Why Netflix Unlocked Your Digital Shackles

So you installed the Netflix (Nasdaq: NFLX  ) streaming app on your iPhone and your iPad. The laptop in your office has been feeding all-digital flicks to your biggest screen for years already, right alongside the Nintendo Wii in the kids' playroom. And of course, your Blu-ray player came with a Netflix logo on the box, so why not set the darn thing up?

That used to be about all you could do in a single household. In order to try out Netflix streams on your Android phone, or that snazzy new media center that hard-drive maven Western Digital (NYSE: WDC  ) just released, you had to navigate a veritable maze of menus to disable the Blu-ray player first. After all, you could only have up to five devices hooked into one Netflix account.

Not anymore. As of this weekend, Netflix decided to effectively do away with that limit. The new ceiling is a roomy 50 devices per account. Like 640 kilobytes of memory, that should be enough for everyone.

The five-device limit felt a bit archaic already. A tight limit made sense when you needed a Roku box or an actual computer in order to watch Netflix streams, but the proliferation of Netflix-enabled set-top boxes and mobile gadgets has made the old belt impossibly tight. As an early cord cutter with two console-type media centers and four laptops around the house, I've found myself juggling those activation slots from time to time. With 10 times the old allotment at my disposal, that activation page will soon become a distant memory.

Digital rights management, or DRM, is a necessary evil if you want Walt Disney (NYSE: DIS  ) and News Corp. (Nasdaq: NWS  ) to sign off on media licenses. The acronym often translates back into "disastrously restrictive methods," particularly in the hands of Sony (NYSE: SNE  ) and Electronic Arts (Nasdaq: ERTS  ) . Turning customers off with ridiculous DRM schemes simply can't be good for business, and Netflix is doing the right thing by relaxing its restrictions a bit.

Netflix broke the ice on digital movie streams, and it's an early example of consumer-friendly cloud computing. It certainly won't be the last. This video explains how cloud computing is revolutionizing the IT industry, and how you can profit from pioneers like Netflix exploiting the new paradigm. Click here to feast your eyeballs on the video report right now -- it's 100% free.

Fool contributor Anders Bylund owns shares of Netflix, but he holds no other position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Western Digital. Motley Fool newsletter services have recommended buying shares of Netflix, Disney, and Nintendo. Motley Fool newsletter services have recommended buying puts in Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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