Netflix: No, We Won't Stream New Releases

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Netflix (NFLX) is the undisputed champ when it comes to streaming video. It has more than 25 million domestic streaming accounts, and those users are collectively consuming more than a billion hours of Netflix content a month. A recent third-party study found that Netflix was serving 20 times as much video content during peak primetime viewing hours as its nearest competitor, Amazon.com (AMZN).

Netflix has the premium streaming market just where it wants it, but it may not be able to hang on to its lead for long. Amazon -- and now Redbox Instant -- are doing something that Netflix has refused to do: stream newer releases.

Will that refusal be the undoing of Netflix?

A Dark Night Rises

Batman fans can pay $1.99 for a 48-hour digital rental of "The Dark Knight Rises" through Amazon Instant Video. Netflix subscribers have to drive out to the local Blockbuster or Redbox kiosk. Or they can pay to rent physical DVDs, though the popularity of that plan has fallen sharply over the past year.

Redbox Instant by Verizon -- a new service from Coinstar (CSTR) and Verizon (VZ) that's rolling out in beta testing this month -- also offers pay-per-view digital rentals for new releases that aren't part of its digital catalog.

Netflix argues that it doesn't want to follow its competition here. Instead, it wants to stick to the low monthly rate of $7.99 for unlimited streams of its growing library of second-run movies and TV reruns. When studios have held back on newer content, proposing that they would only make it available if Netflix introduces a tiered pricing strategy so they're not belittling the value of their hotter titles, Netflix has passed.

It could be arrogance. It could be the company watching out for its growing number of customers. Either way, as long as Netflix is the runaway leader it's not going to be in a hurry to fix what isn't broken.

That could be a mistake.

One Stop Shop

Netflix isn't afraid to go after original programming deals, hoping that it can compete against the pricier HBO and Showtime premium movie channels. Netflix also isn't afraid to admit that it's wrong, as it did last year when it undid the Qwikster fiasco within weeks of announcing that it would split its operations into two distinct websites.

However, Netflix is playing hardball on new content, even though bestseller lists show that it's what customers crave the most.

Netflix has spent the past few years making sure that its content is easily accessible. It was the first service to strike deals with all three video game consoles. Some Blu-ray players even have a "Netflix" button on their remote controllers. Netflix has the credit card information on file for its 25 million streaming users. It would seem to just make sound financial sense to try to sell them individual rentals of new retail releases.

But for now, Netflix isn't budging.

Motley Fool contributor Rick Aristotle Munarriz owns shares of Netflix. The Motley Fool owns shares of Amazon.com and Netflix. Motley Fool newsletter services recommend Amazon.com and Netflix.

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m_man24

You can also check www.flixfilm.us for new releases on Netflix

August 07 2013 at 5:50 PM Report abuse rate up rate down Reply
Paul McGuirk

You can't stream what you don't own. After the debacle with Starz, it is unlikely Netflix will try to streaming new releases. To stream new releases, they would have to create a pay per view service that is a little more involved than what they have now. I am thinking Netflix is afraid that if they stream new releases like they stream the rest, they will find themselves without content [ after the cable companies start complaining]
Remember Starz pulled their content - with is the reason for the current drought of decent non-independent films. Starz didn't like the trend of declining subscribers while Netflix subscribing is going up.

December 31 2012 at 10:43 AM Report abuse rate up rate down Reply
norman

And I don't NEED old movies right now....

December 26 2012 at 12:50 AM Report abuse rate up rate down Reply
Ian

Actually Netflix does occasionally stream new releases, but they are usually documentaries and independent films, not big blockbusters which draw much higher rates on sites like Vudu and Amazon. With an over 500% increase in streaming customers this year, Netflix's formula for a reasonable monthly subscription fee seems to be working.

December 25 2012 at 1:28 PM Report abuse rate up rate down Reply
Jim

I have had streaming Netflix for about 4 years. For the people that complain, they only want new releases. For $7.99 a month, it's a great deal. My 5 year old gets to watch age appropriate content with NO COMMERCIALS!! From January until April we pretty much watch only Netflix. I have so much stuff in my queue that if I was to retire today, and I started watching stuff on my queue for 12 hours a day, it would still take me about 3 years to watch everything. I would get rid of my cable, but I enjoy watching my sports and I cannot get "free" TV with an antenna. I tried Hulu Plus. It sucked. None of the shows I usually watch were available, only 2-4 minute clips. I have been taking advantage of Ultraviolet streaming through VUDU lately. I have seen people selling just the codes for $2-5 for a movie code. Allows me to get brand new movies a lot cheaper than at any store.

December 25 2012 at 10:55 AM Report abuse rate up rate down Reply
cuscv

They have plenty of new releases, even if you have wait 2 or 3 extra months to get them(Mirror Mirror, The Artist, etc..) I wish they'd expand their classic TV selection, especially 80's and 90's sitcoms and ones that didn't get proper DVD treatment(Growing Pains, Who's the Boss, Head of the Class, Perfect Strangers). Then Netflix would be alot more valuable.

December 25 2012 at 10:10 AM Report abuse rate up rate down Reply
redead131

netflix is a good serivice but i do wish they would allow new releases on it though.

December 25 2012 at 8:00 AM Report abuse rate up rate down Reply
CWO3 TG FurryUSA

Thing's are going to get worse in the next two years , here come's 1929 all over again? Keep extra food at home you just might need it? Take care and help other's when you can if this happen's . God Bless AMERICA .

December 25 2012 at 5:56 AM Report abuse +1 rate up rate down Reply
opus1138@hotmail.com

I think they should give customers the option of renting new releases for a small fee that would increase the value of the service.

December 25 2012 at 2:27 AM Report abuse +2 rate up rate down Reply
suealiaim

good for netflix. the studios think far too highly of their products...in 2 years i'll be able to buy a used copy of dark knight rises used at a garage sale for 2 bucks...not that i'd buy it then, either.

December 24 2012 at 11:16 PM Report abuse rate up rate down Reply