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Netflix profile

There's a great story about Netflix over at The Register that describes their successful entry into the video rental market (only 2% nationwide), but notes they're doing better in San Francisco:

while its original market in the San Francisco Bay area is now running at 5.9 per cent. It reasons that it can reach this penetration, perhaps more, across the US and it is this calculation that initially led it to say at this week’s unveiling of its fourth quarter figures, that it will make the $1 billion mark early.

Pretty impressive that 1 in 17 rentals in SF is coming through the mail. This article goes into great detail about how they're moving towards delivering movies over broadband with the mention that they're currently mailing out "5 million Gb of data" each day via DVD mailers.

Since their current model relies on the scarcity of actual product, it'll be interesting to see how they move the business online to copies of movies that don't have to be returned. It'll also be interesting to see how they work out deals with studios to deliver movies. Right now they simply buy millions of DVDs. I assume Hollywood will be wanting a percentage of any and all online video sales when they move away from physical DVDs

by Matt Haughey January 28, 2004 in News

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