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Netflix: Video Streaming Will Kill DVDs
Company To Spend More Obtaining Online Streaming Rights

Posted: Monday, November 22, 2010
Updated: 9:11 pm CST November 22, 2010

Los Gatos, Calif. -- Netflix introduced a new plan Monday that, for the first time, relies solely on video streamed over the Internet rather than the DVDs that it has mailed to customers since the company was founded more than a decade ago. The shift demonstrates how quickly consumers have transitioned from physical media players to digital entertainment that can be browsed, watched again, or discarded without ever having handled a disk.

The company has already said that its members are watching more content streamed over the Internet than on DVDs. To keep customers happy, the company said it will spend more to license streaming content this quarter than it will on buying DVDs. "We are now primarily a streaming video company," co-founder and CEO Reed Hastings. And Netflix said it will also raise prices on plans that include physical DVDs.

That sent shares of Netflix up 9 percent to an all-time high Monday. Under a plan that allows for one DVD rental at a time, along with unlimited movies and TV shows streamed over the Internet, will cost will be $9.99 per month, a $1 increase. Current members will see the change in their monthly bill in January, while new members will see the price immediately. The streaming-only plan will cost $7.99 a month. Netflix already has a streaming service in Canada for a monthly fee of 7.99 Canadian dollars ($7.86).

Netflix ended October with 16.9 million members in the U.S. and Canada and predicted it would gain another 2.1 million to 2.9 million customers by year's end. That means Netflix could enter 2011 with more than 19 million subscribers, doubling the service's size in two years. Netflix, based in Los Gatos, Calif., is spending heavily to obtain the streaming rights to more movies and TV shows to help lure more customers and shift more of its existing subscribers away from DVDs.

In the third quarter, Netflix spent $115 million on video streaming rights, up from just $10 million at the same time last year. Spending on DVDs dropped 35 percent from a year ago to just under $30 million in the third quarter. Shares of Netflix Inc. jumped $14.97 to $188.04 after reaching as high as $188.18.

Copyright 2010 by The Associated Press. All rights reserved.

In my experience, streaming video to your TV is a shoddy-at-best way of watching movies. You're at the mercy of your internet connection, and even if that's running at full-speed, how's your wifi connection?

Plus, there are a lot of videophiles out there who care how their movies look, and the movies I've seen streamed from Netflix don't touch the quality of Blu-ray, or even DVD.

As long as this is the case, there will still be a demand for DVD and Blu-ray.

Also, when I tried the streaming service, a good chunk of their "catalog" (older) titles were offered in dreaded "pan and scan." So I was would be watching a widescreen movie cropped to pan and scan on my widescreen TV. Ridiculous!

Personally I hate streaming, and I love my dvd collection.
If I like a movie or a tv series I always try to buy it on dvd, even if it they would be available on streaming for less money.

Nah DVD's are here to stay. We'll eventually get only Blue Ray I'm sure, but I don't see Video streaming taking it's place

I'll just go and buy the DVD...if I get the money.

I'm a deaf chick. Video streaming helps me how? Will my content be guaranteed to be closed captioned/subtitled? Um, no, I'm sticking to my DVDs/Blu-Rays (when I do get a Blu-Ray player), TYVM.

That's a great point, Allison. I didn't even think of that!

So once again, boo to streaming.

I'm a deaf chick. Video streaming helps me how? Will my content be guaranteed to be closed captioned/subtitled?

Netflix has started adding captions to some of their streaming titles, but the selection is limited.


I watch streaming movies and TV shows through my Roku, but I definately prefer DVD.

I prefer to watch tv shows and movies on the tv through either dvd or on whatever channel it's on. For me trying to watch a movie or show online is hard because I can only see part of the screen at a time.

It won't affect DVDs. However it might affect cable/satellite companies. Alot of households are starting to cancel cable etc.However netflix is only part of the reason.200+ commercial filled copycat tv stations that show mainly garbage programs most likely is the main reason.Unless cable companies become more flexible and tv stations get their act back together and start once again showing quality television shows and cut the amount of commercials waaaaay down--cable/satellite companies may be in big trouble.---If anything DVDs will become even more popular because of what alot of tv stations have turned into.

Bad news for me, since I barely have enough free space on my PC to receive streaming videos. I once tried to stream a movie from Netflix, and I never got to finish doing so, because it stopped dead cold a good 10 minutes into the film.

Netflix has started adding captions to some of their streaming titles, but the selection is limited.


I watch streaming movies and TV shows through my Roku, but I definately prefer DVD.
Yup, knew about that... Still not paying $10/month for a service with a limited selection of captioned stuff. This is like when I was a kid back in the 1980s... It wasn't yet a law to have captioning on TV programming, so if you wanted captions on your TV, you had to buy a separate decoder box to hook up to your TV, because back then, they didn't have a built-in decoder chip. I imagine ours was pretty expensive! This is the one we had, circa 1988. (http://farm1.static.flickr.com/112/298277275_6461482522.jpg?v=0)

Think about it... People who rely on captioning still get gypped today. Most movie theaters don't caption their movies... YouTube... Hulu... Pretty much anyplace that lets you upload videos. I know FOX captions their current shows if you feel like watching one on their site (I've watched House that way before).

So, dear god, I hope discs don't go away anytime soon. :eek:

Bad news for me, since I barely have enough free space on my PC to receive streaming videos. I once tried to stream a movie from Netflix, and I never got to finish doing so, because it stopped dead cold a good 10 minutes into the film.

A lot of the streaming is done on people's TVs, via gaming consoles, Blu-ray players and yes, computers hooked to TVs. But as you said, it's still a very flawed technology that tends to stop to buffer in the middle of the movie, no matter what device you're using.

Most of Netflix's streaming options aren't even in 480, which is DVD/SDTV broadcast quality! Instead, they look like badly-encoded YouTube videos.

Yup, knew about that... Still not paying $10/month for a service with a limited selection of captioned stuff. This is like when I was a kid back in the 1980s... It wasn't yet a law to have captioning on TV programming, so if you wanted captions on your TV, you had to buy a separate decoder box to hook up to your TV, because back then, they didn't have a built-in decoder chip. I imagine ours was pretty expensive! This is the one we had, circa 1988. (http://farm1.static.flickr.com/112/298277275_6461482522.jpg?v=0)

Think about it... People who rely on captioning still get gypped today. Most movie theaters don't caption their movies... YouTube... Hulu... Pretty much anyplace that lets you upload videos. I know FOX captions their current shows if you feel like watching one on their site (I've watched House that way before).

So, dear god, I hope discs don't go away anytime soon. :eek:

Physical discs aren't going anywhere for a long, long time. And I'm talking decades. And when they finally do go to an all-digital format, they'd be stupid to leave the hearing-impaired community in the dust.