Yesterday we took note of an early report from Variety about Netflix’s digital addition to its DVD rental business. Now that all the major news outlets have taken their turn, we’ve learned a few more details about the cost and logistics of the new “Watch Now” service.
While the dynamic streaming setup and the lack of an additional fee are impressing, “Watch Now” is mostly seeing skepticism. Netflix shares are trading at three times normal volume, but not doing anything terribly exciting. They jumped as high as 6 percent today, but are currently trading up $0.20 at $22.91, not even recovered from an analyst downgrade hit on Friday.
First up, the Hollywood Reporter has the most precise investment breakdown we’ve seen.
Netflix has been developing the service for about two years. It spent $5 million-$10 million last year and will spend up to $40 million this year as it rolls it out during a six-month period.
In addition to confirming that the system is Windows-only, The AP reports,
Netflix expects to introduce the instant viewing system to about 250,000 more subscribers each week through June to ensure its computers can cope with the increased demand.
And Netflix CEO Reed Hastings gives the New York Times his own assessment of the relative significance of the announcement:
“The market is microscopic,” Mr. Hastings said. “DVD is going to be a very big market for a very long time.”
If any Netflix subscribers out there want to do a guest post about their access to “Watch Now,” please drop us a line.