James Helsby

Interpretations: What I think the Netflix/Lion’s Gate/Paramount/MGM Announcement Means

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Yesterday, Xopher posted an article announcing that Netflix had worked out a 1-Billion Dollar deal with Lion’s Gate, Paramount, and MGM to refresh the streaming content on the Netflix Watch Instantly service. Well, I started to think about what the implications of this announcement might be, and decided to get them out into the open, and allow others to start some discussion.

Does my gun seem small on this stream?

If you are familiar with the Netflix Watch Instantly service, you know that the current collection of content is lacking any real substance. It really does appeal more to a niche audience, then to the mainstream. While the reasons for this might be varied; it can be a difficult task to flip through a few thousand film titles to try and find one to watch on a given night.

Add into that equation your families patience, the easy of browsing via a remote, and you might end up just watching a DVD, rather than streaming something through the Internet. In a quick glance through the Action section of Netflix Watch Instantly, the average rating actually seems to fall below 3 stars (viewer rated), with very few movie options being in the 4 or 5 star category.

But what would happen if you made a significant injection of newer content. Content that was either Box office success, or DVD sales/rental success? Remember, MGM has a huge catalog of classic, and well known titles; things like Bond, Tom and Jerry, Species, Stargate, 2001/2010, and Gone with the Wind, just to name a few. Well you end up with more people wanting to stream, and more willing to spend the time to find the show they are wanting to watch. More shows which are 4 or 5 stars, and more money being made via the streams.

Chill-axingBut, here is what I think we might be seeing soon. I think Netflix is on the verge of a pay-for-content system. Basically, what I foresee is Netflix offering an ‘always available’ video library, in addition to the free streams, and DVD deliveries.

Essentially, it would work like this. DVD’s are released in their normal manner, and delivered to your house 30-60 day’s after their initial release (yes, there are talks in progress to stop this delay period.) But what if you could stream an HD copy to your system for the low low price of $9.99, and always from this point forward, be able to access that digital copy for streaming. Not my library

Netflix wins, because it doesn’t have to pay shipping, or worry about piracy. The studio’s win, because they don’t have to pay for media creation and distribution. And we win, because we get our movies when we want them, where we want them, and only have to have an internet connection. Remember, there are an ever increasing number of consumer products on the market which can do Netflix Watch Instantly. TV’s, DVD/BD players, computers, and home consoles. So having a device capable of handling the stream, is becoming less and less important.

Over time, the Netflix user would be building an online video library. No longer needing to purchase media, which fills up shelves.

But in order to make a system like this work, Netflix would have to guarantee that the Movie purchased would always be available to stream. So even if they introduce and later retire the movie from the Watch Instantly vault, a purchase is a purchase, and it needs to be available.

Like I said, this is just conjecture, but I truly believe a system like this is coming soon. Whether it be Netflix of Apple, the online-digital-video-library is coming.

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