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Comment by bryanh | Hacker News Reader

In my opinion, this is definitely the obvious and correct move. It isn't a surprise that Netflix wanted to head towards a stream only business model, but this makes it crystal clear that Netflix is (at the moment) a premium streaming video company. I mean look at them, thats all they do now!

The still face some big hurdles with all their streaming content deals, and the outcome will likely be what makes or breaks the Netflix we all know and love. Premium content providers (HBO, Starz, and now AMC, etc...) will always hold the upper hand here, and many already have streaming products in place. If not, its rather trivial to create nowadays.

My prediction: Netflix becomes an original content powerhouse that harnesses the sort of democratic whimsey of the web. "House of Cards" is their toe in the water. I really see no other direction that is feasible with content providers fragmenting into their space and hoarding their popular original content.

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"this makes it crystal clear that Netflix is a premium streaming video company. I mean look at them, thats all they do now!"

Yeah, well...now they're providing a commodity service. Renting DVDs through the mail has/had a huge infrastructure advantage for the established player. Streaming video over the internet? There are dozens of sites that do it well. The technical advantage is far less sustainable, because it isn't nearly as difficult.

Once you're running a streaming-video business, the only differentiating advantage is content -- and you're in a weak position to negotiate for that content. Whereas before, the studios needed Netflix to distribute their content to consumers, the internet has turned the tables.

Delivering streaming media content has some infrastructure costs as well. Bandwidth is not free (it will get worse if Net-neutrality dies) and one also needs to have a CDN to effectively deliver content to different geographies.

Netflix has one thing that most streaming video sites don't, and that's massive market penetration. In my living room, I have 5 devices capable of Netflix streaming, as well as every mobile device I own.

Amazon is probably second with their offering, and even then I don't own any devices that can stream Prime Instant Video (my TiVo can download from Amazon, but isn't compatible with Prime's streaming). Any Netflix competitor has a huge hurdle to overcome to be as successful as they've been.

They first obtained that advantage through their infrastructure investment in DVDs though, not through steaming. Any Netflix competitor now has a much smaller hurdle to overcome to be as successful as they've been. From the customer's viewpoint they went from having a relationship with a single company that had two offerings to a relationship with a company with a single offering that is somewhat lacking.

If I were the new CEO of Quixster or Kwikstr or whatever the hell it is, I would immediately start looking around at who I can partner with to get streaming content. Actually, isn't Quixtar the name of a MLM scheme?

This move makes no sense. Seems like Wall St. pandering garbage.

> Actually, isn't Quixtar the name of a MLM scheme?

Yes, Quixtar is Amway.

"Netflix has one thing that most streaming video sites don't, and that's massive market penetration. In my living room, I have 5 devices capable of Netflix streaming, as well as every mobile device I own."

And those devices are electronics, which have the shelf life of dead fish. You have to stay relevant to make it into the next generation of products. Nobody is pre-bundling a service that a) has a small subscriber base or b) doesn't have good content.

Moreover, many devices (like my own television) let you trivially download apps from any provider. I got amazon streaming on my television on the day it was announced. Being installed on a device isn't a competitive advantage when anyone can do it.

Interesting prediction. It would make a lot of sense to produce/fund more original content. It's definitely the direction the streaming business has to follow. If cool and original stuff is on Netflix only, it will be good for them and other original content producers may be more inclined to be there.

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