Dan Rayburn

Netflix's New Digital Distribution Will Improve the Bottom Line

The cost to Netflix to license and encode all of this content and pay Limelight Networks to store and stream all of these video is not cheap, let alone the development costs for the player and interface. Today, it is not improving their bottom line, far from it. They are spending a lot of money to make this happen and will have to continue to sink a great deal of money into this for some time to come. Not a bad thing, as they are planning for the future, but it is not improving their bottom line anytime soon.

This is the main reason why to date, Netflix will not break out any of their costs around their digital distribution offering.