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Netflix (NASDAQ:NFLX) is kicking major ass. In many respects, it’s reminiscent of how Apple (NASDAQ:AAPL) stormed onto the music scene with iTunes.

Looking ahead, what cat can Netflix pull from their hat? FREE movies.

Free Movies on Netflix

I had a great comment on my previous Netflix post (see “Is Netflix Repricing TV to What the Market Will Bear?“) from long_on_oil who noted a free subscription to Netflix makes perfect sense:

If I ran Netflix I would offer the free streaming account and I would insert a commercial at the beginning of the video and every 20 minutes there after. One to two minute [commercials] and no more.

This model has worked for television for decades. Why hasn’t Netflix used commercials to subsidize content costs?

Free Movies Could Stress Netflix Infrastructure

I’m guessing the only reason Netflix hasn’t yet offered a free tiered streaming movie subscription is infrastructure. Last month Netflix admitted they weren’t happy with the delivery quality from digital distribution giant Akamai (NASDAQ:AKAM). So, any great strategist would wait to solve this issue before adding a tsunami of new stresses to the system.

Once Netflix ramps up and offers streaming movies and television for free (with commercials), I’d say you just might hear a death knell for cable and satellite. (See “INTERACTIVE: Join My Journey to Ditch Cable/Satellite for Internet TV“)

Source: Will Free Netflix Subscriptions Be the Death Knell for Cable?