Oct 22

Netflix Officially A Streaming Video Company With DVDs On the Side

Posted in: Apple, apple tv, Home Audio and Video, netflix, streaming, Television, Today's Chili, watch instantly

While everyone was focused on Apple ditching software discs with its forthcoming App Store for Mac, Netflix CEO Reed Hastings was busy digging a grave for optical media. Steve Jobs just threw a shovel full of dirt on top.

“Three years ago we were a DVD-by-mail company that offered some streaming,” Hastings told reporters and investors Wednesday. “We are now a streaming company, which also offers DVD-by-mail.”

Software discs haven’t actually mattered for a long time now. The real innovation of Apple’s App Store for software sales isn’t online distribution. It isn’t even creating a central marketplace. It’s putting that marketplace in a client right on the desktop. For Apple, it’s having that client not be iTunes, an already overstuffed monster well overdue for dismemberment and redistribution.

The real front in the battle over optical media remains video — with Netflix, Apple, Hulu, TiVo, Xbox Live and others on the side of the cloud, and Blu-ray, 3D televisions and most game consoles on the side of the disc. Microsoft is the only company that is nearly everywhere pursuing both approaches equally all at once.

Netflix has been able to become a streaming video company by partnering with nearly everyone who makes a net-connected box or screen, from TVs and set-top boxes to tablets and smartphones.

Reportedly, Netflix accounts for more than 20 percent of US downstream internet traffic in peak times, with the heaviest traffic falling between 8 p.m. and 10 p.m — traditional television prime time.

That’s only likely to rise as Netflix streaming becomes available on a greater number of less expensive devices attached to television sets. And it’s a good reminder that while software discs vs downloads is a battle that’s virtually over, streaming media over the internet vs streaming media over cable or broadcast has in some sense only just truly begun.

In Canada, Netflix already offers a streaming-only video plan, with regular or Blu-ray DVDs as an extra, optional feature. Its CEO’s comments suggest the US will likely be next.

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