Red Envelope Madness!

Thursday, February 17, 2005

SBC to offer video on demand

Per MSNBC , telecom giant SBC plans to offer broadband subscribers the ability to download up to three mvoies at a time to their digital video recorder and replace them when they are finished viewing them for a flat fee of about $18 per month, later this year.

The Netflix reaction: "A Netflix spokeswoman said the company does not believe SBC and others will represent a significant threat to its basic business for at least five years. That's not because of technological barriers, but economic ones.

'The studios have an exclusive window on DVD rentals and DVD sales. The money they make on rentals is far more than they make on Internet delivery of movies or content,' said Shernaz Daver, spokeswoman for Netflix. 'If you look at Comcast or anyone, what they are offering to date to be downloadable is their old content -- their collection -- not their newest releases.'

Daver said the company believes that while Internet deliver will eventually emerge as an important method of getting films to customers, DVD's will remain the primary form for the remainder of the decade because that's where studios can make the most money.

'DVDs will remain the predominant mechanism for delivery for the next five years,' she said noting Netflix has nearly 3 million customers and an offering of 30,000 titles. 'That's not something that any of these companies can offer today. Can they do it in the next five to 10 years? Probably, and that's the reason we are going to be offering some kind of digital media this year.' "

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