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Mike Berkley  //  Product Strategy @ Comcast's Social Technology Group. Formerly CEO of SplashCast Media. This is my personal blog. My writing and opinions do not necessarily reflect those of Comcast.

Oct 11 / 1:19pm

Netflix CEO says DVDs will remain king for 24 months but then streaming will become #1. How does Netflix avoid TiVO's fate?

In this Montley Fool podcast Reed Hastings says that DVDs may lose their number one spot for the company's video distribution in 24 months.  Netflix currently offers a very popular $9 monthly subscription for unlimited streaming online or over-the-top (via TiVO, Roku, etc).

The big questions are:

How does Netflix avoid the same fate as TiVO when going up against the enormously deep-pocketed cable companies? 

While Netflix may have an early lead in the subscription model space, they will ultimately be competing with Comcast's and TimeWarner's TV Everywhere streaming services.  Comcast and TimeWarner are goliaths who will do anything to keep their audience.

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4 comments

Oct 12, 2009
Elia Freedman said...
I'm not certain I agree with your analysis. Now I'm no expert on TV Everywhere, but it strikes me that Netflix has survived just fine along side cable for years (and Blockbuster before that.) In fact, I'd bet most people have both with a different flavor of offering. Maybe the two models merge, maybe they don't, but it strikes me that Comcast's and Time Warner's focus on cable businesses is strikingly different than Netflix's model. (Not to mention the fact that Netflix has positive brand image on its side.) I wouldn't bet on the death of Netflix any time soon.
Oct 12, 2009
Tom Turnbull said...
One distinction to consider: for Tivo to work, a cable or dish is required (i.e., it easier for cable to push its DVR offering). Netflix's lack of dependence on cable infrastructure allows it to offer a true alternative. I agree that Netflix is the little guy in comparison to big cable, but the dynamics here are a bit different.

Comcast trumped Tivo by offering a competitive product (cheaper DVR). Comcast will need to defeat the Netflixes of the world by controlling content.

Oct 12, 2009
Mike Berkley said...
Thx Elia. In 2 yrs Netflix will be competing head-to-head w/ Comcast in Video On Demand streaming products.
Oct 12, 2009
Mike Berkley said...
Tom, great distinction!

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