In a recent article, we’re told that Netflix is preparing for the day when DVD and Blu-ray rentals will be replaced by video streaming; this could be a look at the future and how we entertain ourselves in our home. In fact, Netflix believes that the DVD and Blu-ray rental business will begin its decline in 2013. It is placing its eggs in the video streaming of movies basket, which it believes will be the future of movie rentals.
The article goes on to state that:
According to the Netflix Business Opportunity slideshow, the company sees streaming as a “huge potential market,” pointing to the 100 million households that have pay-TV subscriptions in the U.S. Netflix had 14 million subscribers by the end of the first quarter, a number it expects will rise to 17 million by the end of the year. And it believes that as both it and the Internet improve, it can get boost that figure even more.
“To have profitable growth in such a huge market, you find a segment in which you can gain and maintain leadership,” the slideshow says. “Netflix [sic] segment is consumer-paid streaming of movies and TV shows.”
With greater adoption of streaming video, Netflix says it can put more money toward building the catalog of content available through its Watch Instantly service. Its cost of goods sold in 2009 was $1.4 billion, of which more than half was spent on postage and handling. But as the company’s DVD-by-mail business peaks — which it expects to happen around 2013 — Netflix will be able to spend more money on licensing content. By 2020, if it can continue to aggressively grow its subscriber base, it expects to be one of the world’s largest licensors of movies and TV shows.
I can see how this could happen. I have been with Netflix for about five years and enjoy the service it provides. However, there have been times that I have received damaged DVDs that have not played correctly. Though Netflix has been quick to replace the broken disc, the fact remains that I had to wait for a replacement to arrive. With streaming you do not have this problem. I stream from my laptop to my plasma TV without any problems. The only issue is that the streamed films are not 1080P as of yet.
What do you think? Will streaming replace DVD and Blu-ray disks?