When Netflix was moving to streaming they made a high risk decision. Their streaming service would be a quantity value proposition - a huge library of older films and TV shows at a fixed price of just $7.99/mo. They would grow streaming by adding original content and more older shows to their 'one price for everything' library.
They were between a rock and a hard place. They couldn't go after what was obviously a huge attractive market - streaming more current movies. To do so would knock the legs out from under their profitable DVD rental cash flow.
That decision left a lot of money on the table. Little Coinstar's DVD kiosks of newer movies earn four times what Netflix does.
Amazon and former Coinstar/Verizon are moving to take the current movie streaming market using a different concept - PPV. PPV is the only way to make high demand movies affordable on the streaming public. Since the DVD rental market is established, they know the demand is there.
Now Netflix slowly loses its DVD rental base. IMO banking on original content (which assumes that a DVD rental company could compete artistically) was desperation. It better work. If it doesn't companies offering a library PLUS current movie PPV streamng will destroy them.
It is a very interesting case study.
Some people like buffet(NFLX), some like fine dining(HBO), some like mexican food(Lovfilm?), some vegetarians(History Channel). Various types of streaming services will emerge in the market. Netflix can't be all things to all users. They are near saturation now and when other types of streaming services are made available, it would only further dilute NFLX's current subscriber base.
This is an incorrect narrative. Netflix didn't go after new releases because they were flat out unavailable to license, particularly at the money they could afford to pay. It never had anything to do with DVD.
PPV has been around for a very long time and has been proven a failure. It's just less risky to attempt since you don't drop 100s of millions on upfront licensing.
Maybe. I have always suspected they were blocked financially and contract-wise from streaming newer releases. Amazon and former Coinstar apparently less so.
You and I disagree totally on PPV streaming and its likely effect on the DVD rental business, anybody's rental service. It may take years for the notoriously slow (and sensibly protective) studios to come around and DVD's to die. But on-demand PPV via internet steaming is compelling. Why would anyone with a debit or credit card go to/from a nasty convenience store or use Netflix 's delay rental when a large selection of recent movies is available instantly from the couch for $3 or $4 bucks?
The video distribution market is around $150 billion just in the US. Netflix is the only company that are growing revenues at a rate of over a billion a year. No one else comes close. That's the big picture. The big question is can anyone stop Hastings from growing his streaming business 40% year after year. I don't see anybody that can.
For their streaming, they used to have some #$%$ asian movies coming in... now they don't even have those cheap stuff coming in... they have the "last Shaolin monk" with amateur actors... why bother?.... My son is stuck with his star war DVD for a month... couldn't finish the damn thing... and I am stuck trying to scrap something to watch. I almost want to cancel both but then I have nothing at all.
I don't know if they can succeed or not. I subscribe. It's good value, and not just older movies. For me, some Brit, French and Danish TV serials are much better than ours.
I do think their original content thrust is being overplayed. I understand why they are doing it - get some add to the subscriber base. But the underlying assumption that a DVD rental company will succeed artistically is bazaar.
A most interesting case study.