• The Wrap, Wednesday, September 15, 2010 11:26 PM

Tectonic changes have gripped the video-rental business over the past year, giving Netflix a clear victory over its brick-and-mortar competitors. As Blockbuster and Movie Gallery are waylaid by money problems, Netflix -- by firmly embracing instant streaming -- is charting the industry's future. It could also create headaches for the cable and DVD retail business.

Netflix has become the biggest player in the rentals game. For as low as $8.99 a month, customers have access not only to the company's storehouse of DVDs, but to 20,000 movies and TV shows that can be streamed live. The service is a big hit with customers. In the most recent quarter, 61% of subscribers watched more than 15 minutes of a streaming TV show or movie, up from 37 percent in the same period last year. Overall, Netflix couldn't be in better shape. Revenues rose 27%to $519.8 million last quarter, up from $408.5 million in the same period last year.

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