Netflix - Instant Movies

(Reuters) January 16, 2007 - According to this news release via Yahoo! News, Netflix is offering its long awaited instant movie delivery service online. The service allows users to view nearly 1000 movies and TV shows on their PC's at no additional charge. The new product is scheduled to be demonstrated by Netflix CEO Reed Hastings at the National Retail Federation convention in New York. Netflix will be receiving an award today for their innovation in retail business. Hastings said that this new feature is aimed at the under-30 web users who made YouTube so popular.

Netflix intends to be seen on every device from cell phones to PC's to plasma screens, but the starting place, according to Hastings, is the personal computer. The company has been working on this virtual delivery for some time, but the new release follows Blockbuster's pushing its own DVD rental program of allowing users to swap their videos in stores, which is seen as a threat to Netflix's online rental dominance.

This instant viewing feature allows Netflix to compete with Starz Entertainment's Vongo, as well as MovieBeam, MovieLink and CinemaNow players. The goal of Netflix is to reach 20 million subscribers by 2012! Netflix's subscriber base is currently 6 million, which dwarfs their next closest competitor.

The instant viewing aspect will only be available to subscribers who use the Windows XP and Vista operating systems. With these operating systems, subscribers can install the Netflix software and playback DVD quality files almost instantly. The program does not download huge media files, but rather “streams” them directly to the subscriber's PC. Members will be able to stay connected utilizing cable of wireless connections, while viewing their movie or TV selections. The new software is designed to adjust the resolution based on the user's bandwidth so that the video does not freeze.

Netflix subscribers can view instant video based on their rental plan, with lower priced plans being allowed 6 hours per month. Higher tiers are allowed to view up to 18 hours of free live streaming video each month. Hastings pointed out that increased viewing will provide a model for potential cost reductions and future access. The service will be gradually increased over the next six months to determine if the Netflix servers can handle the flow.

Deals with NBC Universal, Sony Pictures, MGM, 20^th Century Fox, Warner Brothers, New Line and others will provide NetFlix with potentially unlimited content and growth potential in this new venture.

The trend towards expansion of user flexible media formats has been set. We will soon have the capability to view a virtually limitless spectrum of digital media from anywhere, to wherever we want it delivered. Regardless of the motivational factors that bring us these neat features, the enjoyment, flexibility and mostly access is an exciting thing for technology today. On a personal level, I am so fed up with Blockbuster right now that I am 100 percent sure that Netflix is about to be one customer richer by the end of the week! That is my prediction for the day.