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Netflix offers online-streaming-only plan

Packages of DVDs await shipment at the Netflix.com headquarters in San Jose, Calif.

TEXT OF STORY

Tess Vigeland: Netflix has long been synonymous with DVDs by mail. But today, the company took a big step toward ditching those red envelopes.

It's offering a plan that will give users unlimited movies and TV shows at one low price -- but only through online streaming. After all, said one of our producers today: It's called NETflix, not movies-by-mail flix.

Marketplace's Jennifer Collins reports on whether this is the future of entertainment at home.


Jennifer Collins: Netflix certainly hopes it is. Two-thirds of its users have already streamed a TV show or movie. Porter Bibb is with MediaTech Capital Partners. He says consumers are deciding right now whether cable or Internet companies will provide their content going forward.

Porter Bibb: It's a major battle and we're at a tipping point now.

Netflix has 16 million subscribers -- more than any of its rivals. And media analyst James McQuivey says those subscribers are not always the tech-savvy 18-year-olds you might expect.

James McQuivey: The people who are streaming the most, it's because they have children at home. They're watching an immense amount of "Pink Panther." They are watching a tremendous number of Disney programs.

Like one of this year's releases:

Clip from "Alice in Wonderland": Alice. You're terribly late you know.

"Alice in Wonderland" is actually late. The movie was out on DVD for several months before Netflix started streaming it. And analysts say Netflix will have to shorten those kinds of delays to stay in the battle.

I'm Jennifer Collins for Marketplace.

About the author

Jennifer Collins is a reporter for the Marketplace portfolio of programs. She is based in Los Angeles, where she covers media, retail, the entertainment industry and the West Coast.

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