Netflix Goes Beyond DVD Rentals with High Quality Video on Demand - Watch Instantly
Written: Jun 24 '07 (Updated Sep 09 '07)
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Netflix DVD Rentals is one of the great Web success stories, a new business model that was made possible by the internet. Netflix earned $50MM in profits last year, and currently generates over a billion dollars in annual revenue from almost 7 million subscribers, a number which Netflix expects to more than double in the next 5 years. To bring in more customers/revenue, Netflix plans to not only grow and improve their DVD rental business, but also expand their new video on demand service, Watch Now (now called Watch Instantly 8/2007). I recently received a offer to try Netflix, including their new Watch Now service, for 30 days, and decided to try it out. Netflix started rolling out (enabling) Watch Now in January, and news reports indicate it should now be enabled for most members as I write this in June '07.
Netflix has set the standard for the "DVD mail rental" business, and my experience with Netflix confirms what most others have reported, that the Netflix service is terrific.
I'd give promising the Netflix Watch Now video on demand service a mixed grade. I (and most broadband users) found the video quality to be surprising good, "near DVD quality". Viewing movies from the Netflix Watch Now library is very easy, and there is no extra charge for the Watch Now service to existing customers. However, the selection is currently limited to about 3000 titles. There are a lot of good titles in the Watch Now library, and while its a great addition for Netflix, the library is far too small and growing too slowly to replace the DVD rental business any time soon.
Signing up
Signing up requires creating an account and user name, and providing shipping and billing address, and credit card number. You’ll also have to choose which rental plan you want to try, from the $5/month for 2 DVD’s/ month to the $48/month 8 DVD’s at a time plan. I chose the popular $17 “rent up to 3 DVD’s at a time” plan, which now also includes 17 hours of streaming movies each month. After signing up, I was able to start adding DVD’s to my queue, and received my first three DVD’s two business days after signing up. I was also immediately able to start viewing video’s in the Netflix Watch Now library, the real reason I chose to sign up.
Getting your DVD’s from Netflix
"Borrowing" DVD's from Netflix means first adding the DVD's you want to see to your Netflix queue. Your queue is a list of movies you want to see, that is maintained on on the Netflix website and prioritized by you. The queue is normally only seen by the individual member and Netflix. However, you can choose to invite other specific members see your queue.
Netflix’ queueing system is well known, being the subject patents, lawsuits and countersuits – google “Netflix sues Blockbuster” to see more on the legal issues. You search for movies, then click on the Add button to add the DVD to the bottom of your queue. The queue is how you let Netflix know which DVD's you’d like to have sent to your home next. Most users keep at least 25 movies in their queue, tyically a few weeks to a few months worth of DVD's. Netflix uses this queue to determine which DVD's to send to members, trying to keep from 1 to 8 DVD's in members hands or in transit, depending on which plan that member has signed up for.
The Netflix queue is easy to use. Users can easily re-rank movies. Netflix also provides useful data on each movie in the queue, if its part of a boxed set, how its rated by other Netflix members, availability, format (DVD, HD-DVD, Blu-ray), genre, and MPAA rating. DVD sets (like the season set of a TV series) are added to your queue as a group, though you can break them up once they are added to the queue. I often break up sets in my queue since I and other members of my family are alternating selections in the queue.
Currently we have 30 DVD’s in the queue, and all are available NOW, according to Netflix. The DVD’s in our queue are TV shows (The Practice, Streets of San Francisco, Star Trek Enterprise), and a few movies (The Babe, The Searchers, Eight Men Out, Spy Game, etc). Two of the movies are HD-DVD’s. If I had chosen movies released in the past week or two, I’d might see the availability listed as short wait or something longer. However, I added the TV show The Practice to my queue a few days before its release on DVD, and received the first DVD only a couple days after the release date. In general, unless you’re looking for something out of print, the availability of movies on Netflix is very good. (I tried to get one out of print DVD, the made for TV reunion movie Homicide: Life on the Streets , but Netflix tells me it is unavailable.)
Netflix sends out DVD’s based on availability and how they’re ranked in your queue. They are delivered in a thin 6 X 8” envelope, which should fit in almost all mailboxes. To open the envelope, you remove the cover sheet which has your address. The remaining part is addressed to Netflix and postage paid, and is used to return the DVD. (There’s a link at the end of this review that shows how the envelop has evolved since Netflix started.) As soon as Netflix receives a returned DVD, they send out a new one from your queue.
In my first month with Netflix, we received 18 DVD’s. Each was delivered from my queue as expected. We send DVD’s back a day or two after receiving them, and receive a replacement 2 or 3 days after sending movies in. Netflix sends a notification email as each DVD is received and sent out. Netflix has a distribution center in my city (one of 44 in the US), which means they almost always receive DVD’s the day after I put them in my mailbox. Netflix claims 90% of their customers are close enough to distribution centers to receive DVD’s in one day. About 80% of the DVD’s I’ve received come from the distribution center in my city, but the rest come from further away, which adds a day or two to the delivery time.
