It’s a little early for that and it might turn out to be unnecessary. There’s too much content that isn’t available streaming. As much as I would like to stream everything, I find that a lot of what I want to watch isn’t available.
Netflix has made acquiring a box so easy that you can do it almost by accident. Buy a DVD player, Xbox, Playstation, Wii… chances are you already have Netflix streaming. It also saves the hassle of setting up another box and having another remote control — which are significant challenges when it comes to the general population.
Creating a proprietary box would create competition with companies that have distribution already. Why would Roku continue to distribute Netflix if they were competing with Netflix on hardware?
Netflix is also trying to use pricing to encourage consumer adoption. Plans with DVDs are more expensive than plans without. Netflix is also using recommendations and UI to shape demand for content. (I’d love to know Netflix A/B testing results on whether to show “DVD Only” when people search for content on streaming devices.)
If I were are at Netflix and I wanted to experiment with sending out boxes, here’s what I’d do:
- Identify which users do not have streaming devices. (No need to subsidize those who don’t need it.)
- Among those users, identify users who are primarily ordering DVDs whose content is also available on Netflix streaming. (They have a substitute available.)
- Among those users, identify those who are frequently ordering DVDs. (Cost savings of not mailing to them is material.)
- Send them email offers with varying discounts for a Roku box, fulfilled either by Roku or by Amazon.
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