That's the thing of it -- obviously there is a market for "video at any speed" and a market for hi-fi/prosumers.
For instance, research has shown that more people actually like hacked-up, low-bandwidth mp3s over higher-quality ones. So perhaps this guy is thinking the video market goes the same direction? That the price for bits will always trend towards zero?
If so, this will be a major shift in the movie business -- as big as MP3 file-sharing was to the music industry.
It's probably better business for Netflix to buy servers and big fat pipes than to buy more gigantic warehouses full of discs.
The cost of handling and mailing discs probably stays fairly constant, while the cost of handling bits goes down (as you said).
Netflix certainly isn't an uninterested observer in this. Things might naturally trend toward more streaming, but Netflix is probably pushing hard too.
I think we're on exactly the same channel. Netflix is betting on a market split between prosumers and casual movie watchers, (where, of course, casual movie-watchers are the biggest share and they pick them up). Hardware vendors (and moviemakers like Cameron) are betting on a trend towards more realism, both in sound and video.
Hard to say where the market goes. For me, I'm always into more and more fidelity with reality. But I think there are a huge chunk of folks who only want bragging rights to have seen the latest flick first.
The problem, of course, is that if NetFlix is right and the market only wants something-right-now, that it might take anything-right-now: that people get stuff for free and NetFlix no longer has any market at all.
Very interesting quote. Not sure if he realizes the implications.
For instance, research has shown that more people actually like hacked-up, low-bandwidth mp3s over higher-quality ones. So perhaps this guy is thinking the video market goes the same direction? That the price for bits will always trend towards zero?
If so, this will be a major shift in the movie business -- as big as MP3 file-sharing was to the music industry.