Program goals

Second, a number of firms were beginning to offer video on demand (VoD). Netflix announced its own internet service in January 2007. The service complemented the existing subscriber service, generating no new fees. Netflix had budgeted $40 million to develop the system, but some analysts questioned whether that was sufficient to cover server data centers and licensing fees. Others argued that VoD would kill off the DVD rental business in general and that, for all its operational savvy, Netflix’s time had passed.