Tuesday, January 16, 2007

netflix vs. blockbuster...latest round

just the tip of the iceberg, but today's Netflix announcement that subscribers will over a phased roll-out be able to stream movies and TV shows via their account is a nice counter-move to blockbuster's recent customer acquisition onslaught (i think i saw the blockbuster vs. netflix comparison ad 50 times in last 2 weeks)

details are a bit sketchy on the economics (techcrunch says netflix is banking $40m to underwrite this), but given the offering is free to subscribers of netflix's dvd subscription service it's clear this is designed to be quite an acquisition tool. if the $40m number is accurate, should be pretty easy to calculate after a year whether the feature draws in new subs and/or helps manage churn of existing user base.

ultimately, what is compelling story here is fact that this represents yet another example where content programmers win by focusing on non-exclusive distribution in digital realm.

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