It seems Netflix has already reached a tipping point in the consumer electronics market, as it signed up five more CE manufacturers to enable its streaming services on their devices. Panasonic, Sanyo, Sharp, Toshiba and Funai (the CE maker behind the Philips, Magnavox, Sylvania and Emerson brands in the US) have all agreed to add the Netflix “Watch Instantly” streaming service to some of their Internet-connected HDTVs and Blu-ray players.
Netflix streaming has become nearly ubiquitous on consumer electronics devices in the past few years; the service was already available on a number of devices, including the Roku Player; Microsoft Xbox 360 and Sony PlayStation 3 gaming consoles; Blu-ray players from Insignia, LG, Samsung and Sony; Internet-connected TVs from Insignia, LG, Samsung, Sony and VIZIO, and TiVo DVRs. Altogether, Netflix expects to have its streaming service on more than 100 different CE devices this year.
The company has been heavily pushing its streaming service, as opposed to its DVD-by-mail offering. Last month, for example, the company made the tab for its “Watch Instantly” streaming service the first thing users see when they log on to Netflix.com, as opposed to the DVD section users previously saw. Being on more CE devices means even more potential customers streaming video as opposed to waiting for DVDs to show up by mail. According to a recent study, 62 percent of Netflix subscribers had tried out the “Watch Instantly” service, and more than half — 54 percent — stream Netflix titles at least once a month.
That’s good news from a financial point of view, as streaming video comes with a much lower delivery cost than shipping discs. According to Netflix CEO Reed Hastings at NewTeeVee Live, the company spends about $600 million a year on postage for its mail-order business, but the cost of streaming a video title is much cheaper than delivering a DVD by mail — about 5 cents a gig for bandwidth — or about a nickel per movie.