Netflix-Relativity Deal: Another Nail in Blu-ray's Coffin

Tuesday's announcement of a content-streaming deal between Netflix and Relativity Media, the latter a Hollywood production company that makes mainstream flicks such as "Get Him to the Greek," "Grown Ups," and "Robin Hood," is welcome news for subscribers of the movie-rental service. It means that Netflix members will be able to stream Relativity titles to their TVs and computers sooner than before. Rather than waiting (in some cases) years after a movie's DVD release before they can watch the title online, members will only have to wait months.

OK, if you're the instant gratification type, that's still a long wait. But online streaming is moving in the right direction, and the Relativity pact is likely the first of similar deals between Netflix and Hollywood. Previously, recent films (such as the 2010 titles above) might have been entangled in long-term agreements with pay-TV channels such as HBO, Showtime, and Starz. The new agreement shortens the streaming delay considerably, albeit for a select number of titles.

Content Cornucopia

If you're not familiar with Netflix, here's how it works. Subscribers pay $9 per month to stream more than 20,000 movies and TV shows, and they can also rent one DVD at a time. For an extra $2 a month, they can get Blu-ray discs too. (Pricier options let them rent multiple discs at once.) Netflix has more than 13 million subscribers.

Netflix's two-tiered approach to movie distribution--discs and streaming--is appealing to consumers, most of whom probably have a DVD player as well as a streaming device, be it a set-top box, game console, Internet-ready TV, or Blu-ray player, in the living room. And while Netflix got its start by delivering shiny plastic discs via snail mail, it has made it clear that online streaming is the future.

"Our continued goal is to expand the breadth and timeliness of films and TV shows available to stream on Netflix," said Netflix official Ted Sarandos in a statement. "Historically, the rights to distribute these films are pre-sold to pay TV for as long as nine years after their theatrical release. Through our partnership with Relativity, these films will start to become available to our members just months after their DVD release."

Blu-ray, We Hardly Knew Ye

So where does this leave Blu-ray? The high-def successor to DVD has its proponents certainly, some of whom see the format as a great way to bring 3D entertainment to the home. But the consumer demand for 3D TV remains questionable, and Blu-ray is increasingly looking like an anachronism in today's online-oriented world. Content deals like today's Netflix-Relativity pact highlight the growing importance of the Internet as an entertainment-delivery system. It also gives consumers yet another reason to pass on that bargain Blu-ray player at Costco.

The fact that many new Blu-ray players have built-in Internet streaming (with Netflix access) is a good indication of their true value. Soon, I suspect, they'll be used more as set-top boxes to access online content rather than as disc players.

Contact Jeff Bertolucci via Twitter (@jbertolucci ) or at jbertolucci.blogspot.com .

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