Next step for Netflix would be to provide the streaming service to Mobile users. An iPhone app that can start playing the show that is paused before. Also, the ability to edit 'instant queue' from the Mobile app or TV remote. I see three hurdles associated with this Netflix iPhone/Mobile app. i) iPhone compatible player technology [either Microsoft should make Silverlight iPhone/Mobile ready or Netflix should abandon her bedfellow for a while and go with different player technology for Mobiles ii) Bandwidth - While you may enjoy the streaming content on a 3G mobile, content streaming to 2.5G mobiles will not yield desired results. iii) Apple's reluctance to host such an app, as it would cut into it's iTunes service.
As the ever increasing customer base demands more quality, Netflix would have to improve it's streaming service by providing more 'new' movies to the "watch now" list and improving the stream quality. Improving stream quality is costly and time consuming. The quality of a typical streaming content falls between that of DVD and broadcast HD content (depending on your internet speed). Also, at present, streaming does not support multi-channel audio (just stereo) or closed captioning. The devices that come pre-installed with Netflix streaming service are capable of 1080p. So, Netflix should aim at providing atleast broadcast HD quality content through the streaming service in order to keep the new customers coming to them.