Watch Now at Netflix
The real reason I signed up with Netflix was to try their streaming video service, which is based on Microsoft’s impressive Silverlight technology. The Netflix video on demand model is different from others I’ve seen. Netflix allows users to watch one hour of video for ever dollar they pay in monthly fees. Since I signed up for the $17./month 3 DVD option, I can watch 17 hours of streaming video each month. If you sign up for the $5/month plan, you get to watch 5 hours of video each month. Once you reach 5 hours, you can finish watching what you’ve started, but no more till the next month.
To view the streaming videos, you’ll need a PC with a 1.5 Ghz cpu running Windows XP or Vista (both work well for me), Internet Explorer 6 or later, Windows Media Player 10, and a broadband internet connection (1.5mbps recommended). You’ll view videos using the Netflix Movie Viewer, a video player that you'll download once and run as an Internet Explorer add-on. The Netflix Movie Viewer provides only basic video playback controls, pause, a navigation bar, a volume control, and a button that converts viewing to full screen. Compared to other video players, the Netflix Movie Viewer provides only the most basic features, but covers the basics fairly well, except that the “seek” bar isn’t very accurate, its hard to jump to a specific spot in a video, say if you want to jump past opening credits.
The Netflix Watch Now Library includes 3000 movies and TV shows, tripled since their January roll out. At first glance, that sounds like a lot, but it is a small fraction of the Netflix library of 80,000 DVD’s, and I found it a little disappointing. There are quite a few good titles, though, enough to be of some interest to most viewers. The current list of most popular titles include Seasons 1 and 2 of the popular televison show The Office, Season 1 and 2 of Dead Like Me (most, but not all episodes), several seasons of Law and Order SVU, Sum of All Fears, THX 1138, Enron: The Smartest Guys in the Room, Zoolander, and The Matrix. The library includes episodes of Red Dwarf, The Dick Van Dyke Show, Dr Who, and both seasons J. Michael’s Straczynski’s Jeremiah (one of which was never released on DVD). There’s also a lot of exercise and “how to” videos, documentaries, and classics like A Clockwork Orange, The Dirty Dozen, Harvey and Casablanca.
If you have a good broadband connection, you’ll be very pleased with the quality of the Netflix videos. Netflix provides three levels of streaming video quality, determined solely by the quality of your internet connection:
High 1.6 to 2.2 Mbps
Good 1.0 Mbps
Basic 500 Kbps
While the bit rate for High quality video is a little below standard DVD’s (3-7Mbps), the displayed videos appear to be very close to DVD quality. My internet connection is very good (Cox cable), 2-3 times faster than what I’d need for Netflix’ high quality video setting. I’ve watched several Netflix videos on my Vizio 50” plasma HDTV, and find the quality to be very good, better than basic cable, and very close to the quality of standard DVD’s. The audio quality is also very good, you don’t get the feeling that its “compressed”.
Viewing the Netflix movies works a lot like viewing standard DVD’s. Clicking on the “play” button on any of the shows in the Netflix library launches the Netflix Movie viewer in an Internet Exploror window. The movie will start playing in less time than it would take to put a DVD into a player and start a movie. Unlike DVD’s , there’s no FBI warnings to wait through, but there are also no chapter selections, no extra features, no alternative audio tracks or captions. Movies can be viewed in an Internet Explorer window, or full screen, with a hidden control interface that pops up with mouse movement. You can jump to any part of the movie as soon as you start, with only a few seconds wait. If you do pause a movie, the time you are paused doesn't count against your monthly time. If you completely stop the movie and logoff, the movie will resume rather than restart when you return.
Conclusion: Netflix or Blockbuster?
The winner in the competition between Netflix and Blockbuster is truly the consumer. We’re getting lower prices, better service and more features. Both offer similar service quality and nearly identical pricing, with the real difference being the features outside their basic rental queues and DVD by mail service. Blockbuster’s Total Access plan lets you return DVD’s to their local stores AND pick up a new DVD without affecting your queue. You also get one or two coupons each month to use at your local Blockbuster store. Netflix offers hiqh quality video streaming for NO extra cost, a terrific value. Netflix’ member ratings are a bit more useful than Blockbuster’s, and Netflix offers links to professional reviews, a slight advantage over Blockbuster for some users. I’ve used Blockbuster for over two years, and only used Netflix for a little over a month, but availability of DVD’s appears to be comparable.
If you're thinking about trying online video streaming/video -on-demand, Netflix should be on your list. Their business model is different than what you'll find on sites like iTunes, Movielink, Vongo or other download services, but its simplicity should win more than a few customers, numbers which should grow as the library improves and users get experience with the business model. The Netflix’ “Watch Now” library is limited by its selection of over 2000 shows, but it is continually improving. And Netflix says it won’t approach the size of their DVD library for a decade or more (too many licensing issues). Still, its good enough now to give Netflix a clear advantage over Blockbuster in the eyes of many customers, especially those with home theater PC’s.
Netflix: http://www.netflix.com/
Microsoft Silverlight: http://www.microsoft.com/silverlight/
Evolution of the Netflix Envelope: http://money.cnn.com/2006/04/20/technology/business2_netflixgallery/index.htm
Recommended:
Yes
What product did you purchase or try to purchase? 3 DVD's at a Time
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