My wife and I subscribe to Netflix, we have a two DVD at a time plan. Netflix announced yesterday that now subscribers could watch as many movies as they want online (article). The announcement came in response to Apple announcing it was starting a movie downloading services (competition lowers prices!) Similarly subscription costs fell when Blockbuster and Wall Mart entered the DVD mail service market.
I knew online movie viewing was possible through Netflix, but I had never gotten around to checking it out. Turns out I’m not alone as it seems few people watch movies on line. In part it is because the movies selection online is 6,000 movies compared to 90,000 by mail. It does include some decent TV shows including Law & Order, The Office, and 30 Rock.
So what will happen to the future price of movie rental? I’m not sure how much it costs for the bandwidth to deliver movies, but prices should continue to fall as content is moved online (assuming its cheaper to stream a movie then deliver it through mail). But prices are not likely to fall too much as shipping costs are only 41 cents per movie, meaning even heavy Netflix users only user only use a few dollars a month in shipping costs.
Update: It turns out the story about the German boss firing non-smoking workers was a hoax.