Does Netflix Still Dream of Downloads?


Niall sent me links to couple of very interesting job postings on Netflix’s job board. They are here, here and here, and both make me wonder about DVD-by-Mail company’s plans. I get a sneaky feeling that it could be building out a service that can rival Vongo, Movielink and CinemaNow, that can be distributed via set-top devices like TiVo and Akimbo. The company had teamed up with TiVo, and promised to deliver a service by 2005. In October 2005, Netflix postponed its Internet-based download service plans. The Netflix-Tivo deal was possibly on the rocks as well.

So what now? Could it be that the deal is not dead, and download service plans are still in tact? What do you make of these job requirements?

  • Design and development of System, Networking, and Audio/Video software for a Consumer Electronics Product.
  • Developing creative end-user applications.
  • Interfacing with middleware and device driver components within a Linux-based environment.

Or could it be that Netflix is working on hardware. Anyone have any theories on this? Does anyone else think that Akimbo is a good candidate for acqusition, especially for some like Netflix, or Apple (though Steve Jobs doesn’t believe in buying, only in selling!)


Rick Hanley

You have to pay real big to play in streaming/download. Big, big companies and the studios themselves already are working the streaming and download space. Why would you think Netflix is going to get in? Hastings lied about 2005 – do you really think that he did not know that he could not get the rights until 2005 was almost over?. He takes $1,000,000 off the table every month. He will say anything to keep the share price up as long as possible.

Physical delivery in the rental model was a necessity at one time so it was a good window. If a person wanted to see a movie after the theatrical run was over, they had to buy or rent. This is no longer as true and will, over the next few years, become less and less true. The problem for the renters is that the streaming/download space is not their way out. The big guys and the studios already have it nailed.

By the way, Netflix is going to have it handed to them in the class action settlement hearing on February 22. They had the misfortune of being one too many to try the trick they tried. Whether you believe in the case or not, it is happening, and the timing could not be worse. If you read the source documents, you can’t believe how Netflix has been trapped. Ironically, when they put $4,000,000 on their books as the cost of the settlement, when it had been marketed to the class and to the judge as worth $85.5 million, they set themselves up. If you read all the source documents, you will feel ill if you’re a big fan of Netflix. Once the FTC stepped up and said the settlement was a farce, in support of the very strong attornies now representing the plaintiff who has objected to the settlement, it was bad for Netflix. They are going to have to pay much more than $4,000,000.

Did you know that Technology Crossover Ventures, who helped take Netflix through their IPO, sold 2,000,000 shares on 1/27/06? That’s about half their position.


According to a Tivo spokesperson at CES 2005, that Tivo had the technology working but Netflix never had permissions from the studios to distribute movies via download.

Rob Poitras

I think just the cost of physically shipping it isn’t cheap with pulling, prepping, stuffing then paying to send it. Then pay a person to open the package and scan it then put it back in its place. Plus all of the shipment houses around the country and managing all the inventory at each location can’t be easy to make sure people get the dvd’s fast.

Jesse Kopelman

Is the USPS a mess or is that just a common misconception. Now everyone agrees that the Postal System is poorly mannaged from a business standpoint, but I beleive their metrics for delivery are actually very good. I’m not sure any money could be saved by going Internet. On the other hand, the enhanced user experience may lead to higher user uptake or even justify a rate increase by NetFlix. So, going Internet may make good economic sense even if it doesn’t save money.

Rob Poitras

Well everyone knows the postal service is a mess. The cost of lost, broken, and stolen DVDs has to be really high. Broadband would totally eliminate all of that and it has to be appealing to Netflix.

Daniel Spisak

I disagree, these job requirements sound like someone intended to make software to add DRM to Tivo for a Netflix based net delivery service to the devices.

Jesse Kopelman

I think the big question boils down to economics. At what point is it cheaper to deliver over the Internet than it is through the USPS. A bittorrent-style distribution method would help, but that would require special deals with content providers, or a very complex software solution to insure that the number of user-end copies corresponds exactly to a number of DVDs purchased by NetFlix. Either way, it seems you need a set-top box. If this were a single function device (i.e. NetFlix player only), that is a hard sell. At the very least I think you need DVR functionality and that is why a hookup with TiVo made a lot of sense.


Among certain circles it is widely known that Netflix has built a set top box and is working on cutting deals with bandwidth providers. The larger questions are not whether they will build a box but if they should and how do they intend to get access to the content. Does it really makes sense for a consumer to need another set top box just to order movies from a specific content aggregator

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