The Next Net: Netflix Tries to Dodge a Bullet With Streaming Web Movies

January 16, 2007

Netflix Tries to Dodge a Bullet With Streaming Web Movies

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Originally uploaded by Soviet.

Following in the footsteps of Amazon, Apple, and Joost, now Netflix is dipping its toes into the Web video waters with a service free to subscribers that will stream movies to their PCs. Netflix is launching with just 1,000 titles, and rolling out the service over the next six months. While the service doesn't break any new ground, it is yet one more indication that video offerings on the Web are about to get more sophisticated. And for a small, but growing, set of broadband junkies, watching full-length movies streaming over the Web may finally catch on.

For all weaknesses of the announced service, this is just a baby step for Netflix. As CEO Reed Hastings told me during an interview at the end of last year:

What the Internet offers is cheap and instant delivery. That will be a big product improvement, We will get into it next year. But when is it a big market?. It could be three to 10 years.

He obviously thinks he has time to make improvements down the line—like expand the catalog of streamable movies and make them portable (or at least watchable on your TV). For now, though, it looks like he is introducing Web video simply as a bundling strategy to prevent subscriber defections. If some other Web video service becomes really compelling, that sort of me-too strategy is not going to cut it.

Posted at 02:14 PM in Media & Marketing, Retail & E-Commerce, Web video | Permalink