I’m an avid user of Blockbuster’s DVD-by-mail rental program, Total Access. I chose this service over that of competitor Netflix because I like the option of going into the store and exchanging my mailed DVD for another—free of charge—while the next selection in my queue is being shipped. Plus, the local Blockbuster is only four blocks from my apartment.
Ready to compete with the bricks-and-mortar operator, and attract shoppers like me, Netflix started offering its “Watch Instantly” program, which allows its 7 million subscribers to watch movies online—again, at no additional charge—instead of waiting for them to be delivered through the mail. The company is so committed to the program that it allocated about $40 million to develop the streaming service.
Programming must be watched on a computer, unless the viewer knows how to link a high-speed Internet connection into a TV monitor—though not all computers are compatible. Watch Instantly may have been key to luring and retaining new members since its debut a year ago, but I find cozying up to a computer a bit unsatisfactory. I still like to watch my movies on a television. Call me old-fashioned.
But it seems I’m not alone. Online movie downloads may be working for some companies, specifically Apple’s iTunes model, but it has yet to become a household concept.
For example, on Dec. 21, Wal-Mart posted a message on its Web site announcing that it had pulled the plug on its movie-download service. The news went unnoticed by both the industry and many customers for almost a week before the media found out.
Other video-download services, including CinemaNow and Vongo, have also struggled.
In an effort to avoid this downhill curve, Netflix recently upped the ante once again. Last month, the company announced its plans to deliver movies and other programming directly to consumers’ televisions later this year. By linking a set-top box with a high-speed Internet connection, subscribers will have full access to Netflix’s Watch Instantly library.
At presstime, the price of the box—which will be created by LG Electronics Inc.—was not available. However, comparable options made by Apple and Vudu Inc. cost between $299 and $399.
Depending on which subscription plan they have, Netflix customers will be able to watch five to 48 hours of programmi