Mister Mike

Roku Adds HD Streaming and SD Upscaling, But Drives Netflix's Costs Up

While increased IP delivery will increase costs, they will be partially offset by lower mailing costs. Eventually IP delivery will be a LOT cheaper. However, the real issue is that anyone can deliver IP TV/movies if they can get over the final 'connect to the TV' leg of the delivery path. Whoever does that wins the war and becomes ubiquitous. Netflix's 'free' approach just about guarantees them victory, at which point a new price model will evolve. For example, 'free' for the 12K movies now available, $10/month for about 15 online movies a month from the full catalog, and $20 for unlimited viewing-full catalog. This will eventually generate more money for all the players in the food chain than they are making today.