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Tivo is planning to do video on demand as well. I currently have a Tivo box with a wireless network connection because I would have had to run a phone line from the opposite side of the room. So all that needs to happen is for Tivo to update the software on my Tivo unit, and I have video on demand on my TV (this isn't happening any time soon though). Cable companies are also doing the same thing with digital cable. So you don't have to have a high speed internet connection to get video on demand. Netflix is also plowing cash into developing their own video on demand offering.
So who will be the winner in the future? Long term I think the cable companies have everyone beat because eventually everyone will move to digital cable to get HDTV. The cable companies current model for digital cable is make the base service expensive, but add-ons are cheap. So they have a little easier time pricing out Tivo and Netflix on the added services because they make lots of profit on the base service. Short term I think there may be some growth left in Netflix because they have a few years before video on demand gets to be real significant. And if you own any stock in blockbuster video sell it now because they don't realize they are a dodo.
And I don't think video on demand will have much problem serving up tens of thousands of titles. Disk space is real cheap, and getting much cheaper quickly.
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