Netflix is the best US video on demand site at present, as it delivers unlimited streaming VOD films and TV shows online as a "free" bonus along when you have a regular DVD by mail subscription (which start at $8.99). No other pay-per-view service even comes close to the value of this subscription model. In addition to their 100,000+ unique DVD titles, they currently have over 12,000 films available for download, more than any other service.
Netflix's Watch Now VOD service debuted in January 2007, and by the fourth quarter of 2009, 48% of their 12 million subscribers had streamed at least one film. Basically, you get an hour of streaming VOD service per buck of your normal DVD rental subscription; so on the 1 disc out $8.99 plan that's 9 hours of streaming video, or 17 hours on the popular 3 out $16.99 plan.
The service is simple; pick your film and it will stream and start playing in as little as 10-30 seconds, depending on your internet connection speed. The video quality will depend on your connection speed. It requires Microsoft's Silverlight software to be installed. In October 2008, Netflix added Mac support. Broswer support includes Internet Explorer 6, Firefox 2, or Safari 3 or higher.
Playback can be paused or restarted as desired. We've read that you really need at least a 1.5 Megabits per second broadband connection to use it, but for the for highest quality, 4.0 Mbps is recommended.
Note that these are streamed films--just like rentals--so you don't actually downloaded and save them. There are no commercials, and you can play or pause a video like any DVD. The service can be viewed anywhere in the 50 US states and DC; some people even use it on vacation.
Netflix's vast library of films is separated into 21 genres for convenient browsing, and then over 200 subgenres--essential with so many to choose from. In fact their suggestions system ("if you liked that you'll like this") account for many rental decisions--you end up seeing films you may never have discovered on your own but which are in tune with your interests.
Their actual browsing system is excellent; you don't have to click on a film to get info about it, roll your mouse over a title and it will bring up a temporary text box listing the synopsis, stars, director, genre, and rating. Clicking on it will give even more data, though not as much as detailed as on Blockbuster it must be said. The search engine is very powerful--essential with such a wide catalog--allowing separate searches on actors, director, studio, genre, decade, new releases, and critic ratings. The customer ratings are also extensive (over two billion!), making it less likely you'll pick an unknown film that's really bad.
Netflix customer service is exemplary, and the presence of a customer service phone line is a huge plus, something most online-only companies lack. That said, it is hard to find on the site, so best jot it down (listed on the righthand column). Another negative is the film range--although 12,000 is more titles than any other VOD service, it's still about a tenth of their total DVD inventory, and much of it is older content. Netflix is swiftly listing new films, but the speed will depend on its ability to negotiate the rights with Hollywood studios.
Of course in addition to VOD, you also get the top DVD rental by mail service, sent via 39+ distribution centers. These blanket much of the US, and 95% of Netflix subscribers live in areas that can generally be reached in one business delivery day.
Netflix CEO Reed Hastings always believed that online DVD rental would be a great initial service, but even
way back in 1999 he named his company "Netflix" and not "DVD-by-mail.com," with just this distribution model in mind. And now, with 12 million customers, that dream is finally coming to fruition. Their strategy is to continue to grow in DVD rentals, and to offer online video and DVD rentals in one subscription service as the transition to greater digital distribution takes hold over the coming years.
Even though rival DVD companies Blockbuster and Greencine have launched their own VOD services, these are pay-per-view models, not included in the general subscription.
Dissemination: No ones wants to relax and watch a movie in front of a computer monitor, so the biggest challenge with all the VOD services is getting the content streamed from the internet to your main television screen. Netflix plans to support three "Netflix-ready devices" to serve as a bridge from the net to your living room.
The current favorite is the Netflix Player by Roku unveiled in May 2008, which costs $99.99. The Roku is very easy to use (only nine buttons on the small remote) and intuitive and the box itself is smaller even than Apple iTunes's. It connects to the internet via wired (Ethernet cable) or wireless (Wi-Fi) means, then has universal compatibility to get the films to your TV, including HDMI, S-video, component video, optical audio, even standard RCA jacks. It even comes with a 30-day guarantee. The Roku is High Definition-ready as well, though Netflix does not yet stream HD content. The Netflix Player is currently only sold direct from Roku's website. We've had one for months--a piece of test kit we've hung on to--and it works great.
Netflix has unveiled support for many more content delivery options in the past year. These include internet connected Blu-ray players from LG, Sony, Insignia, and Samsung, as well as Internet connected TVs from various companies. These include the Tivo owners can now use Netflix's service to download films via their set-top boxes.
And Netflix has also started offering its films for download on the Xbox Live service (Gold membership required, which is $39.96 per year on Amazon, cheaper than the $49.99 list price). This can be accessed from any Xbox 360 video game console ($299), of which there are over 13 million in the US, and should dramatically expand usage. The PS3 also supports streaming, and the Wii will apparently do so in spring 2010 as well.
Prices: Netflix offers a two-week free trial. They offer four unlimited DVD rental plans, any one of which will get you unlimited VOD downloads: 1 disc out at a time for $8.99 per month (plus unlimited VOD streaming); 2 discs out for 13.99; their most popular 3 discs out for $16.99; and 4 discs out for $23.99. They also have one budget capped plan of 2 total DVD rentals in the entire month, one out at a time, for only $4.99 (plus 2 hours of downloads--this is the only plan that has a cap on streaming).
Netflix previously had caps on streaming--one hour per dollar of your subscription cost, but these limits were removed in January 2008.
Netflix is the best and largest video on demand service in the US, and it comes free and unlimited along with a regular DVD rental subscription! 
Video on Demand Basics