Last week’s news about Blockbuster filing bankruptcy came as no surprise, since the once popular rental business has been in financial distress for quite some time. Between Netflix and Redbox, Blockbuster no longer could compete nor match the efficiency that the competition was offering. People were tired of not having rentals available, but more important, having to race back to the store to drop off the rented disk. The latest competition is going to be from Apple, Google, Amazon and others who are going to compete with Netflix in the lucrative streaming movies over the Internet.
In a recent article it states that:
Netflix has raced to become ubiquitous. In addition to PCs, more than 100 types of devices can stream Netflix movies to a TV, including game consoles and Internet TV set-top boxes like Roku and AppleTV. The company says 61 percent of its 15 million subscribers streamed movies in the second quarter.
The weakness of the streaming service is movie selection. Netflix’s catalog of 20,000 streaming movies does not include many recent Hollywood hits because Netflix has been unable to negotiate rights from all the studios. Netflix has about five times as many titles in its DVD catalog.
Many of the company’s studio deals require it to delay making titles available — either on DVD or online — until they have been on store shelves for 28 days. For example, “Robin Hood,” starring Russell Crowe, is available to stream on Amazon but will not be available on Netflix until Oct. 19. Hulu Plus has the current season of “The Office,” while the most recent episodes on Netflix are from last season.
The industry is still very young, they said, and many companies are experimenting with business models and expanding their video libraries. Streaming requires less infrastructure and therefore has lower barriers to entry than a system built on sorting machines and distribution or even brick-and-mortar stores.
Though competition will keep pricing down for those consumers who choose to stream, it currently will make it difficult to select which service to use. As I have mentioned I have selected a Roku device to stream movies from Netflix, but I do not know how long Netflix will remain the leader in streaming. As with any new industry, it is going to be a few years before we know who the winner will be.
Competition against Netflix is going to be severe since the competition has a huge war chest of funds to fight with. Netflix appears to be the underdog.