Netflix – No More DVDs?

Speculation ran wild this week that the online rental giant, Netflix, would soon become focused on their streaming service rather than their DVD service.  It appears that the speculation is, in truth, a reality.

Netflix has been solely responsible for the death of such retail stores like Movie Gallery, Hollywood Video, and the soon-to-be no-more Blockbuster.  The irony there is not lost, as Blockbuster positioned itself during the 1990′s by eliminating ‘mom’n'pop’ shops throughout the Midwest.  The giant chain was able to swoop into smaller markets and eliminate the need for privately owned rental shops with low prices and large selections of all the hottest movies.

Netflix mirrored this move back in 1999, and as the company grew it took advantage of being the only online rental service.  It didn’t take long for customers to realize that not only was the selection online larger than anything found in Blockbuster, but it didn’t require one to leave the house.  Sure it took a few extra days to get the disc, but those willing to plan ahead found the practice to be a God-send.

In 2008, Netflix began offering an online streaming service to its customers as an additional option along with the DVD rentals.  The streaming service was initially only compatible with Internet Explorer, but after a large outcry from the customers, Netflix quickly offered more reasonable solutions to their Watch Instantly supply.  The big move came once the company signed an exclusivity deal with gaming giant Microsoft, to add the ability to stream instantly over the Xbox Live online service.  This eliminated watching the service on laptop or a computer, and put the streaming capabilities directly into the living room

Needless to say, the move was a giant success for both parties.  Due to the exclusivity rights, Netflix was able to offer streaming video playback to both Sony’s Playstation 3 and Nintendo’s Wii, however these options required a separate disc to be used as the content was legally not allowed to be accessed via a menu screen (as it would directly compete with Microsoft’s position).

Last week, the exclusivity agreement ran its course and both the PS3 and the Wii were immediately given access to the Watch Instant queues thanks to a swift menu change.  In conjunction with the now easily accessible service being available for all systems, it should come as no surprise that Netflix quickly addressed the rumors regarding their position on streaming.

The company is beginning a small rollout which will give some current users the option to have a ‘streaming only’ account.  Currently, the cheapest option for U.S. residents requires a monthly payment of $9.99, and offers the customer the ability to have one DVD out at a time.  This new streaming option is being offered for $7.99 per month, minus the DVD service.

This promotion has been running in Canada for some time now (Canada is a streaming-only service for Netflix), and moving the cheaper plan to U.S. residents will certainly benefit both Netflix and their customers.

Netflix’s CEO Reed Hastings claimed last week that the company is ‘primarily a streaming company that also offers DVDs-by-mail’, which served as clear indication to the company’s customers exactly where their business models currently stand.  And it’s a good place for them, seeing as the streaming service is certainly one of a kind.

These next few months will certainly be interesting for the company, and for its users.  The shift to a streaming only service will provide clarity for Netflix and for their customers.  Giving users the choice, especially when it comes to tiered pricing, is simply never a bad thing.

Those looking forward to dropping the pesky DVDs and switching over to a streaming service option will definitely want to keep an eye on their Netflix account settings over the next few weeks.  Plans are to start rolling out Monday, although nothing official has been stated by Netflix regarding the plan changes, other than that they are ramping up their efforts based on the success with the Canada streaming only options.

On a side note, I’ve personally had the same Netflix DVD sitting on my entertainment stand since March, with no real intentions of sending it back.  Their streaming service is absolutely fantastic and I personally can’t wait for the option of saving $2 per month.  And, of course, to not have that DVD sitting in my living room any longer.

Originally written by Matt Wehner on GotchaMovies.com