Netflix says it will kill the DVD

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Looks like Netflix agrees with Apple.. DVD's are a dying breed!

Netflix expects video streaming to drown out DVDs

By MICHAEL LIEDTKE, AP Technology Writer
44 mins ago

SAN FRANCISCO – Netflix is preparing for the day when getting DVDs by mail is as old-fashioned as going to the video store.

It's hoping to wean people from DVDs with a cheap plan that offers movies and old TV episodes exclusively through online streaming. It will cost $8 per month, matching a recent price cut by rival Hulu.

So should you get rid of your DVD player? Maybe not yet. But it might be a good time to make sure your television can connect to the Internet.

Most analysts expect the streaming-only plan to appeal to younger subscribers, especially those who have signed up for Netflix in the past couple years as the service became available through video game consoles. To them, the new price will probably seem like a bargain: Netflix had been charging $9 per month for the lowest-priced plan that included unlimited video streaming.

At the same time, Netflix is making it more expensive to receive those familiar red envelopes in the mail. The company is trying to offset its postage expenses and bring more money to improve the quality of its Internet streaming library.
The monthly rates on Netflix's three most popular rental plans will rise $1 to $3, depending on the plan. They will be $10, $15 and $20, depending on how many DVDs the subscriber is allowed to have out at once.

The changes announced Monday are Netflix's latest step to ensure it doesn't repeat the same mistakes of Blockbuster Inc., a once-ubiquitous video store chain that didn't adapt quickly enough to technological change and went bankrupt.

Netflix CEO Reed Hastings says he always envisioned movies being piped through high-speed connections — even back in 1999, when his company began mailing out DVD rentals requested on the Web. That expectation is why Hastings says he chose the name Netflix.

But the transition has come more quickly than Hastings had thought. When Netflix added Internet streaming as a free supplement to its DVD plans in early 2007, Hastings assured analysts DVDs would remain the primary way Netflix's subscribers watched movies for at least the next decade.

That changed as it became possible to stream Netflix's service through game consoles, Blu-ray players and set-top boxes that are easy to hook up to TVs. Netflix also is streaming on more mobile devices, including the iPad.

Now, Netflix says its 17 million subscribers watch more hours of Internet-streamed video each month than they do on the DVDs they get through the mail.
Even so, Netflix remains a major buyer of DVDs because most of its subscribers still want the discs. That way they can watch the latest movie releases that aren't available for streaming.

The company doesn't specify how many DVDs it ships out each month, but Wedbush Securities analyst Michael Pachter estimates the average Netflix subscriber still gets four to five DVDs per month. That's down from an average of five to six a year ago.

In a way, the move to streaming mirrors what's happening in the newspaper industry. While tens of millions still subscribe to print editions, that audience is getting older and shrinking. Younger readers get their news on computers and other digital devices.

Pachter expects DVDs to be around for at least 20 more years. Netflix itself has projected that its DVD-by-mail shipments will peak in 2012 and then progressively decline until they become infinitesimal around 2030.

Meanwhile, subscribers are expected to watch progressively more hours through the Internet. The convenience and perceived value of streaming is the main reason Netflix's total subscribers have nearly doubled in the past two years.
Netflix Inc. is getting more popular on Wall Street, too. Its stock is worth nine times what it was two years ago and rose to another record high Monday. The shares gained $15.28, or nearly 9 percent, to close at $188.32.

Investors love streaming because it should help Netflix make more money. The simple math: The more people stream, the less the company will have to devote to buying DVDs and getting them to customers. This year, for instance, Netflix is expected to spend more than $700 million on postage and handling.

And streaming will make it easier for Netflix to expand into other countries without having to invest in the dozens of DVD distribution centers it has set up in the U.S. By some estimates, more than 500 million households worldwide are equipped with high-speed Internet connections, and that number is expected to grow in the years to come.

As Netflix's postage and DVD expenses decline, the company is pouring more money into licensing movies and TV shows for its Internet streaming library.
The streaming catalog is still mostly made up of older movies and TV shows at least a season or two behind. Netflix is trying to freshen that lineup. During the summer, it cut a series of deals that will narrow the time between when movies reach the theater screens and Netflix's streaming library.

All told, Netflix's commitments for streaming rights totaled $1.1 billion as of Sept. 30, up from $115 million at the end of last year.

No matter how much Netflix invests, the streaming library probably still won't have as much new material as pay TV and DVDs offer. That is largely because the studios still think they can pad their profits by selling DVDs. As part of that goal, several major studios have persuaded Netflix to refrain from renting many popular DVDs during the first 28 days the discs are on sale in stores.

Sales and rentals of DVDs and Blu-ray discs fell 7 percent to $10.9 billion in the first nine months of this year compared to last year, according to The Digital Entertainment Group, an industry body. Meanwhile, Internet downloads rose 37 percent to $432 million.

