Streaming Video Cannibalizing DVD Rentals

Netflix seems to be one of the few technology companies booming in this recession with profit up 45% in Q4 from last year, and nearly 10 million total subscribers. Netflix CEO Reed Hastings noted that there were millions of subscribers using the Watch Instantly feature, and that Netflix had seen a "substitution effect" among subscribers who do so. "We are seeing early signs of less DVD usage with some subscribers who are also watching instantly as compared to subscribers who only receive DVDs," said Hastings. This could be more bad news for physical media companies like Sony because it shows that people are willing to compromise quality for the convenience of streaming video.

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