In 
February, 2009 Netflix CEO Reed Hastings said the following: “The company’s success hinges on its ability to transition to online video from DVDs…” Thanks to devices such as Playstation 3, X Box 360 and the iPad, one could say the transition has been wildly successful. However, two issues still plague Netflix from gaining wider acceptance. A greater variety of current movie titles and TV programs and a future where bandwidth is not capped out.
Many consumers complain that the current selection of movie offerings on Netflix resembles walking the middle of the isle of yesteryear’s Blockbuster where only B-movies and never heard of straight-to-video releases lurk. What Netflix needs is a constant supply of the latest and greatest titles to keep consumers coming back or they may start seeking other avenues.
Striking Deals for Better Content
One of the nagging issues since Hastings made his prophetic comment is that Netflix hasn’t been able to strike enough deals with the likes of HBO and the big movie studios to gain access to the streaming rights for fresh content.
Despite these problems the 14 year old company has had some recent gains by reaching agreements with NBC Universal and CBS as well as acquiring AMC’s  Mad Men. It’s also important to recognize the success of Netflix online venture can be attributed to its ingenious use of algorithms (known as its content recommendation engine) where its vast store of titles are targeted to subscribers unique profiles. And even with its recent price increases many analysts predict the company will continue fair well because of it’s convenient and seamless ability to work on so many platforms. (Android, iPhone, iPad, Xbox360, Wii, PS3, PC and 3DS to name a few.)
Future Bandwidth
As for bandwidth, Nielsen recently estimated the typical customer is streaming around 11 hours of video from Netflix’s website per month. However, that is only based on PC and laptop usage. In Canada, where there are lower bandwidth data caps, users face paying extra ISP charges for going over the limit which is seen as a deterrent for rapid growth. For the mobile devices, Netflix has recently added a feature that allows viewers to change the video quality which cuts down on the data consumption restrictions where wireless carriers such as AT&T have imposed caps.
One thing for certain is the online streaming business is growing exponentially while the industry is still very much in flux. To quote Chris Anderson from Wired Magazine, when a “technology is invented, it spreads, a thousand flowers bloom, and then someone finds a way to own it, locking out others. It happens every time.” Stay tuned for the next technology to possibly upset Netflix…
