Netflix remains the movie & television content rental market leader, but faces a challenging 2011 as the company moves more towards online video as multiple new rivals emerge.
Most notably, the company is caught in a continued struggle between physical DVD rentals and a migration towards streaming content. A $7.99 streaming-only plan was introduced in late 2010, with all rental plans including a DVD rental receiving a price increases
To keep up with this changing tide, Netflix must be on its toes and ready to battle competitors. Netflix continues to look for new ways to expand its current library of streaming content. Unfortunately, an analysis shows that just nine of the top 100 theatrical releases of 2010 are available online via Netflix instant viewing. In addition, Netflix has to wait 28 days before offering some hit releases via DVD, which only further hurts its rental business.
Netflix will face increased pressure in 2011, with Comcast, Apple, Redbox, and numerous other companies taking aim at the online streaming market. AT&T recently introduced its U-verse Movies platform designed to give subscribers a chance to watch TV and movies through the TV, Xbox 360 and mobile platforms. Movie rental kiosk operator Redbox plans to launch a streaming service sometime in 2011, proving that Netflix will have to continue to battle old rivals who are trying to spruce up their own operations.
With all the competition, Netflix will have to work carefully to ensure it keeps current subscribers happy. It may also become more difficult for Netflix to obtain new subscribers if there are so many other rival products for consumers to choose from. But even with all this new market activity, analysts are estimating that Netflix picked up 2.64 million new subscribers in 4Q 2010.