Netflix and the Extinction of DVDs, et al

It was recently announced that Netflix will add streaming to the Nintendo Wii as one of its capabilities.  They already stream to personal computers, the Microsoft Xbox, Sony Playstation and various small devices.

As we just received a Wii for Christmas I am excited to try this out.

As a technology geek I have long thought out how to move my entire media collection (photos and personal videos, music and DVDs) to a computer in our house that we could watch from any tv or listen on any stereo.  This is already easily done but the funds are a little out of reach for our growing family and it certainly isn’t available for the masses.

That’s where Netflix comes in.  They revolutionized the DVD rental industry when they allowed you to rent through the mail with no late fees.  While I was dubious at first at whether their business model could really turn a profit with that much overhead they have done an incredible job.  I’m really glad they have made it through the roughest part.

When Blockbuster saw the competition Netflix was creating they started their own DVD rent by email service, however, they one upped Netflix by allowing you to return them back to your local store.  With Netflix you had to send your DVDs in before they mailed you your next batch.  With Blockbuster, you could return your DVDs back to any local store and rent another right there.  No waiting.

Around the same time Apple thru iTunes, Amazon and Netflix allowed you to download your movies.  However, this was really confined to users who watched on their computers or had laptops or iPods connected to their TVs.  This was a very small market mostly consisting of consumers with technical knowledge able to afford the equipment or college students.

However, then comes Netflix streaming content to the Xbox, Playstation and now Wii.  Suddenly they have an audience that is already familiar with playing rich content on their own devices.  Console gaming devices are almost as much of a part of any home entertainment system as is a DVD player or stereo system.  These days connecting gaming systems to the Internet is a simple task. 

In my opinion, Netflix is the leader in bringing true streaming movie content to the general masses.  While cable and satellite companies have been offering this for years it just hasn’t really caught on.  In talking with my friends, we all have cable or satellite offering the feature, but we just don’t use it.  I don’t know if it is the limited available content or the pricing.  But we just don’t use it.

Another incredible thing that Netflix has done is completely change the overhead they are required to keep.  As they move more and more of their customers to streaming content, their assets will be completely digital available anytime and anywhere in an instant.  There will be no need to ship physical and fragile media all over the country amounting to an incredible cost in shipping time, warehouse inventory, staff, etc.

By giving the general media consumer instant access to movies on general devices they already own Netflix is pushing the DVD out to pasture and really making content over the Internet a reality.

There will always be consumers who prefer to own physical media, but the writing on the wall is even more pronounce than ever before.

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Matt Penner

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