Too early for a streaming-only Netflix plan?

I thought it was a bit of a non-story when Netflix CEO Reed Hastings first mentioned that the company would at some point in the future offer customers a streaming-only subscription – 2010 was mentioned as a possible time frame – as frankly it’s kind of obvious that one day this will be case. The DVD format won’t last for ever, although it’s not going away any time soon, and is gradually being replaced by on-demand Internet delivered video. This week the company’s Chief Financial Officer Barry McCarthy echoed Reed’s comments, saying that a streaming-only plan will be launched in the “foreseeable future”.

However, while Netflix certainly has the distribution for a streaming-only service – Windows, Mac, set-top boxes, Blu-ray players and Microsoft’s XBox 360 games console – I’d argue that it doesn’t yet have a large enough streaming content library alone to pull in many additional subscribers.

Just 12,000 titles are available on-demand, compared with 100,000 for DVD rentals by mail. For now I still believe it’s Netflix’s hybrid offering that makes it so attractive, something that Reed himself has repeatedly talked up.

“… since a good deal of content will be available only on DVD for some years, a hybrid offering like ours is differentially compelling to consumers in comparison with any online only offering.” (Reed, Q3 earnings call 2007)

last100 is edited by Steve O'Hear. Aside from founding last100, Steve is co-founder and CEO of Beepl and a freelance journalist who has written for numerous publications, including TechCrunch, The Guardian, ZDNet, ReadWriteWeb and Macworld, and also wrote and directed the Silicon Valley documentary, In Search of the Valley. See his full profile and disclosure of his industry affiliations.

2 Responses to “Too early for a streaming-only Netflix plan?”

  1. Dan Rayburn says:

    Hey Steve, I think you are dead on. Netflix needs more inventory before they can start charging for a streaming only plan and Netflix knows this as well. They are not stupid folks over there. Unless they are going to charge $2.99 for the plan, which won’t happen, they need to have a lot more content if they are going to charge $6.99 or something with a real price point.

    I don’t see how this is a news story either. Yes, Netflix will one day offer a digital only plan, but we all already know that.

  2. Jason says:

    “I’d argue that it doesn’t yet have a large enough streaming content library alone to pull in many additional subscribers.”

    I don’t think you could argue that point, because I don’t think anyone would take the other side.

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