Netflix CEO says streaming video gaining on old-fashioned DVDs

Just what we thought. Video streaming is taking over, as evidenced by Netflix CEO Reed Hastings noting the company's "Watch Instantly" service gaining ground on Netflix movies mailed in those telltale red envelopes. Hastings says Netflix subscribers who use his streaming video service are renting substantially fewer DVDs, calling it a "substitution effect."

Even though there are only so many hours in the day to watch movies, this surge in streaming video viewing is particularly remarkable when you consider the notoriously low quality of the Netflix Watch Instantly selections, peppered with moldy oldies and titles you wouldn't foist on your worst enemy.

That'll change soon enough. Netflix is getting to be so profitable (with profits skyrocketing a recession-defying 45% in last year's fourth quarter), the company's gaining more clout over Hollywood studios, and we predict first-run titles (in glorious HD) populating Netflix Watch Instantly before too long. Also, people love instant gratification, and are inherently lazy. Why walk to the mailbox when you can Watch Instantly?

Engadget HD, via Ars Technica