Netflix to begin offering streaming-only plans

  • Chicago (IL) - On Wednesday, Netflix announced it will be launching a brand new, stand-alone streaming service. The company will offer customers a fixed monthly fee for accessing the company's DVD categories via web-based streaming only. There are no specific details as to when the new service will launch or how much it will cost, though many predict it wil be in the third quarter.

    Netflix has recently reached the 10 million subscriber mark. And with the popularity of online streaming services growing, individuals are utilizing it as an alternative to on-demand cable television. The service allows users to download movies and television shows to their Xbox’s, television box top sets, and home computers.

    Companies such as Netflix and Blockbuster are in a position to capitalize on this growing trend by offering subscriptions for strictly video streaming service which access their huge libraries.

    Currently Netflix already offers streaming video to customers who have any monthly subscription to their mail-in DVD rental program. Allowing customers to view all of their titles online would save the company money, as many individuals would choose to view their movies instantly rather than waiting for them in the mail, thus reducing postage fees, travel times and enabling a better service for the individuals using the service, something that's costing Netflix less than postage for the extra bandwidth use.

    On additional positive boon for this kind of web-streaming service is that cable companies and ISPs in general might be forced to alter their rules on bandwidth capping. Currently, Comcast will cap users at 250 GB a month -- which is a lot. Other services are much more legalistic and cap as low as 5 GB (Verizon Wireless broadband).

    With the money making potential of these kinds of streaming services, it is likely that the cable companies will begin isolating the bandwidth used for other downloads and traditional data use via web surfing, and that specifically coming from companies like Netflix. ISPs will opt to get a piece of that pie, rather than block the bandwidth for blocking the bandwidth's sake.