OnLive CEO: Entertainment Companies Fear Growing Netflix Dominance

Saying that entertainment companies are merely "concerned" about Netflix's increasing dominance of streaming video is "a gross understatement," according to Steve Perlman, CEO of streaming game service OnLive. "There's a snowball effect," Perlman told The Wall Street Journal [subscription required]. "At some point they [Netflix] have so much content, if you want to get your stuff distributed you have to go with them." All three major gaming consoles -- Xbox 360, PlayStation 3 and Wii -- have the option to stream Netflix video, helping boost the service's influence. Users can also access Netflix through web browsers. Recently, Netflix introduced a new pricing scheme that allowed customers to subscribe exclusively to the streaming service for $7.99 per month. Previously, all subscription options required customers to include at least a one-DVD plan. Perlman's OnLive is an upstart gaming service that streams games instead of video. Users connect to OnLive's servers to remotely access high-end PC games, instead of downloading and installing games to play them locally. With the recent introduction of the OnLive MicroConsole, customers can connect to the OnLive service from their televisions. The Wall Street Journal report claimed that OnLive plans to offer streaming videos next year through a subscription service. A rep for OnLive told Gamasutra that the company hasn't made any official announcement of a streaming video service, but with Warner Bros. parent Time Warner as a major investor and a streaming service already in place, video delivery may be a foregone conclusion. OnLive is also taking cues from the business model of Netflix, which has disrupted disc-based rental businesses with its streaming service. OnLive recently introduced a monthly flat fee that gives users unlimited access to certain games. Additionally, a new free OnLive Viewer iPad app launches today, allowing members of OnLive (paying or not) to spectate OnLive players' games as they are being played, but it doesn't allow iPad owners to play games via the mobile device. [UPDATE: Perlman said in a separate Reuters report: "Streaming technology is available to anybody. We want to work with the studios. All of these guys want to offer content, we're just here to distribute. OnLive can deliver any experience that Netflix can."]