Home Entertainment Moving Further Into The Digital Space
As we saw the slow demise of VHS many years ago it looks as though the much loved DVD could be facing a similar fate thanks to the rise of video streaming on demand.
Although still in its relative infancy, video streaming on demand is the next step forward in the way we view media. Netflix was founded in 1997 and originally offering a subscription only service. They had passed 100,000 watchable titles by 2009 and in 2007 they reached their billionth delivery.
Although a subscription service was fairly innovative many years ago, Netflix has redefined home entertainment by offering customers the ability to stream their favourite titles over the web. Even as far back as 2001 Netflix were investing $10m annually in research looking into the feasibility of streaming video to people’s homes and had now made it a viable product offering.
At the moment Netflix dominates the movie streaming market with a 61% share meaning that six out of 10 digital videos watched are delivered via Netflix. Apple competes heavily in this market with their own streaming service Apple TV, yet have only been able to secure a 4% share.
Thanks to reduced subscription prices, increased broadband connections and speeds and the huge uptake of smart phones and tablets, movie streaming has been pushed well into the spotlight.
Netflix has partnered with lots of companies in order to deliver applications and devices that let consumers access Netflix video streaming. You can play Netflix movies with your Xbox 360, PlayStation3, Nintendo Wii, with your streaming set-top boxes, Blu-ray players, DVRs, with Windows Phone 7, with iOS devices like the iPad and iPhone, along with the Apple TV itself. Being able to stream a new release movie on demand straight to your phone is a huge leap forward in the way we view content. But not satisfied with just streaming, they recently invested $100m into developing their own exclusive TV series.
Facebook and Amazon have now thrown their hats into the ring by announcing their own streaming service. Amazon will charge a yearly membership while Facebook has partnered with Warner Brothers to stream The Dark Knight directly through the social networking site using virtual Facebook credits (currently available as gift cards through many US retailers).
Although only a test at this stage, if Facebook can make this a success and encourage other studios to come on board then they will be able to tap into a potentially huge revenue stream by opening up distribution to their 600m registered users. Despite being at test only stage, the news of this partnership, along with the Amazon offering, caused Netflix shares to fall 5%.
The future of this industry is still set to be defined but make no mistake it will be a bright one. Connecting with an audience through everyday devices is the way forward with an endless possibility for application. And if you need some more stats to convince you that movie streaming is the real deal – Blockbuster filed for bankruptcy in 2010 due to debts of $900m citing strong competition from Netflix as one of the reasons.
