It comes as a “no duh” that Netflix is winning the battle to get customer’s mindshare when it comes to digital video.  Their strategy of embedding on pretty much every single device that is being manufactured is paying off handsomely.  I wouldn’t be surprised if my next toaster came with a Netflix app.

As I’ve written about, Amazon has entered the fray and is even providing a better value for the money versus Netflix.  But Netflix’s everywhere strategy has landed them a 61% chance that any given (legal) movie stream or download is coming from them.  Ouch to Amazon as they try to capture share.

But the point here isn’t so much about Amazon or Netflix, but rather about the up and coming UV service.  And once again I pose the question: how are they going to make some real noise in the marketplace in order to be heard?  With Netflix everywhere, and Amazon planning to get to everywhere, how on earth can UV wiggle into the fray and expect to come out with any meaningful share?  It’s a daunting task to say the least.  And it’s even further complicated by the Byzantine rules that customers will have to follow in order to enjoy their content.

As you breeze through the attached article which talks of the battle between Amazon and Netflix, think of little ‘ol UV.  What will they do to be heard above these titans?

The digital video market continues to grow as DVD sales tank, and Netflix is currently king. According to the latest data from the NPD Group, there’s a 61 percent chance that any given (legal) movie stream or download is coming from Netflix. Netflix’s aggressive strategy of being on every device and set-top box is apparently working, and Amazon clearly has a long way to go if it wants to really compete on the instant streaming front.

After Netflix, NPD says Comcast made up another eight percent of “digital movie units,” while DirecTV, Time Warner, and Apple all shared the third-place spot with four percent each. NPD’s data was collected from 10,618 US-based Internet users over the age of 13 between January and February of 2011.

The firm combined all legit online movie services in order to come up with its numbers, but pointed out that customers do seem to know the difference between “electronic sell-through” (EST, also known as downloads), Internet video on demand, cable video on demand, and streaming services. Customers apparently recognize that services like iTunes (which NPD categorizes as EST) offer the most current releases, “while Netflix streaming gets credit from customers for providing the best ‘overall shopping experience’ and ‘value for price paid.'”

Instant gratification appears to be what’s pushing customers to favor digital video—whether it’s from Netflix or another source—over DVD and Blu-ray. “Overwhelmingly digital movie buyers do not believe physical discs are out of fashion, but their digital transactions were motivated by the immediate access and ease of acquisition provided by streaming and downloading digital video files,” NPD entertainment analyst Russ Crupnick said in a statement.

That’s the angle that Amazon is going for with its recent rollout of Amazon Instant Video. At $79 per year, Amazon’s offering is cheaper than a year’s worth of Netflix (which is $95.88 per year on the streaming-only plan), but Amazon’s library is still considerably smaller than Netflix’s. That’s in addition to the fact that Netflix subscribers can stream videos to practically every popular device that they would want to use—iOS devices, Android devices, Roku boxes, Apple TVs, Xbox 360s, and more. Amazon, on the other hand, claims that there are almost 200 Internet-connected Blu-ray players, TVs, and set-top boxes that can play videos from its new service, but aside from the Roku, most are relatively obscure.

Amazon clearly wants to compete with Netflix, but it will have to step up its game if it wants to chip away at Netflix’s dominance in the digital video market. Indeed, Amazon needs to edge past iTunes and the various cable offerings to even show up on the leaderboard, so the team had better get cracking  to get more content online and deliver it to more places.

What will UV need to do in order to compete with this?


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