In a move to compete against Hulu Plus, Netflix has launched a streaming-only subscription plan in the United States with a $7.99 price tag. Netflix reports more of its members are watching content streamed online than on mailed discs.
Here's the catch: Although the streaming-only service matches the Hulu Plus pricing at about $8 a month, Netflix is charging more for its combination mail-plus-streaming service. Customers who still want to get DVDs in the mail will pay $9.99 a month.
"Streaming went from an interesting Netflix feature to a mainstream feature. There is a wealth of devices that you can connect to your television to stream Netflix," said Michael Gartenberg, an analyst at Gartner. "Netflix's streaming content has grown significantly to the point where it makes sense to offer a streaming-only content subscription. They named the company Netflix, not Discflix. That's for a reason. There's no doubt this is the future."
Moving Away from Discs
Netflix emphasized that watching movies and TV shows streamed online on demand has become the preferred delivery method for its members. The company recently announced that its members will watch more content streamed over the Internet than on DVDs in the quarter ending Dec. 31. In response to the growing trend, Netflix is investing more money to license streaming content than to acquire DVDs.
"No doubt there are any number of consumers who are simply not interested in the disc-by-mail process and are happy with streaming, especially when it can be supported on their phone, their tablet, their computer, and their television set. They can stop and resume on another device where they left off," Gartenberg said.
As he sees it, the issue is how fast Netflix can get the content online that members want to watch. Release windows are shrinking and Netflix is getting more content available for online distribution to compete with cable channels.
Hulu Plus Netflix
Indeed, Netflix members in the U.S. have access to a growing library of movies and TV episodes that can be watched on demand. In 2010, Netflix inked licensing deals with NBC Universal, Warner Bros., 20th Century Fox, EPIX, Relativity Media, and Nu Image/Millennium Films. That gives Netflix members access to first-run theatrical films, TV series, and movie classics.
What's more, there are more than 200 consumer electronics devices -- including the three game consoles, Blu-ray disc players, Internet-connected TVs, and digital video players -- capable of streaming from Netflix directly to the television set.
"The $8 subscription price now matches Hulu Plus pricing. But I suspect consumers are going to be looking at both of these things. There is some content that is overlapping, but there is a good deal of content that's exclusive to one service or the other," Gartenberg said. "For $16 a month, which is significantly less than any cable company, you can get a whole lot of content and not only have it on your computer or your phone, but also on your television."
Posted: 2010-11-22 @ 5:07pm PT