NETFLIX
Commentary by Michael J. Lee
Executive Editor for Radio Free Entertainment
February 21, 2007
Since their debut nearly a decade ago, corporate pioneer Netflix has revolutionized the home video experience. Their innovative business model of movie rentals by mail has been mimicked by giant competitors like Blockbuster and Wal-Mart, but they have managed to survive and thrive by virtue of their first-rate service, constant improvement, and streamlined operations.
The core Netflix procedure remains the same: subscribers maintain a list of movies they wish to rent via the website, Netflix mails the requested titles out, subscribers keep the DVDs for as long as they like and eventually mail them back in pre-paid envelopes, and the process starts all over again, in perpetuity.
What has changed since the company's fledgling days as a struggling startup, however, is the general improvement in service, with large scale expansion benefitting customers. Netflix now has over 40 distribution centers throughout the U.S., enabling them to ship DVDs to 90% of their subscribers in only one business day. The quick turnaround enables more movie watching in a shorter time, allowing diehard fans to take the greatest advantage of the vast library of over 70,000 titles. Rates have come down, too, with the standard service now priced at $17.99 a month. Other plans are also available, starting at only $4.99 a month.
A major feature that many people do not know about is the ability to watch streaming video from the Netflix website via a proprietary format. Although they are currently not offering downloadable movies that can be burned to disc and watched on a television, this so-called "Watch Now" feature demonstrates the company's readiness to embrace business changes on the horizon. Subscribers are able to watch 1 hour of streaming video per dollar spent monthly. So those choosing the $17.99 plan, for example, are able to watch 18 hours of movies online.
Netflix also sells used DVDs for as low as $5.99 each, all of which carry a quality guarantee.
As always, Netflix offers a free two-week trial for new customers.
Visit Netflix here: www.netflix.com
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