[Netflix] stocks just about all of the 60,000 movies, television shows and how-to videos that are available on DVD (and that aren't pornography). [...] Out of the 60,000 titles in Netflix's inventory, I ask, how many do you think are rented at least once on a typical day?
The most common answers have been around 1,000, which sounds reasonable enough. Americans tend to flock to the same small group of movies, just as they flock to the same candy bars and cars, right?
Well, the actual answer is 35,000 to 40,000. That's right: every day, almost two of every three movies ever put onto DVD are rented by a Netflix customer. [...] So, while the studios spend their energy promoting bland blockbusters aimed at everyone, Netflix has been catering to what people really want — and helping to keep Hollywood profitable in the process.
Source: NY Times.
Meanwhile, people are expecting the convenience of downloading movies to break Netflix. The movie studios even setup their own attempt at a movie iTunes, called Movielink. And Comcast is pushing video-on-demand. Netflix should die, right?
Nope. Movielink only has about 1500 movies; Comcast has about 800. And why is that?
The studios have sold the exclusive digital rights for most movies (which don't apply to physical DVD's) to a television channel, like HBO. The agreements last for years and, since they bring in millions of dollars, the studios aren't about to stop signing them.
The studios have tied their own hands. They can't supplant Netflix, not without changing an existing - and lucrative - side of their business.
So Netflix will probably continue to grow. :)
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