Netflix is at what might be looked back on as a watershed moment in the company’s history. On Monday they announced a $7.99 all you can eat download service for movies and television and according to the New York Times they are expecting that the cost of streaming movies will pass the cost of shipping DVDs for the first time this holiday season.
Of perhaps equal significance at the industry level, for the first time cable television subscriptions have fallen for two quarters in a row. Welcome to over the top television.
On the back of this the stock market has sent Netflix’s shares up fourfold since January, and the company is now valued at $10bn.
The studios are now (of course) waking up to the power of streaming video and want in on the action, either via charging Netflix more for their content or by launching their own services.
Here in Europe the market is a little way behind, but we are catching up, and as of earlier this month movies from our portfolio company Lovefilm is now on the PS3.