Why Is Netflix Afraid of Mobile Streaming?

With mobile platforms on the rise, and almost half of Netflix customers streaming movies online, the company is taking its sweet time to bring the two together.

Blockbuster's announcement Wednesday that they have a new streaming app for mobile phones is a reminder that Netflix has been lagging on their own promise to bring mobile streaming to life.

Blockbuster, which announced last week that it might have to file for Chapter 11 bankruptcy protection, has long played catch-up with Netflix. Netflix launched its subscription service in 1999, and had more than a million subscribers when Blockbuster finally launched a competing service five years later. Netflix went live with its movie-streaming feature in 2007; Blockbuster's service went up a year and a half later.

This is why it's odd that Blockbuster beat Netflix to the mobile-streaming punch, albeit with a roll-out that is limited to a single phone model on T-Mobile's network.

Shouldn't mobile streaming be the next step for the company? Netflix CEO and founder Reed Hastings doesn't think so. He told the Wall Street Journal in January that big devices are the priority: "Until we get our TV ubiquity and our Blu-ray ubiquity and we are getting close on video game ubiquity we would next turn to the small screen." (On Thursday, the company told customers with Nintendo Wii's that a disc with software that enables Netflix on the device was in the mail.)

Netflix is working on mobile, but they're in no hurry. Earlier this month, the company surveyed customers on whether they would use an iPhone app to stream movies, although it seems that such a feature may first come to Windows Mobile users by the end of this year.

By not making mobile a priority, Netflix is letting others creep into the market. On Wednesday Fox Mobile Group announced a new mobile video-streaming service that will provide access to content from Fox, NBC Universal, and Discovery. And, on Tuesday, mobile entertainment startup mSpot announced that it was bringing its mobile service to Netflix's home turf, the Web.

The service currently runs on 50 devices and most major mobile operating systems and it includes movies from Paramount, Universal, Image Entertainment, and Screen Media Ventures. mSpot isn't a serious Netflix competitor right now, but isn't that how the story always begins?

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Niraj Chokshi is a former staff editor at TheAtlantic.com, where he wrote about technology. He is currently freelancing and can be reached through his personal website, NirajC.com. More

Niraj previously reported on the business of the nation's largest law firms for The Recorder, a San Francisco legal newspaper. He has also been published in The Hartford Courant, The Seattle Times and The Age, in Melbourne, Australia. He's also a longtime programmer and sometimes website designer.

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