Bytes of Netflix Digital Plans Begin Downloading to the Blogosphere

By Davis Freeberg

Editor's Note: Davis is both a Netflix shareholder and customer

For those of you who've followed Netflix's download plans you know that the development of the Netflix player has been as slow as trying to download an HDTV feature length film over an AOL dial-up connection. Netflix originally had made plans to try and offer films through the TiVo service, but that plan was shelved after they found that the studios were about as warm to the idea as an Eskimo in the middle of an artic winter. Without the licensing rights from the studios, I had eventually written off the Netflix player as vaporware after the company admited that they had to push pause on their download plans late last year, but it does appear that there still may be hope for digital enthusiasts.

Despite not being able to gain traction on licensing deals with studios, Netflix has continued to press on with downloading and on their most recent quarterly earnings call, Reed Hastings said

"We talked on the last call and in subsequent investor presentations about the Internet and content challenges that prevent large, near-term movie downloading adoption. We won’t repeat them here, but we do believe we are making significant progress on our download efforts. By the end of this year, we will communicate a clear timeframe for launching the additional option of internet delivery for Netflix subscribers."

Over the last several months I have seen a number of job postings by Netflix hinting at what some of their downloading plans might be included a position for a Sr. embedded software engineer as well as a position for digital content processing. According to their job posting, it sounds like Netflix is continuing to work on the pieces to build their download service.

"Netflix is creating and maintaining thousands of digital content items, amounting to terabytes of data that must be processed every day. The efficiency and scalability of the process is central to the success of Netflix’s electronic delivery service."

Looking at the job boards can help give an idea of what Netflix is working on, but it doesn't answer the question of when we should expect to be able to swap our bittorrent memberships with a better legal alternative. Fortunately, Dave Zatz tipped me off to an interview that Reed Hastings gave with BusinessWeek. In the interview Hastings says that we should expect to see a download service by the end of the year.

"Hastings is hedging his bets by expanding Netflix into niches that will help it maintain an edge as new rivals emerge. He's positioning it as a film investor and source of high-quality content -- like Home Box Office for DVD rentals. He also wants to be a player in Web distribution, which it will launch by year end even though Hastings thinks the market for downloading will be tiny for years."

The article doesn't make any mention of Netflix having made any deals with the studios, but it does say that the company has secured downloading rights on 90 independent films and Ars Technica is out with a great article on Cinequest and their own plans for indepedent downloads. In the article, Arstechnica talks about Cinequest's plans to serve as a clearing house for independent artists that want to bypass the traditional studio route. Cinequest plans to rent their downloads for $1.99 for three days or $4.99 if you want to burn a copy of the film. While the article does not mention as to whether Cinequest is a download partner or a content partner, it does point out that Cinequest has a distribution deal in place with Netflix.

If Business Week is right and we see the Netflix player released by years end, it would be an exciting development for the company. Demand is there for movie downloads, but the studios have been reluctant to give up the fat DVD margin business for a pay per view business model. If the Hollywood studios don't want to provide a digital solution for their consumers, then I will be happy to take my business to independent filmmakers who need the support. Hopefully, we will hear more about Netflix's downloading dreams in the future, but in the meantime at least there is a little packet of data to still give me hope.