Netflix’ move into the video-on-demand market gained some credence on Monday when a blog devoted to the DVD rental firm said Monday it had discovered evidence the company was developing a “Netflix Player.”
A Netflix spokesperson did not confirm or deny the comments on the “Hacking Netflix” blog but acknowledged that “we have been testing something and will be announcing something this year.”
Several Netflix users commenting on the blog said that an apparent technical glitch on Netflix.com Friday allowed them to get a glimpse of what appears to be the company’s attempt to build a video-on-demand service.
A user named Tom uploaded a screenshot to the blog that he said was captured from Netflix’ site asking for a “Netflix Player Registration ID.”
“I just noticed in my account info page, there is a section for ‘Netflix Player’ with a link to ‘Register Player,’” Tom wrote. “I haven’t noticed this before. I wonder if this is a new service that they are rolling out. Could this be something to do with movies-on-demand?”
Another user named Ian said he found a reference on the Netflix site to a “downloadable genre.” Founded by Netflix fan Mike Kaltschnee, Hacking Netflix says it receives 100,000 views per month.
The Netflix spokesperson declined to comment on whether there were any recent glitches in Netflix’ system, saying only “there are always moles in a company.”
Last September, the company announced an agreement to offer a joint “entertainment offering” with digital-recording company TiVo. But Netflix was skimpy on the details, saying only that “under the terms of the agreement, the two companies will develop technology and will work with Hollywood studios to secure content for digital distribution.”
While Netflix has not yet publicly mapped out its debut in online distribution, a Netflix media player is a likely first step into the world of video-on-demand.
Analysts like Joseph Beaulieu from research firm Morningstar said that a Netflix media player “definitely seems reasonable.”
None were able to find references to the media player on the Netflixsite, however.
“The company would probably have to either have its own proprietary media player or strike an agreement with a third party that already has a DRM-enabled media player, as the studios would want to make sure that a video-on-demand service protects their IP,” said Mr. Beaulieu.
No Surprise
If Netflix moves into some kind of Internet video service, it will certainly not be a surprise. In a recent interview, Netflix CEO Reed Hastings said that the company’s initial move “will be underwhelming,” and “a long-term play to develop over five years.”
But Mr. Hastings also said that Netflix will get into the online distribution market this year, spending 1 to 2 percent of revenues each year for the next five years.
Whatever path Netflix chooses for online video distribution will be crucial for the company’s future survival. If Netflix can master its move into online distribution, the company could continue to remain a force in the entertainment industry. The company already has 3 million subscribers to its online mail-order DVD service.
If the company falters in its Internet video plans, then industry giants in cable, telecom, Internet services, and brick-and-mortar retailers like Blockbuster will be sure to fill any gap.
Mr. Hastings likened the potential competition among the various players seeking to offer online video-on-demand over the next 10 to 20 years to an “epic battle between the forces of control and the forces of freedom.”