Is the Netflix Button a Threat to Regular TV?


You want further proof that Netflix (s NFLX) has become mainstream? Pretty soon you’ll need look no further than your remote control.

Netflix announced this morning that it’s working to make its ubiquitous streaming service even easier to access on connected devices, by adding a “Netflix button” to remote controls from major consumer electronics manufacturers. By doing so, its subscribers will have one-click access to their instant queues and personalized recommendations. It could also serve as a threat to more traditional TV services, as consumers will now be just a click away from alternative online content.

The introduction of a Netflix button highlights how popular the subscription service has become in recent years; Netflix is the one must-have content provider for CE manufacturers looking to add online video offerings to their devices. Its availability on more than 250 different connected devices has helped grow its subscriber base to nearly 17 million users by the end of the third quarter, which is up from 11 million subscribers a year earlier.

Netflix says the new button will be featured “prominently” on remote controls for Blu-ray players from Best Buy’s (S BBY) Dynex brand, Haier, Memorex, Panasonic, Samsung, Sharp, Sony (s sne) and Toshiba; TV remotes from Sharp, Sony and Toshiba; and controls for set-top boxes from Boxee, Iomega and Roku.

But how powerful is placement on a remote control? From a marketing perspective, it seems like a coup, as remote control placement is bound to bring in new TV buyers to try out the service. The Netflix button also could serve as a threat to more traditional TV, as very few content channels become ubiquitous enough to warrant placement on the remote control. You don’t see ABC (s DIS) or CBS (s CBS) commanding a position on TV remotes, after all.

Set-top boxes from cable providers typically ride on Input 1 and their content is the first thing most subscribers see when they turn on their TVs. Changing to another video source — like a Blu-ray player or game console — typically requires changing inputs, and even navigating to online content like Netflix or Hulu Plus means jumping out to a different navigation screen. But for consumers that buy upcoming TV sets from selected manufacturers, that will no longer be the case; getting to Netflix streams will be as easy as navigating up or down on the channel lineup.

For broadcasters, that fight for preferred placement in cable program guides, and for cable companies themselves, the ability for consumers to click away to an online video source, without having to navigate additional menus, could be troubling. Netflix has been cited as one reason that consumers choose not to pay for cable. The presence of a Netflix button underscores just how much of a threat online video in general, and Netflix streaming in particular, has become to regular TV.

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Steve Silver

This is a smart move however when was the last time one used the remote from a television? Most consumers use the remote that comes with their Cable TV set top box. Now if a Netflix button shows up on a set top remote one will have to take note. Or better yet if a Netflix button shows up on an XBox game controller one would really have to take notice.

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