In many homes, the TV is topped by a cable box, a DVR, a satellite box, a PC, a Slingbox, and an Unbox from Amazon (AMZN). Netflix (NFLX) thinks that television can hold the weight of one more gadget.
But, it is a pretty good one. The movie rental firm is offering a $99 device which will give consumers instant access to thousand of movies in the Netflix (NFLX) library. The best part of the deal is that current Netflix subscribers don’t have to pay more for the service.
Netflix has one big advantage over many of its competitors in the video-on-demand business. It already has 8.2 million customers who have been amassed over years and at the cost of hundreds of million of dollars. Now Netflix wants some additional yield out of those people.
The genius of the Netflix product is that it leverages the company’s current content and customer base without any additional investment. Whatever money the rental operation brings in should go right to the bottom line.
The move is as clever as it is simple.
Douglas A. McIntyre