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In this next section, we would like you to evaluate a new service that DirecTV is thinking about offering to their customers. DirecTV plans to offer a streaming-only Netflix-like service for a flat fee per month, which would appear as a line item on your monthly bill.
Here are some of the features DirecTV is proposing:
Netflix will likely be okay whether or not DirecTV goes through with its plan. It's quite clear that DirecTV just doesn't get it: the only way it could possibly take on Netflix is if it offered such a service at the same price as whatever it currently charges its subscribers. In other words, DirecTV should have a Netflix-like service included within its existing pricing structure. Then again, the company just started offering $30 movie rentals, so we're hardly surprised.
DirecTV is not the only satellite service provider interested in the streaming content market. Dish recently bought bankrupt Blockbuster for $228 million in cash and we speculated that it was interested in the retailer's online content to use as a base for an online product to deliver movies.
This year will be a very important one for Netflix because the company is going to get attacked from multiple sides. The service will get hit by competition that is very similar to its offering as well as alternatives that will likely be backed by much bigger companies. For the sake of the movie industry, we hope Netflix comes out on top.
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