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Looking ahead, what cat can Netflix pull from their hat? FREE movies.
I had a great comment on my previous Netflix post (see “Is Netflix Repricing TV to What the Market Will Bear?“) from long_on_oil who noted a free subscription to Netflix makes perfect sense:
“If I ran Netflix I would offer the free streaming account and I would insert a commercial at the beginning of the video and every 20 minutes there after. One to two minute [commercials] and no more.”
This model has worked for television for decades. Why hasn’t Netflix used commercials to subsidize content costs?
I’m guessing the only reason Netflix hasn’t yet offered a free tiered streaming movie subscription is infrastructure. Last month Netflix admitted they weren’t happy with the delivery quality from digital distribution giant Akamai (NASDAQ:AKAM). So, any great strategist would wait to solve this issue before adding a tsunami of new stresses to the system.
Once Netflix ramps up and offers streaming movies and television for free (with commercials), I’d say you just might hear a death knell for cable and satellite. (See “INTERACTIVE: Join My Journey to Ditch Cable/Satellite for Internet TV“)
Now Check Out: Is Netflix Repricing TV to What the Market Will Bear? >>
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