Netflix preparing to roll out "What Now" service
Wow, the video on demand space just keeps heating up. How does one even keep up? With dozens of major movie, television, software, networking and mobile device companies all focused on making it even easier for users to access their favorite content, I can't help but wonder if all of these industries are investing more R&D dollars than the market is prepared to reward.
TechCrunch is reporting that Netflix is rolling out a fairly revolutionary new service -- both in terms of media distribution but also in terms of evolving their own innovative business model:
But now Netflix has fired back with a really excellent new service that could swing momentum back in their direction. This morning, a select number of Netflix’s 6 million subscribers will have access to a new Watch Now product that will stream television shows and movies to a Windows PC. The remaining members will be given access over the next six months. About 1,000 movies and tv shows will initially be available (including some hits - NBC’s “The Office” is included, for example). Studios contributing to Netflix’s new service include NBC Universal, Sony Pictures, MGM, 20th Century Fox, Paramount Pictures, Warner Brothers, Lionsgate and New Line Cinema.The best part - it’s free.
If true, this is where the plot thickens:
Netflix is budgeting $40 million to cover licensing and overhead costs of the service over the next year, which will, by the way, wipe out most of their operating profit of $17 million or so per fiscal quarter. Unless of course this service results in millions of new subscribers.
As a fairly loyal Netflix customer, I'm looking forward to gaining access to this service. That being said, there's no doubt about: this is a *huge* gamble given the immediate overhead involved. If it fails miserably, is it possible that Netflix could fall to the wayside and be trampled by companies. TiVo is another company that earned incredible customer loyalty -- including from me. However, I haven't used by TiVo in a year since I invested in HD and just last week I upgraded to Comcast's HD DVR box for $5 more a month. While I miss the TiVo interface, the Comcast HD DVR has hit 80% of the primary use cases and I'm very happy with the product.
