| 26 January 2011
THE FUTURE OF HOME VIDEO First we have Leo Grin's assessment that streaming is Hollywood's fitful future:
Once physical DVDs become a non-issue, studios will buckle one by one and offer their new releases to the major streaming companies, just as the record companies all eventually conceded to Apple’s 99 cents per individual song plan. The day new movies are able to be streamed directly to your TV via Netflix on the same day they are available at Redbox kiosks, that’s the end of that brick-and-mortar (metal-and-plastic?) business model.
Grin's betting on Netflix as the king of that digital world, but Investor's Business Daily reminds us no model is guaranteed success and that today's Netflix earnings represent a crucial moment for the presumptive leader.
Investors have been big believers. Netflix’s Oct. 20 earnings report came up a penny short. Shares still jumped 13% the next day. Shares also shot up a month later as Netflix announced a streaming-only service.
But some on Wall Street worry that Netflix may be overhyped. The $7.99 streaming-only subscription price will attract lots of customers, but Netflix is paying more for content. It may also ultimately face higher fees from ISPs to stream movies and TV shows.
Netflix is blazing a trail, but the road ahead remains rocky.
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