As a Netflix (NASDAQ:NFLX) subscriber -- but not a shareholder -- I was excited when I received a postcard the other day announcing not only a lower monthly subscription price, but also this service called WatchNow. Seems that by downloading a small application to my computer's hard drive I can instantaneously watch DVD-quality streaming movies for free.
OK -- to the Netflix cognoscenti, this isn't exactly news. My Foolish compadre Rick Munarriz not only welcomed the online movie rental company into the real world of online movie companies back in January, but had reported on his sneak peek a few months earlier. Sorry, Rick, I missed those earlier reviews. The postcard was news to me, and I immediately tested it out.
Stellar or startlingly unimpressive?
The app loaded without problem, and the Academy Award-winning documentary Born Into Brothels, about teaching Calcutta's red light children the art of photography, ran flawlessly. This wouldn't amount to much more than a product review if I hadn't been surprised by Rick's less-than-breathless follow-up this week, after he saw the numbers Netflix itself had just breathlessly revealed.
Rick made some good points. A service with nearly 7 million subscribers was able to attract only 5 million views, on a program that's part of the subscription fee. With 80,000 movies in its library, Netflix also has seen fit to make only a measly 3% of them available through WatchNow. And when you look at the selection, it's not exactly chock-a-block with new releases. These are older movies and TV series.
I also found myself agreeing with Rick that extended viewing of movies on my laptop wouldn't become a habit for me. I already have my Netflix subscription, I have a membership at my local Blockbuster (NYSE:BBI) store, and I've found the convenience of Redbox -- the kiosk movie rental venture between McDonald's (NYSE:MCD) and Coinstar (NASDAQ:CSTR) -- to be very convenient and affordable. It's good that WatchNow is part of my subscription fee and not an additional charge, because I can't see paying for something I probably wouldn't use all that often.
It's news to me
Or wouldn't I? I think this is where I diverge from Rick's view of the situation. You need to factor in that Netflix really hasn't been promoting WatchNow until now. Despite Rick revealing it to the world almost a year ago, I wasn't aware of it until the other day. I'm sure there are a few others like me.
Although the selection is limited right now, I'm pretty sure more movies in the library will be coming online as Netflix rolls out the service and hypes its availability. Even now, with more than 2,000 titles to choose from, I'm sure the list has movies I want to see, even if they're not new releases. I still have the DVD-by-mail subscription to get those new releases; WatchNow would serve as a supplement to assuage my needs for instant gratification.
To my thinking, the biggest hurdle that needs to be overcome is watching the movie on a tiny screen. If I'm stuck somewhere with nothing on TV, viewing a movie on my laptop might be an option, but it's not exactly the same as family night in front of the plasma TV.
A big screen debut
That's where wdipaolo, a subscriber to Motley Fool Stock Advisor, helped me out. Netflix is a recommendation of the service, and wdipaolo mentioned on the Fool discussion boards that simply by using a computer monitor cable and set of standard computer speakers, the laptop could be hooked up to the big-screen TV. OK, it's not as convenient as the Amazon.com (NASDAQ:AMZN) Unbox service -- which offers digital movie downloads in conjunction with TiVo (NASDAQ:TIVO) -- or even Apple's (NASDAQ:AAPL) Apple TV, but then again, it doesn't cost me as much as $15 per movie or $300 for a basic set top box.
I'm actually a lot more excited about the year-to-date numbers than Rick is. I think we'll see a lot more subscribers using the service and the goal of 5,000 titles available to WatchNow will attract even more people. If it's free it's for me, and WatchNow looks like a service I'll be tapping into more.
Rick's got it partly right -- Netflix can do more with WatchNow to further distance itself from Blockbuster. But I think it's already made great strides in stemming any rush to the exits.
Netflix and Amazon.com are recommendations of Motley Fool Stock Advisor, while TiVo is a former pick. Coinstar has been singled out to Motley Fool Hidden Gems subscribers.
Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.
