Netflix will begin offering some of its customers the ability to watch movies through their PC's via streaming video. This is not revolutionary but it does send a signal to others that there will be a steep entry price into the movie rental business and that those who choose to enter must be ready to change, innovate and move at the speed of the internet! More on the details here.
Netflix has been able to outpace some stiff competition. It was 2002 when Wal-Mart announced it would enter the online DVD rental business. They dropped that initiative in 2005 and now refer customers to Netflix. Last year Apple and Amazon announced they wanted to play in that same sandbox. Blockbuster made changes to their rental policy when they began giving its online subscribers the option of bypassing the mail and returning DVDs to a store so they can obtain another movie more quickly.
I'm sure the amount of customers willing to sit for hours and watch movies on their PC is currently a fairly small number. Considering the increasing convergence of media, PC, HDTV and high speed internet, those numbers will rise exponentially over the next few years. It wouldn't take much for those with a computer with TV out capability, broadband access, and an HDTV to take advantage of this innovation and be loyal to Netflix for some time to come.
Although their earnings went from $6.5 million in 2003 to an unofficial $44 million in 2006, the stock is down 40% in the last three years. Analysts say the competition in DVD and movie rentals is too strong for Netfilx to keep their 12% of the market. I say this is one step ahead for a market leader. They'll have to be planning their next innovation now so the competition keeps busy with this one.
The competition in this market will be good for consumers and will be a good show to watch in its own right. Grab the popcorn and smile!