"If you build it, they will come."
That's why
Netflix (Nasdaq: NFLX) is building its online
infrastructure around devices you may already have in your
entertainment center, right next to that 52" LCD screen. You
can already stream the "growing library" of digital movies
from Netflix through an
Xbox 360from
Microsoft (Nasdaq: MSFT),
Blu-Ray playersfrom
Samsung and
LG Electronics , or your
boring old computer. Soon, you can add the PlayStation 3
from
Sony (NYSE: SNE) to that list.
That's right --
Netflix and Microsoft may be chummy, but it's not an
exclusive friendship. The Sony move adds nearly 9 million
potential customers who may have been holding their breath
until the PS3 could stream these movies. Now, there is
probably a good-sized overlap between the two demographics of
existing Netflix subscribers and PS3 owners, so for many
users this will amount to just a nice new feature.
Still, this should be good enough to pull in a few
fence-sitting video gamers who weren't too sure about this
movies-by-mail business. I would have preferred to see
Nintendo (OTC BB: NTDOY.PK) joining the
Netflix fold because I own a Wii, and so do some 21 million
fellow North American Wii gamers. With only 9 million systems
sold here, the PS3 is the least attractive partner among the
video console makers. Netflix is probably working on a Wii
deal behind the scenes, but has "nothing to say about it at
this point."
No big deal, though. The overarching goal is to make
Netflix streaming available
through as many channels as possible. CEO Reed Hastings
won't rest until every Internet-connected TV set, game
console, Blu-Ray player,
TiVo (Nasdaq: TIVO) recorder, and cable box
presents your queue of streaming movies at the flick of a
button. When
Comcast (Nasdaq: CMCSA) signs on, it'll be
time to be truly ecstatic about Netflix as a digital media
provider. And I do believe that will happen in the next
couple of years. The rich get richer, and Netflix is building
up a fine head of steam in its partnering efforts.
When we
look back at Netflixin 2015 or 2020, the whole
DVD-by-mail business will seem quaintly outdated -- a larval
stage that helped Netflix build its real strengths, which are
industry connections and
an unmatched database of consumer tastes. Netflix might
become the king of digital media, though rivals like TiVo and
Amazon.com (Nasdaq: AMZN) surely will give
Netflix a run for its money.
I think it's fair to say that Netflix is off to a brutally
good start, though. That's why I'm not selling my Netflix
shares
despite the recent run-up.
I'm in it for the long haul. How about you? Let me know
in the comments below.
This article was originally published as
Netflix Adds to Its Collectionon
Fool.com
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