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Netflix Rolls Out Online Delivery

16 Jan, 2007 By: Stephanie Prange

In a much-anticipated move, online DVD rental pioneer Netflix will begin offering downloads.

Today the company introduced a new feature that allows people to watch movies and television series on their personal computers. The company will make the new feature available to its subscribers in a phased roll-out over the next six months.

Subscribers will continue to receive DVDs by mail and will have the additional option of instantly watching about 1,000 movies and TV series on their PCs. The new feature will be included in subscribers' monthly membership plans at no additional cost.

The company said the phased roll-out is “meant to ensure that subscribers have a great initial experience with the feature.&quo;&quo;We named our company Netflix in 1998 because we believed Internet-based movie rental represented the future, first as a means of improving service and selection, and then as a means of movie delivery,” said Reed Hastings, the company's chief executive officer. “While mainstream consumer adoption of online movie watching will take a number of years due to content and technology hurdles, the time is right for Netflix to take the first step.

“Over the coming years we'll expand our selection of films, and we'll work to get to every Internet-connected screen, from cell phones to PCs to plasma screens. The PC screen is the best Internet-connected screen today, so we are starting there.”

Netflix is “specifically focusing on the rental segment of electronic delivery, distinct from the download-to-own market and advertising-supported electronic delivery,” the company reported.

The new immediate viewing feature differs from current services in that it does not require the often lengthy downloading of a large video file, the company reported. The Netflix feature uses real-time playback technology that allows video to be viewed at virtually the same time it is being delivered to a user's computer. Following a one-time, under-60-second installation of a simple browser applet, most subscribers' movie selections will begin playing in their Web browser in as little as 10 to 15 seconds. Movies can be paused and a position bar gives viewers the ability to immediately jump to any point in the movie. The feature requires only Internet connectivity with a minimum of one megabit per second of bandwidth. The more bandwidth a consumer has, the higher quality the video displayed, ranging from the quality of current Netflix previews to DVD quality with a three-megabit-per-second connection.

Selection will expand over time as licensing for electronically delivered movie rentals widens. Studios offering titles include NBC Universal, Sony Pictures, MGM, 20th Century Fox, Paramount Pictures, Warner Bros., New Line Cinema and Lionsgate. In addition, content is being provided by A&E Television Networks, Anime Network, Allumination FilmWorks, BBC Worldwide, Cinema Libre Studios, Egami Media, Film Movement, Hart Sharp Video, The Independent Film Channel, Magnolia Pictures, New Video Group, New Yorker Films, Palm Pictures, Seventh Art, Silvernitrate Entertainment, Starz Digital, ThinkFilm, Video Action Sports, WMG Productions and Wolfe Video, among others.

As with the Netflix DVD catalog, subscribers can browse movies available for immediate viewing by title, genre or star rating. Personalized recommendations, based on an individual's historical preferences, will also appear.

Netflix said it expects to make the new feature available to all Netflix subscribers by the end of June. The hours available for instant watching will vary based on subscribers' monthly plans. For example, subscribers on the entry-level $5.99 plan will have six hours of online movie watching per month and subscribers on Netflix's most popular plan, $17.99 for unlimited DVD rental and three discs out at a time, will have 18 hours of online movie watching per month.

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