Streaming Wars Heating Up


It seems a day doesn’t go by without the announcement of a new music or video streaming service. Of course, many of them never get off the ground, but new developments among the heavy hitters are about to make things interesting.

Netflix has returned to profit—albeit at a lower figure than last year; however, this can be partially attributed to expenses it has incurred expanding into non-US markets and creating its own Content Delivery Network (CDN). No doubt, the loss of subscribers after its recent price hike is still hurting the bottom line, but subscribers are growing. Besides alienation a large percentage of its customers, Netflix now faces several real and present dangers: RedBox, HuluPlus and Amazon.

RedBox has begun alpha testing of its RedBox Instant streaming service with its partner, Verizon. Partnering with Verizon may help in the short term, but will cap growth unless subscription is extended to the general population.

Two weeks ago, the Amazon Instant Video app was released on the iTunes App Store. With thousands of titles available from Prime Instant Video at no additional cost with an Amazon Prime membership, Amazon’s instant video service is gaining ground rapidly. Recent exclusive content deals (The fringe and West Wing) will also hurt Netflix who seem to be plagued by stale content.

Last, but by no means least, HuluPlus is now available on AppleTV. One day Apple will wake up and realize the AppleTV could be as successful as the iPod and iPhone. Last quarter’s sales topped out at 1.4m and the current installed based is now estimated at about 6.3m. That’s a lot of potential HuluPlus subscribers. (Since HuluPlus appeared on the AppleTV, I signed up. Prior to this, I never found what I consider to be a usable interface on my many streaming-capable devices.)

I predict stormy waters ahead for Netflix; better dig out the lifejackets!



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