One of the presumed targets of Best Buy’s new CinemaNow store is by-mail and streaming giant Netflix. According to The Motley Fool, however, it’s not Netflix that should be worried about the new service, but other video renters, including Redbox.
Here are the reasons cited by the Fool why Netflix (and its investors) should welcome rather than fear the launch of the CinemaNow service:
- A wider range of devices that can play CinemaNow videos will also be fertile ground for Netflix to insert its own video platform. Would you rather buy a Blu-ray player that supports one digital video service, or a player that offers all of the important ones? Healthy competition will help the addressable market grow.
- The pay-per-rental model fills a different niche than Netflix subscriptions, and I think Best Buy is more likely to expand the total digital video market than to steal customers from Netflix. Investors in Blockbuster and Redbox operator Coinstar should be much more worried, because Best Buy is aiming at the heart of their market.
- The more, the merrier! If CinemaNow gains traction with consumers, the studios will have one more data point showing that video downloads work as a business. In the end, Netflix and everybody else will benefit from a more open licensing environment and wider market acceptance of the whole digital concept.
What do you think, Insiders? Do Redbox and ailing Blockbuster have a lot more to worry about than Netflix? If it’s successful, will CinemaNow help usher in the digital era more quickly? Give us your take in the comments.
(via The Motley Fool)