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Netflix, adapt now or become irrelevant - fast

 Wow, DVD-in-the-mail Netflix seems to be warming up their p.r.
Written by Russell Shaw, Contributor

Wow, DVD-in-the-mail Netflix seems to be warming up their p.r. machine these days.

There's a highly complimentary piece in today's USA Today entitled  Charismatic founder keeps Netflix adapting.

And fellow blogger Om Malik loves the new Netflix envelope.

OK, agreed. Netflix founder and CEO Reed Hastings is charismatic, and yes, the new envelope is cool.

But I really think Netflix is taking the migration of DVD distribution from stored media offered at retail or in their case, thru the mail, to digital download - much too casually

From the gist of what Hastings tells USA Today's Jim Hopkins, he intends to expand Netflix's customer base from the current four million to 20 million by 2010.

By 2010, to - get this "ready Netflix to an eventual shift to downloads."

Hastings implies that he thinks that because of licensing agreements that have yet to be worked out with studios, few titles that exist in downloaded forms, as well as hardware and software development gaps, the shift to download is somewhere off in the future.

I'm not so sure, though. Despite his generally positive tone, Hopkins notes that broadband distribution of movies and TV shows is fast becoming a reality.

And yes, Amazon is getting into the business as well, and I gotta tell you, they aren't going to wait until 2010 to make their mark.

"All these competing products via digital delivery and not mail order," Avondale Partners analyst Frank Gristina tells Hopkins. Gristina says the pace of this trend has "clearly accelerated."

Yes, indeed, it has. So I tell you this, Netflix-you can design all the pretty envelopes you want, but you are working with a distribution model that includes dinosaur bones (to fuel mail trucks).

And here's something no one else is talking about. Let's just say we attack Iran, and Iran retaliates by cutting off their oil, and bombing others. Crude shoots thru the roof, and fuel prices do too. Can you then spell "emergency rate hike request" on the part of the Postal Service and similar actions overnight delivery services as well? 

For mailers such as Netflix, that's increased mailing fees, even at the same time broadband is getting faster and more widely subscribed-to.

And more deals are being done for digital distribution. 

Netflix, the broadband digital download future is just about here. You don't have four years to adapt. 




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