The Washington Post has a good article today about Netflix (free subscription may be required) and the transition it needs to make from DVDs by mail to online digital delivery.
“It’s like a three-act play, and we’re in the opening minutes of the second act,” says Steve Swasey, vice president of corporate communications at movie-rental Web site Netflix, as he gives a tour of the company’s Rockville processing center.
Act 1, as far as the company is concerned, was getting people used to renting DVDs over the Internet. Act 3 is “no more DVDs and everything is online.”
Does joining when there are 8 million Netflix customers make me a late adopter? We finally signed up for the two-week free trial yesterday; I love the idea of no late fees and unlimited rentals, and that it offers a Long Tail of selections. For example, in our local video store it’s easy to find the Reloaded and Revolutions sequels to The Matrix, but the original is hard to find. And my wife, Lisa, is looking forward to watching lots of documentaries. We’re looking forward to having access to this huge back catalog.
One initial complaint: the new online viewing feature is for Windows only, and only for Internet Explorer 6 and newer. It’s one thing for corporate IT departments to mandate Windows-only, but a company that wants to sell to the home market (like Netflix) will be missing market share with such an approach. In the last quarter, the Mac’s market share grew to 8.1 percent of the U.S. market. Given the Windows dominance of the corporate IT world, that means the Apple share is even stronger among home users.
Second complaint: I tried to view videos on my daughter’s Windows XP machine in IE 7, so I downloaded and installed the Netflix client software (after downloading IE 7 because it wasn’t compatible with Firefox). Then when I tried to watch season 1 of The Office, it just prompted me again to install the software. Never got to watch it.
I’m sure the DVDs will be great when they arrive Tuesday. Obviously, as Mike Musgrove’s article describes, Netflix has the system for delivering DVDs well orchestrated. But support for Macintosh and browsers other than Internet Explorer will be a key to Netflix successfully making the transition to digital delivery.
Apple’s iTunes obviously serves both Macintosh and Windows. The TV networks, in their ad-supported streaming of their primetime shows, support both platforms and don’t limit to one particular browser. Netflix doesn’t seem to have a true competitor in the DVD-delivery business, but it will have serious competitors in digital delivery.
Microsoft now has less than 65 percent of the browser market. If Netflix continues to ignore more than a third of the potential users of its movie streaming service, it will not be successful in its DVD-to-Digital transition.