Netflix Future - Digital Streaming

I'm basically just days away from making my first television purchase ever (seriously...up until now i've been able to survive off of hand-me-down sets). For the last three years or so, i've been fighting the beast within me who has been screaming for me to make an HD TV purchase...and it would appear that the beast is about to win the argument.

I use a DVR to enhance my viewing experience. There are a lot of different shows i like to watch, and i don't enjoy being a slave to the prime-time cable schedule. My DVR of choice is Tivo. I like Tivo because of its relative ease of use, and because it has more customized features than a generic DVR one could recieve from his cable company. Because of this, I'm going to need to upgrade from the Tivo i currently own to a Tivo of the HD variety. I can't possibly be expected to record my shows in SD format now (blasphemy!).

The HD Tivo includes a feature that will enable me to watch Netflix content on my television. I have used Netflix's streaming video feature online before, but now i can pull the video directly onto my TV. I don't know how you feel about this, but quite frankly, the couch is a much more comfortable area from which to view a flick than my computer chair.

This feature led me to a question I have been pondering…at what point will Netflix (or similar services) be delivered purely through streaming video? How far away are consumers from truly being able to discard tangible discs for video, in much the same way that many have discarded CDs for music?

Currently, Netflix has a large catalogue of online film/television content and it continues to grow, but not yet to the point at which they could eliminate DVD mailings. This digital catalogue is likely limited by the lack of rights/royalty agreements for certain films, but it is still a fairly wide selection.

In addition, there may be some titles that Netflix does not want to stream, the fear being that this could cut into profit margins. Overhead costs for a business like Netflix would presumably consist of a lot of postage for the physical discs, and would present itself in the form of bandwidth costs, i suppose, for their streaming content. Just as 24-Hour Fitness makes money by relying on many of its members to avoid the gym regularly, Netflix turns a profit on the similar theory that many of its members will not return their DVD/blu-ray discs in a timely manner (lower postage costs). The easier it is to receive the films (streaming), the more likely one would be to watch more (increased bandwidth costs).

If you were already a Netflix subscriber, would you pay more for online streaming's ease of use?...at least, initially? I think i would consider it.

Another obvious obstacle is that Netflix streaming is only presently available in Standard Definition (streaming video in HD is problematic due to bandwidth issues/costs). However, with advancements in technology being made at such a rapid pace right now, i fully expect issues with bandwidth to be resolved shortly (check out this video on the subject of HD streaming from HowStuffWorks.com).

Netflix also recently announced that it has teamed up with LG Electronics to enable some LG HDTVs to have Netflix streaming software embedded directly into the TV, requiring no external device to instantly view their content. This may sound a little gimmicky, and it is. However, if it assists in propelling LG sales beyond its competitors while further increasing Netflix's notoriety, I'm sure neither company will be disappointed.

It's an extremely exciting time to be around as far as technology and its entertainment/convenience applications are concerned. The geek in me is really looking forward to posting additional thoughts about tech toys and future advancements.

Let me know what you think about the future of tech toys and the differing ways in which you envision the masses being entertained?