Netflix has been hard at work getting its content on as many platforms as possible. This week, they're starting to stream early seasons of ABC shows like "Lost" and "Desperate Housewives." There are also rumors of a Netflix app that will soon stream video content to the iPhone.
This is all great news for Netflix. But is it a winning situation for the networks? Yes.
ABC has been notoriously gun shy about sharing its content online. But a partnership with Hulu last September means that the network's shows have started showing up on the site. And this new agreement means that three of the four major networks: ABC, CBS and NBC are all streaming content with Netflix.
The initial fear for the networks in sharing old content with companies like Hulu and Netflix was that it would cannibalize earnings from DVD sales. But that's inevitable. As streaming becomes more readily available, interest in owning DVDs will continue to delcine.
At least this way, the networks can maintain and increase interest in their shows. And get some advertising revenue while their at it.
For awhile now cable networks like HBO have allowed subscribers to access old episodes through "On Demand" channels. Most of those are accessed at no additional cost to the consumer. So while "Sopranos" viewers may watch old episodes on their television set instead of buying the new DVD set, the network's interest in keeping them subscribing to content overrides concerns about selling DVDs to those subscribers.
For the major networks, messing with DVD sales is a tricky business. But as viewing habits change, they need to adjust their revenue models. Putting this content online (and accessible immediately) will help increase interest in premieres of these shows. And Netflix and Hulu will stream the content against advertising, kicking back revenue to the networks.
The only losers in a situation like this are Apple and AT&T. A Netflix app on the iPhone could seriously eat into sales at the iTunes store (which is one reason, by the way, that such an app may never see the light of day).
And for AT&T, consumers streaming high quality content on their phones is going to be a huge uptick in bandwidth costs. That is likely to make the wireless provider a bit grumpy. But then again, AT&T can always pass those costs along to the consumer. Cheers!