Netflix "indefinitely postpones" online movie download service

Details are sparse, at least for the moment, but Netflix CEO Reed Hastings confirmed during an analyst call yesterday that they had "indefinitely" postponed the test launch of that new online movie download service they've been testing. Apparently they were having problems getting the studios to agree to license their content (which is exactly the problem everyone predicted they'd run into when they announced this last year). "Indefinitely postponed" is usually a euphemism for dead in the water, so unless they somehow manage to get it together, something which'll be tough since the studios haven't exactly been dying lately to license their movies to any new online services (not even Apple has been able to do it), it looks like Netflix'll be sticking to its regular DVD-rentals-by-mail biz for the foreseeable future. Oh, and anyone else notice that their partnership with TiVo has been M.I.A.?

[Pip @ Dec 19th 2005 12:20AM]

Probably because studios see that they can charge per download instead of people 'renting' downloads for cheaper.

[Permanent4 @ Dec 19th 2005 12:20AM]

Licensing and iTunes may not be the only problem. How long would it take the average DSL subscriber to download a good-quality two-hour movie in MPEG-4 format? And how much bandwidth are you delivering if you have even 100,000 customers? It might not be profitable.

I think Netflix will have a lot more success with renting out Blu-ray movies to future PS3 owners through the mail.

[Jeff @ Dec 19th 2005 12:20AM]

"Probably because studios see that they can charge per download instead of people 'renting' downloads for cheaper."

Or they *think* they can. The only way that'll work is if people have the same quality and freedoms as they do with DVD's, i.e. they can transfer them between machines, etc. One of the big reasons for Netflix's success is that you can take your three DVD's with you on a business trip or whatever.

That won't (or wouldn't) necessarily be true of their download service, but we don't know what form that was to take. An addition to their DVD plans? An option? Would it be priced less than the DVD plans? We don't know.

But people aren't going to "buy" movies for the same prices they pay for DVD's if they can't do as much with them. Episodic content may be a different story because $1-$2 a pop isn't going to seem like much, even if in the end you pay as much as you would for a DVD box set of the entire season (e.g. "Lost" on iTMS). But who's going to pay $15 for a low-res download of a movie that you can only play on a single device? It makes no sense.

I don't see a large number of successful download movie services of any kind in any case. Do you use Movielink? Neither do I.

This is just another example of a content industry shooting itself in the ass. They'd better hook up with Netflix or they'll be in a world of hurt within the next decade.

[the nipponese @ Dec 19th 2005 12:20AM]

i guessing probably akimbo (www.akimbo.com) is going to be the first one to do this. they already have some major flicks like Hero and some older stuff from the 1980s... and major league baseball. i guess time will tell...

[Elect @ Dec 19th 2005 12:20AM]

Do you really think little Akimbo has more leverage when negotiating with the studios than Netflix, Apple or Comcast? If you listen to the call, Netflix said the same reason they are not offering the movies is what is holding Comcast back from making more movies available. Believe me if Comcast cant do it, Akimbo has no shot.

Even CinemaNow and MovieLink have a pretty small selection and they are partially owned by the studios themselves. It seems that the studios gave long exclusive contracts to the broadcast networks.

They also made reference to TIVO and said they love working with those guys but nothing is going to happen.

[Rusty Shackleford @ Dec 19th 2005 12:20AM]

I predict the end of movie entertainment as we know it. The movie studios cannot make any money at this any longer since they are too greedy to permit downloads of content.

No one wants to go to the movie theater anymore and watch an analog movie on a big screen. The kid behind you spills coke down your back, the floor and armrests are sticky, there's someone yakking on a cellphone next to you, you're stuck in the front row because you got there late and your neck has a crick in it from looking up at an odd angle, and so on.

The future of video entertainment will include the downloading of cheap pr0n, amateur documentary vidcasts on a wide range of subjects, and small independent-studio direct-to-digital films only, in a 320x240 pixel format suitable for viewing on a video iPod.

Movie stars will all have to find other jobs, for example in state or national politics or the promotion of weird cult religions like Scientology.

Netflix will be acquired by Apple and their extensive DVD catalog will be available through iTunes Music/Video store, and iTunes will only be able to burn the content onto a blank one-time-use destructive-read DVD, not download it to your hard drive.

[CT @ Dec 19th 2005 12:20AM]

I agree with Rusty. The best and most strategice acquisition Apple could make this is Netflix. It just makes sense in light of the new iTunes, iPod, and even the new remote accessoried iMac.
Los Gatos ain't that far from Cupertino. Someone needs to get in their car...

[John Doe. @ Dec 19th 2005 12:20AM]

That fine. I'll continue to use bitorrent....*waits as season one of Lost downloads*

Fuck the MPAA like the rat bastards they are.