Netflix May Offer Streaming Video in U.S.
As a footnote to his apology for characterizing Americans as too "self-absorbed" to even notice Canadians are offered a cheaper Netflix subscription, Netflix CEO Reed Hastings said the company may add a streaming-only option for its U.S. subscribers in the coming months.
Streaming or Watch Instantly is the only option available to Canadians, priced at CA $7.99, because the company does not have through-the-mail distribution of DVDs across the border.
In the U.S., the percentage of Netflix subscribers has grown dramatically: 61 percent of subscribers used Watch Instantly in the second quarter of 2010 compared with 37 percent in the same period in 2009. The minimum service that includes both DVDs by mail and streaming is $8.99.
Movies available to watch instantly have been limited by the company's agreements with pay TV operators who have up to 18 months of exclusive screening time after a movie is released in theaters.
Netflix has its workarounds. Last month the company signed a film licensing deal with Paramount, MGM and Lionsgate, which will cost Netflix about $200 million a year to the studios.
The company is also adding to its TV lineup in a move to reverse gains made by online TV providers such as newcomer Hulu Plus , another paid service. Netflix today announced a multi-year deal with NBC to offer episodes of popular TV shows, including "Saturday Night Live," "30 Rock," "The Office" and "Battlestar Galactica" that will be available starting next week.
Netflix says it spends $600 million on postage alone for shipping DVDs, so a shift to streaming makes financial sense. The company has systematically secured a presence on most streaming devices including Internet-connected TVs, Blu-ray players, smartphones, tablets , gaming consoles, and set-top boxes such as Roku and Apple TV.
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