Holtzbrinck Online: NetFlix Watch Now Program

January 16, 2007

NetFlix Watch Now Program

Netflix recently unveiled their "Watch Now" program that is available to some subscribers already and should be available to all subscribers within six months.

The details? It's pretty simple - you get one hour per month of online video watching for each dollar of your subscription plan. So if you have the $17.99 / month plan you get 18 hours of online video watching. It is currently limited to people running Windows XP and only streams from a browser - so you are unable to burn it to a DVD or put it on your iPod. With a good enough connection quality can approach that of a DVD. The service currently encompasses only about 1,000 movies and TV shows (out of Netflix's collection of 70,000), but that will grow over time.

What is beautiful about the program is that it does not limit how many videos you watch, only the amount of time you spend watching them. So in addition to watching a full length video you can use this service to sample movies you are thinking about renting, or catch the last few minutes of something you just didn't have time to finish last week.

The New York Times article about the Watch Now program is rather gloomy, pointing out that Netflix is in a crowded marketplace and that their most likely competitor, Blockbuster, has finally rolled out a working subscription plan that seems to offer everything Netflix does plus the ability to exchange movies in-store rather than waiting for them by mail.

Despite pessimism from the Times, I can not help but feel that this program is a grand-slam for Netflix. It provides an electronic content model that offers an unbelievable amount of flexibility for users, the content scales with current plans so that there is incentive to increase to a better plan without users feeling like they are being forced into paying more money for an additional service. And most importantly of all, it paves the way for Netflix to change business models once the infrastructure and demand for digital distribution of movies is firmly in place.

The result? A somewhat limited but still very useful addition to an already popular service, and in the background Netflix can work on the legal and technical difficulties behind removing those limitations so that they can eventually offer truly unfettered digital downloads. That sounds pretty good to me.

Posted by Matt on January 16, 2007 at 12:56 PM in Video | Permalink

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