Talking tech since 2003

When it comes to online entertainment streaming services, Netflix is easily one of the most well known, recognized, and trusted brands out there.  The company, which was founded in 1997 as a simple mail-in movie rental service quickly became a huge national brand when their “all you can eat” DVD rental service took off.  From the get-go, Netflix took advantage of web-based solutions in order to allow end-users to organize their waiting lists and overall customer experiences.  But even though the unlimited DVD rental service was a surefire hit, the need for instant gratification began to take hold of people who in turn became less and less satisfied with waiting for DVDs to arrive in the mail.  This, combined with the increasing accessibility and availability of broadband connections was the perfect recipe for Netflix to start a streaming service in which users could watch content instantly.

As the times changed, DVD movies – which had succeeded VHS tapes only a matter of years prior – began to be slowly moved away from my Netflix’s customer-base.  Rather, it became more of a standard for users to view their content online without the hassle or need to wait for a mail delivery.  And while it was never official, it became increasingly obvious that Netflix was changing its venture to focus more and more on the streaming aspect of content delivery.  Today, however, Netflix made an official press release that confirmed what we have all been speculating: DVDs are a thing of the past.

After stating that Netflix has changed its goals to become “primarily a streaming video company delivering a wide selection of TV shows and films over the Internet”, Reed Hastings, the co-founder of Netflix went on to state that the company was creating a new price plan for users who wished to receive their content in an electronic-only fashion as apposed to having the mail option as well.

For $7.99 per month, a Netflix user can view all of the online content that he or she desires.  While this may seem like a great value, it is also important to note that despite the rapid transition to digital streaming services, Netflix still has a significantly better selection of movies and television series on DVD.  In fact, it has been said by others that Netflix’s online streaming service only has one-fifth of the content available via mail.

On this note, DVD-by-mail service will still be offered, however it will cost an additional $2 per month extra.

What does this mean for Netflix and the entertainment business as a whole?  First off, I think that this is a genius idea in the sense that it will lower Netflix’s cost of doing business and will ultimately help them in keeping prices low.  While I realize the $2 per month extra for what users already are getting is a flat-out price increase, I also realize that Netflix has to cover their increased costs.  At the end of the day, I think this shows that the traditional postal system is simply over-priced, inefficient, and ultimately inadequate for handling new-aged media.

While many are expressing concern over the relatively small library of available content with Netflix’s online streaming services, I am confident that a company as large as Netflix wouldn’t make such a dramatic move if they were not relatively sure that they were going to be adding more content in the future.  Sure, it’s a let-down for the time being, but I am sure that Netflix will do right by the consumers in the long-run.

When it comes down to it, this is just another example of the transition to web-based television.  Why?  I think Netflix, being a newer company, is a lot more open-minded than traditional media companies.  For this reason, I feel that Netflix is more willing to go in new and unorthodox directions as apposed to media-giants who simply want to hold the status quo.

What do you think?  Are DVDs going to be yet another thing of the past?  Is web-based distribution the future?  Let us know in the comments!

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