DVDs await shipment at the Netflix.com headquarters
DVDs await shipment at the Netflix.com headquarters - 

TEXT OF STORY

BOB MOON: And, yet another sign of things to come: Netflix is moving toward selling movie downloads. Until now, it's relied on delivering movies through the mail. As Nancy Marshall Genzer reports, this could be a way of defying critics who've been predicting the company's demise.


NANCY MARSHALL GENZER: Netflix will offer a thousand movies and TV shows over the Internet, compared to more than 70,000 titles available by mail.

Netflix plans to introduce the new system to about 250,000 subscribers at a time, but they'll only be able to access it on PCs. It won't work on Apple computers or on iPods or cell phones.

Still, Gary Arlen of Arlen Communications, says it's not clear people want movies on their phones or iPods.

GARY ARLEN: The research we've done so far suggests that cell phone or handheld at this time is limited to very short-form content — either sports highlights, newscasts, You-Tube kind of short videos.

Analysts are keeping a close eye on how investors will react to the new Netflix service, which will cost the company about $40 million.

In Washington, I'm Nancy Marshall Genzer for Marketplace.

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