Netflix smart deal with LG Electronics

When I posted about the Netflix deal with TiVo, I thought that was a loser but this one makes sense. Here, LG allows people who buy their TVs to connect to Netflix without an external box.  TiVo like Netflix is a subscription service with a very similar business model but LG is a manufacturer working with a software service provider and that has much more potential. 

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Netflix: No More Used DVDs for Sale

The way of floppy discs?

Selling them to wholesalers?  Increasingly the company is moving away from dvds having made deals to stream with Tivo and Samsung recently as well as LG Electronics and Roku.  See press release here.

It will be interesting to see how this pans out for Netflix.  They have no choice but to move in this direction but what made them successful was quick rentals without late charges through the mail.  They had an idea and a distribution efficiency that put them ahead.  Now what do they have?  An extensive library and a good website as well as branding and a customer list but if as the technology improves, well that be enough?  Aren’t they just a middleman that is easily circumvented?