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Netflix, Inc.: Is ‘Watch Offline’ Feature the Next Big Step for NFLX?

After years of saying no, NFLX is softening its stance on offering an offline video option in addition to streaming

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In the last few days, Netflix, Inc. (NFLX) stock has taken a beating on a forecast of weak subscriber growth. Customers are ticked as a previously announced price hike kicks in and the company started actively blocking VPN users in Canada.

Adding to the hurt, Amazon.com, Inc. (AMZN) announced it would begin offering its Prime video streaming as a standalone monthly service for the first time, with aggressive pricing.

Finally allowing its customers to watch offline could be just what Netflix needs to turn things around, and the company is now softening its hardline stance against the feature.

The ability to download video to watch offline is consistently one of the most requested features for any video service. From a customer point of view, the option makes sense. Streaming HD video can use a lot of bandwidth and any time you leave your home Wi-Fi network, there’s a pretty good chance that bandwidth turns into mobile data use.

Why Netflix Needs ‘Watch Offline’ Feature

I’ll offer myself up as an example of why offline video appeals to many people.

Three kids in the family vehicle on lengthy drives for vacations or weekend trips, each kid clutching an iPad and watching movies when the highway scenery gets too boring.

Streaming HD movies over a mobile network is data intensive (a typical HD movie might be anywhere from 3GB to 5GB in size), and nothing would set up howls of complaints like driving through areas where spotty cellular service leaves the streaming video hanging.

When you arrive at a destination and someone decides they want to catch up on a favorite show that’s not offered on the hotel’s cable package and fires up Netflix, the results can be subpar. Hotel Wi-Fi is often an extra cost and is notoriously slow.

It’s true that many U.S. carriers offer unlimited data plans — so three 5GB movie streams every few hours wouldn’t necessarily result in a massive bill — but not everyone is able to shell out the $75 to $100 a month for these plans. And most of them start throttling your data once you go over a certain amount.

After 22GB of data in a billing cycle (which isn’t that much if you make a habit of watching HD Netflix movies on the go), AT&T Inc. (T) starts throttling. And you still have areas of poor LTE coverage to deal with, along with the cost of roaming if you happen to cross a border and binge on Netflix video.

In our case, we buy movies through Apple Inc.’s (AAPL) iTunes and load them on everyone’s devices. We still have a Netflix subscription for home use, but offline video is the way to go when you’re on the move — no data use and no worries about cellular service. You can watch video on a plane, train or in an automobile.

In the past, Netflix has been adamant about not letting its subscribers watch offline. Last September, Gizmodo spoke to NFLX about offline video and was told that the ability would add complexity to the Netflix experience, confuse customers and lead to “paralysis,” where some subscribers would have no idea what to do.

Offline video was a firm “no.”

There is definitely potential for confusion. Amazon Prime offers the ability to download offline video, but the rules vary depending on the content. Rights holders to the movies and TV shows available for streaming on Prime can dictate which content is actually downloadable, how long it can remain on a device and how much content you can have pre-loaded at a time.

On the technical front, there would be no real additional investment required by NFLX, although content rights would need to be re-negotiated and are likely to result in a similar situation to Prime.

At the very least, Netflix’s own shows would be a no-brainer for being able to watch offline.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/04/netflix-watch-offline-nflx/.

©2017 InvestorPlace Media, LLC