On-demand movies aren’t a new concept in Ireland, but the arrival of Netflix in the country promises to shake up the market such has been the brand’s dominance in the USA where it currently accounts for around a third of bandwidth consumed.
However, at €6.99 a month (with the first month free as an introductory offer) is Netflix offering true value for money? We investigate.
Cheap as chips
The monthly fee for Netflix is actually cheaper than two new releases from a high street video store; and less than the price of one cinema ticket. In addition, it is cheaper than renting through both the Xbox Live and Apple TV platforms – while boasting a far more extensive catalogue. Even though it will face competition from illegal platform sharing, the success of iTunes shows that people are willing to pay for a safe and legal alternative – so Netflix is well positioned to dominate.
There are even some analysts suggesting that the arrival of Netflix could threaten broadcast TV, broadband providers and DVD retailers.
Certainly broadcast TV ratings have taken a hit in recent years due to the wealth of alternatives, including the internet and DVD box sets. However, it has proven to be a resilient medium, particularly as viewers can now record specialised programming with one touch of a button. Meanwhile, broadband providers are likely to feel the pinch because even though Netflix’s website only requires a minimum speed of 500Kb it will place pressure on providers that have large variations on what they deliver compared to what is promised by speeds “up to” a certain level.
The end of retail chains
What seems certain is that the emergence of Netflix appears to strike another blow to retail chains that are already struggling. Consumers have turned to iTunes for music and now Netflix looks set to dominate the DVD market too. HMV’s losses are already at record levels and it appears some high street chains are close to the brink. Their hope seems to hinge on customer service and turning their stores into social hubs – just like bookshops.
Another key for retail chains is to capitalise on their online businesses by offering cheaper deals on movies and TV shows that you can actually keep. Just as there is a passion among some music lovers for buying CDs and having something tangible that they can listen to at any time, there is a similar passion among movie and TV fans to own box sets and collections of their favourite shows. However, it is vital retail chains offer them at competitive rates to draw more business to the buying market and away from the renting market. For consumers looking for good value, price comparison services and movie voucher codes are one way of making buying prices more competitive.