Friday, March 16, 2012

After AppleTV Announcement - New Business Model for Netflix?

One of the lesser announcements in Apple's recent presser was that the new AppleTV software would let users subscribe to Netflix (and MLB) through iTunes, instead of dealing directly with Netflix. 
It’s a win for users and content providers. One of the challenges that companies such as Netflix face is getting subscribers to follow through with the sign-up process. It’s one thing when the content is primarily consumed on the Internet. For more passive devices — like the television set — a user who has to go to a different device just to sign up may end up putting off the purchase.
  On its own, and interesting but not too significant added feature.  But then Reuters reported that Netflix was also in talks with major cable companies about offering Netflix streaming service through their Video-On-Demand service. This is what DBS operator Dish Network is trying with the remnants of its Blockbuster acquisition - and what Comcast is promising with its Streampix streaming service.  Already, there are several niche streaming services available via separate subscription through VOD.  But with the wider content options and on-demand service, this could prove competitive with general interest channels, and even pay channels.  Starz was the first to recognize the potential, and offered streaming access of a month's worth of content to subscribers, and recently HBO entered the market with HBO Go.  HBO's even making deals with TV and OTT manufacturers to incorporate HBO Go access as an app.
  The pay channels, and many cable channels, have also attempted to become more than a content packager by developing its own original programming - providing consumers with unique content that differentiates them from other options.  Netflix is also starting to move in that direction, with recent deals to develop original programming for its streaming service.
As Netflix starts to shift away from just licensing content and tries its hand at creating its own original programming, it makes sense that the company could see itself as a kind of HBO-alternative, especially to cable companies that are looking to hold on to customers.
Netflix looks to be countering the increased competition in its streaming market by taking advantage of the increasing convergence of delivery technologies to expand into the premium channel market, and by working through multichannel programmer's VOD offerings and shared billings it is expanding its market range beyond those with connected TV's or OTT devices.  These moves should at least offset some of the loss from the entry of new competition in its primary streaming market.  And Netflix also has the separate business line of video rentals to help cover initial declines until it can establish itself in these new markets.

Source -  Netflix's Aoole TV Deal Could Signal New Business ModelMashable Entertainment blog


  1. Apple products continue to both amaze and fascinate me. The new steps forward for AppleTV are very impressive. I remember reading that Netflix lost a significant amount of users when the pricing went up in the fall. However, with AppleTV and Roku taking the world by storm, live streaming is so popular, so Netflix has capitalized on the popularity and regained numerous former users. I think Netflix will stay relevant despite the advancements in the AppleTV technology. Its too popular of a product and too desirable.

  2. This is another score for Netflix and Apple. It has been available for awhile on iPads, iPhones, and iTouchs; it's just another drop in the bucket. Personally, it is a wonderful idea because people enjoy watching movies and don't necessarily wanted to pay VOD prices or visit a movie kiosk everytime.It is a great way for Apple to compete with other streaming players in the market.