I have written several posts about the interesting space that Netflix fills between physical stores that cannot offer a sizeable library or customization features and digital delivery with its bandwith issues and pricing problems. In my last Netflix post I noted that:

“… Netflix never saw delivery by the mails as a permanent solution to the “watching movies at home and on the go” industry. As I mentioned before, their relatively luddite service was possible because Blockbuster sucked and digital delivery hadn’t (and even with Apple’s entrance, still has not) been perfected. Like Apple, Amazon, Walmart, and a host of other companies, Netflix always planned to offer a digital service when it becomes feasible.

Well, Netflix launched its Media Center today to select customers and will be rolling it out to its entire customer base over the next six months. The Media Center will digitally deliver movies to users in a matter of seconds. According to Netflix:

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 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. In all, the instant watching 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.

Download time is the major bottleneck to adopting digital delivery. If Netflix can truly solve this, they will have a huge leg up in the race. Another major problem over time, of course, will be whether users can seamlessly watch movies on their televisions through this service. I’ll watch movies on my computer, but the average citizen (read my parents) will not.

Netflix is including the service at no additional charge. Customers electing the most popular plan, $17.99 for unlimited DVD rental and three discs out at a time, will have access to up to 18 hours of online movie watching per month. This is preferrable to the a la carte pricing offered by the able companies Movie On Demand services and Apples downloading features.

Netflix seems to have its head screwed on straight here. Here’s hoping Netflix’s latest offering meets our lofty expectations.

This entry was posted on Tuesday, January 16th, 2007 at 12:12 pm and is filed under Movies, Innovation, Netflix. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.