Netflix's popularity is also turning it into a threat to pay-TV, including long-established premium cable channels, such as HBO and Starz. Time Warner Inc.'s HBO so far has refused to license classic TV shows such as "The Sopranos" and "Deadwood" to Netflix.

The total number of cable and satellite pay-TV subscribers in the U.S. fell for the first time ever in this year's second quarter, according to analyst estimates. Cable companies attributed the decline to seasonal and economic weakness rather than people cutting the cord in favor of Internet video, but the total subscriber figure declined again in the third quarter.

Netflix's streaming ambitions could suffer a setback if the cable and telecommunications companies that provide high-speed Internet service attempt to impose surcharges on heavy users of Web video.

Streaming through Netflix accounts for more than 20 percent of peak traffic to Internet users in the U.S., according to a recent report by Sandvine Inc.
Attempts by Internet service providers to apply extra fees on customers who use a lot of data have so far been quashed by consumer backlashes, and Hastings is betting extra fees won't become a hurdle for Internet video. But that doesn't mean the cost of high-speed Internet service won't rise if people get hooked on video streaming.
 
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Shit looks sweet now, but I'm telling you cats... shit ain't sweet. ISPs are going to move to a tiered/metered type billing format and down loading HD DVDs is going to cause people to bust through usage limits. You may save money in one area, but spend a lot more in another.
 
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didn't read the article yet..but i just signed up for netflix and most of the titles i search for is only available on dvd..but i guess this article is saying that they're going to change that..

Whats yall take on hulu..is it going to be better than netflix??
 
Ever since they did streaming I stopped with the DVDs.

I've had the training day dvd since November 9th of LAST YEAR lol.
 
shit, i make a good portion of side money on dvds.

i dont know why anyone thinks that they will be obsolete anytime soon.
 
They need faster speeds, alot of connections can't even stream properly yet but netflix is right, who the hell uses dvd these days? download or stream.
 
aint bought a dvd since god knows when ...stopped renting movies in my early 20s.....but not a huge fan of streaming media either
 
Yup, I'm going to do the same.. its only 7.99/month!

What's stupid is that the cable companies could have X'ed out Netflix YEARS ago by just lowering their prices!!!

They ALREADY had everything in place but instead wanted to gouge everyone on movie prices!!!

Talk about missed opportunity!
 
Im just not feeling the selection of streamable movies. Besides the TV series Im not really into watching some old ass movies :smh:.

I just got an email from them telling me my plan was going up to $14.99 too :hmm:
 
aint bought a dvd since god knows when ...stopped renting movies in my early 20s.....but not a huge fan of streaming media either
 
Shit looks sweet now, but I'm telling you cats... shit ain't sweet. ISPs are going to move to a tired type billings format and down loading HD DVDs is going to cause people to bust through usage limits. You may save money in one area, but spend a lot more in another.

:confused:

What are you talking about?
 
I've had Netflix for a while now I have yet to order a DVD. I just changed my plan to stream only.

Just read an article that says Netflix got into an agreement with the movie studios where Netflix has to wait a month after a new release movie to make it available for ordering.
 
I've had Netflix for a while now I have yet to order a DVD. I just changed my plan to stream only.

Just read an article that says Netflix got into an agreement with the movie studios where Netflix has to wait a month after a new release movie to make it available for ordering.

I still have a healthy TV package with my cable provider. I know maybe at some point in the future, I might go streaming only with my internet. Netflix is cool but, they don't have enough titles for me just yet.
 
The bad thing is there aren't any good streaming movies on Netflix I seen all them joints due to my constant video downloading.Plus I got an email today from them saying they was upping the price on my package.
 
I still have a healthy TV package with my cable provider. I know maybe at some point in the future, I might go streaming only with my internet. Netflix is cool but, they don't have enough titles for me just yet.

Not having enough titles for streaming has been a thorn in everyone's side. Especially recent movies (movies released in the last year). We are all waiting for the day Netflix finally releases all of their titles online. Hopefully this new plan is an indication that it will happen soon.
 
I like this plan. I may jump on board soon for 8 a month. I am going to wait until they get more streaming movies and shows tho.
 
Shit looks sweet now, but I'm telling you cats... shit ain't sweet. ISPs are going to move to a tired type billings format and down loading HD DVDs is going to cause people to bust through usage limits. You may save money in one area, but spend a lot more in another.

Tired = depleted of strength or energy; "tired mothers with crying babies"; "too tired to eat"

Tiered= having or arranged in tiers; "a tiered mound

I am just saying. :eek:
 
didn't read the article yet..but i just signed up for netflix and most of the titles i search for is only available on dvd..but i guess this article is saying that they're going to change that..


Ya...once they move most of their library over to streaming I will sign up w/o hesistation
 
ya...once they move most of their library over to streaming i will sign up w/o hesistation

yeah they set me up..i saw a dl on the ps3 so i said why not..but i thought all movies would be stream and dvd..it's all good though cuz they know people want them joints to be streamed..so i'm sure they eventually do that..that would be too dope if/when they do...
 
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