Taking shots at Netflix
The hopeless and outdated
For those not interested in streaming, Coinstar's
DISH plans to open the service up to non-subscribers eventually, but I doubt that it will manage to keep the same low price. Liberty Starz backed out of negotiations because it wanted Netflix to charge more for Starz content. It's likely that the cable channel will place the same restrictions on any streaming service that isn't attached to a traditional subscription-TV provider. I also imagine that DISH won't want to price Blockbuster so low and pack it with so much premium content that it encourages cord-cutting.
Well no, not really. To see why, take a look at the top four devices people use to watch Netflix.
Percentage of Netflix Traffic
|Sony PlayStation 3||30.57%|
|Microsoft Xbox 360||24.94%|
Video-game consoles account for roughly 60% of Netflix's total traffic. At the moment, gamers wanting to switch to Prime would have to buy another device if they want to watch Amazon's content on their television. That may be just enough to keep current subscribers from wandering over to Prime.
The only contender
About the only service poised to compete with Netflix is Hulu Plus. It streams to both the Xbox 360 and the PlayStation 3, so switching is a matter of canceling one and registering for the other. It also has a selection of newer episodes and more than 40 million free users just waiting to be converted to paying subscribers.
Yet I don't think Hulu is the Netflix killer, either. First, Hulu's owners -- News Corp., Disney
You also have to take into account the influence of subscription-television providers. Because Hulu carries episodes from the current season, it's the best option for potential cord-cutting TV junkies. Subscription-TV providers will probably step in to ruin the service by insisting on higher prices -- and we all know how well that goes over -- requiring Hulu Plus subscribers to also have TV subscriptions to access premium content, or holding new episodes for a week.
The past few months have shown us that Netflix is far from invincible, but I think many investors declared the company doomed prematurely. Not one of its competitors is in a position to capitalize on the company's recent PR gaffes. By the time these companies have gotten their acts together, consumers will probably have calmed down and the opportunity to overtake Netflix will have passed.
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Fool contributor Patrick Martin owns shares of Netflix but of no other company mentioned in this article. You can follow him on Twitter, where he goes by @TMFpcmart03. The Motley Fool owns shares of Microsoft. Motley Fool newsletter services have recommended buying shares of Netflix, Amazon.com, Microsoft, Nintendo, and Walt Disney, creating a bull call spread position in Microsoft, and creating a bear put spread position in Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.