new shows added to instant streaming.  Looking forward to finally watching all the DS9 and Voyager I've never seen.  Hope the price doesn't go up again anytime soon though, or they're going to price themselves right out of a customer.

[Bryancd]

Good news about the new shows added to instant streaming.  Looking forward to finally watching all the DS9 and Voyager I've never seen.  Hope the price doesn't go up again anytime soon though, or they're going to price themselves right out of a customer.

At $8/month, I think it's a screaming bargin.

[Rico]

This is what digital content should cost.  Same for books, music and all the rest.  It's freaking digital!  No manufacturing, no shipping transport cost, no store placement, etc.  I really wish other companies would look at Netflix and learn something.

[X]

The reason I like the DVD rental through Netflix are for the extras. You cannot get those through streaming. I hope it does happen in the future. I am currently watching all the old Dr. who, and occasionaly if a dvd is on the wait list, I will stream it and then watch the extras when I receive the dvd.
My wife, doesn't care for the extras, uses the instant service quite often. She watches mainly martial art and action movies (it's a filipino thing), she watches scifi with me and I watch Jackie Chan and Jet Li with her. Both my daughters steam movies through their Wii and I am so glad they like Scifi as much as I do.

RONZO ;D

Well, don't get used to those extras.  Studios are now thinking (and some acting on this thinking) of locking out extras of DVD/Blue-Rays to non-rental discs only.  So if you get it from Netflix or Redbox, you won't get that access. 

I personally think that is BS and violates some sort of consumer right, but idk.  We're subject to their whims. 

King

What consumer rights? You're not a consumer to them if you are renting. They lose money on that because it's not sales that they are getting. It's also in line with the previous rental agreements that they've had with other rental companies in the past. The rental company buys from them, but in a way that allows others to purchase the product with added features later.

It makes perfect business sense for all parties involved.

[Bryancd]

Heck, I'd pay $10 without batting an eye, which at this rate will be comparable to about 2 gallons of gas......

[X]

Heck, I'd pay $10 without batting an eye, which at this rate will be comparable to about 2 gallons of gas......

ditto!