Netflix Streaming Movie Feature Announced

Netflix has announced a new online service that streams online movies, free, to subscribers' PC's.

by Helen Leggatt

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The new feature, called “Watch Now”, does not download large movie files to consumers' computer hard disks, it "streams" them directly from the Internet.

The user must download free viewing software from the Netflix site, which takes seconds, and stay online for the duration of the movie.

Watch Now, which cost Netflix $40 million to develop, enables views to pause the movie and jump scenes, as if it were a DVD.

The studios contributing to Netflix’s new service, which has about 1,000 online movies available at present, include MGM, NBC Universal, Sony Pictures, 20th Century Fox, Paramount Pictures and Warner Brothers.

An eMarketer report forecasts that U.S. consumers will spend around $3.6 billion this year on digital music, TV and movies. Spending is forecast to reach $7.8 billion by 2010 attracting big players. How will Netflix fare in this fast-growing market?

Wedbush analyst, Michael Pachter, wrote in a note to clients "We think that this new service will become irrelevant as more robust services are offered by competitors Apple, Amazon, and Google over the next few years," he wrote in a note to clients. "Should any of these companies escalate the download battle, we think that Netflix's resources will limit its ability to compete in the future."