Forget TV Everywhere, How About Netflix Everywhere?
It seems Netflix has already reached a tipping point in the consumer electronics market, as it signed up five more CE manufacturers to enable its streaming services on their devices. Panasonic, Sanyo, Sharp, Toshiba and Funai …
Context & Ripple Effects
The 2008 partnership with LG to stream movies straight to the TV was a single-manufacturer experiment; two years later Hastings framed the strategy openly with his September 2009 black-box launch and the "Netflix Everywhere" pitch that cable is history. Today's announcement converts that thesis into scale: Panasonic, Sanyo, Sharp, Toshiba and Funai all join the roster, meaning Netflix's streaming app ships inside TVs from most major Japanese CE brands rather than requiring a separate box.
The breadth matters because it lands at CES season, when TV makers are deciding which internet features differentiate their sets — the same week Panasonic and LG confirmed plans to build Skype calling into televisions, signaling that connected-TV features generally are becoming the 2010 selling point.
First-order effects
- Buyers of new Panasonic, Sanyo, Sharp, Toshiba and Funai TVs get Netflix streaming built in, removing the set-top-box step that previously stood between subscribers and the living-room screen.
- Netflix's addressable base expands to every household replacing a TV in those brands' lineups, without the company subsidizing hardware as it did with its own streaming device.
Second-order effects
- TV makers who have not signed Netflix face a feature-gap question at retail, pressuring them to strike deals either with Netflix or with competing internet-video services to keep their sets competitive.
- Pay-TV operators promoting 'TV Everywhere' authentication now compete at the point of television purchase itself, since a new set arrives pre-loaded with an on-demand rival that needs no cable subscription.
Third-order effects
- If every TV ships as an app platform, control over the living-room interface shifts from cable's rented set-top boxes to CE manufacturers and whichever services they preload — weakening the pay-TV bundle's hardware lock-in.
- The pattern points toward content services negotiating placement deals with device makers the way they once negotiated carriage with distributors, making CE partnerships a standard go-to-market channel for streaming video.
The trend: Internet video services are embedding directly into consumer-electronics hardware, shifting living-room distribution power from pay-TV set-top boxes to TV manufacturers and the apps they ship with.