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Netflix Instant On, Instant Hit?
October 10, 2007

Netflix sees great potential in its relatively new feature that allows subscribers to watch a movie title instantly on their Windows-based computer.

Since rolling out the service in January, the company had recorded 10 million viewings of movies by Aug. 22, with viewers increasing exponentially over the summer.

In some cases, viewers of Instant On outnumbered traditional subscribers during the early weeks of a title's release, said Chief Content Officer Ted Sarandos.

However, Netflix has not said how it plans to use Instant On in the future.

It can only legally distribute about 4,000 of its 85,000 DVD titles through on demand. Users cannot save movies onto their hard drives nor does the service does not work for Macintosh.

Ten million viewings, while impressive, is a proverbial drop in the bucket compared to the 1.6 million DVDs Netflix mails out each weekday.

Instant viewing works by "billing" Netflix subscribers per hour, awarding one hour of viewing for every dollar a customer pays in monthly fees. A monthly subscriber, who pays $16.99 a month for 3 DVDs at a time, is also awarded 17 hours of free online content.

While enthusiastic about the feature, Sarandos said it is "way too early" to make any blanket predictions on what that means to the company and industry.

"Online video itself is kind of in its infancy," Sarandos said.

The feature is a step in the brave new world of instant gratification and electronic distribution that Netflix has always intended on tapping.

"Right now we're kind in the very early minutes in the second act of a 3-act play," company spokesman Steve Swasey said back in September when it announced ten million viewers. "The very early part of the hybrid act: which is DVD and watching online, whatever form that takes. ... By the 3rd Act it will be all online. DVDs will be obsolete, like VHS is today."

Posted by Ned Randolph on October 10, 2007 | Comments (0)