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Netflix Dominates Downstreaming

Haywood

Well-Known Member
Famous
I think streaming will kill physical disc rentals within the next five years. If Vudu would drop their ridiculous $6 rental price for newer releases, I doubt I'd ever go out to rent a disc again. Netflix streaming is quickly becoming the best option for back catalog and potentially for original material, but their business model just doesn't work for new releases.
 

mzpro5

Well-Known Member
Famous
Haywood said:
I think streaming will kill physical disc rentals within the next five years. If Vudu would drop their ridiculous $6 rental price for newer releases, I doubt I'd ever go out to rent a disc again. Netflix streaming is quickly becoming the best option for back catalog and potentially for original material, but their business model just doesn't work for new releases.

Please elaborate.

I thought it was the studios/distributors that decide what they will allow to be streamed not Netflix. As I've said before I think they would prefer to be all streaming cutting the overhead from disc rentals.

The studios/distributors are afraid of losing money on new releases by making them available too soon and cut into disc sales. Same mentality that the music business was in a few years back.
 

Flint

Dog Faced Pony Soldier
Superstar
What I find most fascinating about the Netflix model is that they are utilizing the biggest competitor's infrastructure to distribute content which inherently means their biggest competitor could provide the same service for a lower COGS.

Netflix is using Amazon's cloud service to store and stream the content they offer their subscribers. Amazon also offers streaming content, something they did before Netflix switched over. The only real difference to consumers is the business model... Netflix charges a subscription with unlimited shows and Amazon charges per show. The user interface and integration into consumer gear is also a differentiator for Netflix.

But Amazon is so much bigger with deeper pockets and greater resources, so what happens if/when they decide to really go after this market? The big differentiator will be in which company gets the latest content the soonest and who has the largest catalog of popular shows. All the deals Netflix is signing today is critical to their short term future. In time the studios will be forced to give similar deals to other streaming content providers, so Netflix will have to find new was to innovate in order to stay ahead.

We spend hours studying this market and the nature of how success is earned and maintained in my group at work because it is a very intense, cutting edge, new market model with very aggressive competition, much like my company's business.
 

mzpro5

Well-Known Member
Famous
Flint said:
What I find most fascinating about the Netflix model is that they are utilizing the biggest competitor's infrastructure to distribute content which inherently means their biggest competitor could provide the same service for a lower COGS.

Netflix is using Amazon's cloud service to store and stream the content they offer their subscribers. Amazon also offers streaming content, something they did before Netflix switched over. The only real difference to consumers is the business model... Netflix charges a subscription with unlimited shows and Amazon charges per show. The user interface and integration into consumer gear is also a differentiator for Netflix.

But Amazon is so much bigger with deeper pockets and greater resources, so what happens if/when they decide to really go after this market? The big differentiator will be in which company gets the latest content the soonest and who has the largest catalog of popular shows. All the deals Netflix is signing today is critical to their short term future. In time the studios will be forced to give similar deals to other streaming content providers, so Netflix will have to find new was to innovate in order to stay ahead.

We spend hours studying this market and the nature of how success is earned and maintained in my group at work because it is a very intense, cutting edge, new market model with very aggressive competition, much like my company's business.

I wasn't aware that NF was using the Amazon Cloud server. May account for why things seem to be streaming better.

I am really intrigued that some group utilized the Amazon cloud to do the big Playstation hack. Wonder how that will effect NF reliance on Amazon.
 

Haywood

Well-Known Member
Famous
mzpro5 said:
Haywood said:
I think streaming will kill physical disc rentals within the next five years. If Vudu would drop their ridiculous $6 rental price for newer releases, I doubt I'd ever go out to rent a disc again. Netflix streaming is quickly becoming the best option for back catalog and potentially for original material, but their business model just doesn't work for new releases.

Please elaborate.

I thought it was the studios/distributors that decide what they will allow to be streamed not Netflix. As I've said before I think they would prefer to be all streaming cutting the overhead from disc rentals.

The studios/distributors are afraid of losing money on new releases by making them available too soon and cut into disc sales. Same mentality that the music business was in a few years back.

I don't think studios are going to make new release content available at a price that works with Netflix subscription-based model. I predict that new release material will remain pay-per-view.
 

mzpro5

Well-Known Member
Famous
Haywood said:
I don't think studios are going to make new release content available at a price that works with Netflix subscription-based model. I predict that new release material will remain pay-per-view.

If they are offered at a reasonable rate ($3) I have no problem but anything above $4 is too much IMO.
 
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