by Tom Kaneshige

Netflix Missing the Boat by Waiting on iPhone App

Sep 22, 2009
MobileSmall and Medium Business

CEO Reed Hastings says mobile isn't in the short term.

Watching a movie on the iPhone on the road sounds like a last-ditch way of passing the time, given the iPhone’s tiny screen (relative to, say, a 17-inch MacBook Pro). But I’ve found the experience pretty good. I’ve watched a range of movies, from Office Space to the Godfather, during long commutes.

While on flights, for instance, I like the fact that the iPhone is much more convenient to whip out and watch a movie instead of pulling out the laptop from overhead storage and fitting it on the tiny tray table. If you’re a night owl like I am, it’s easy to stay up and watch a movie over the iPhone with ear phones without disturbing your significant other.

So it was odd to read a Reuters story about Netflix facing tough competition in the emerging Internet video space—Youtube, Amazon, Hulu—and yet CEO Reed Hastings saying that mobile was something Netflix “will get to eventually.” Will there be a Netflix iPhone app? “It’s something that will likely come over time,” Hastings said. “But nothing in the short term.”

Over time? Netflix had jumped on the changing video landscape by delivering DVDs to homes and streaming movies. Its visionary approach wreaked havoc on the status quo, especially for venerable movie rental store chains such as Blockbuster. The latter’s slow move to digital delivery (along with debt weighing on its balance sheet) eventually led Blockbuster to declare that it will close up to 960 stores throughout this year and next, more than twice the number of planned store closings.

But now Netflix looks behind the times—or, at least, where the times are going. “There will be people doing DVD-by-mail in 15 or 20 years, so I think DVD will last a long time,” Hastings told Reuters. Netflix is focusing on TV, Blu-Ray and video game consoles like the Xbox Live system ahead of mobile.

Sure, a move to the iPhone won’t be easy given Apple’s penchant for exercising draconian controls and terms over the App Store. Still, mobile movies will be much more than a niche down the road, as well as on the road, and Netflix would do well by getting ahead of the trend.

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