Why Netflix Could Rule the World
As most astute home theater enthusiasts already know, Netflix announced a set-top box this week (made by Roku) which allows consumers to view Watch Now videos from the Netflix website on their home televisions. What’s so amazing about this?
This is the first system I know of that offers this many titles (real titles, even though dated) for an extremely low, fixed (non-additional-subscription-or-pay-per-view) fee. While other technology has been around for over a year now that performs IP streaming of Internet TV channels (IPTV) this device actually brings Hollywood movies to your home for NO ADDITIONAL FEES beyond the cost of the box.
And not just Turner Classics, Sundance Films and movies older than dirt.
Contrary to one particularly dense Internet post I read this week, this is most certainly NOT YouTube 2.0.
Here are some points to consider as you ponder why this is such a massive development in the world of home theater:
- It doesn’t have a hard drive so that it can SPECIFICALLY not be classified in a way that would increase fees and force it to enter into a pay-per-view scenario
- They do not offer their full catalog SPECIFICALLY because you would have to pay additional money to access newer content. It’s not because they are holding back…
- Netflix is working with additional partners to bring this service to the home in other products. A strong rumor includes Xbox 360 and LG will more than likely release a TV with this tech embedded within
- This IS the greatest thing to happen to consumers since the iPod assuming it progresses
- The box supports HD content, so you know this is something being presently worked on
- Don’t be too quick to decry the quality of the box. For $99 you get HDMI (with audio), full analogue outs, digital TOSLINK and the capability for future HD content
My personal guess is that Netflix is going through the motions now to figure out how exactly it may to classify this as a “rental method” under its current licensing so that it can bypass DVD shipping for those who opt for a direct-to-TV service. They have a LOT to gain (massively reduced shipping fees for the same income) and almost nothing to lose. Mark my words – they are ALL over this.
Here are some questions and comments I found on some forums that I’ll address to shed light on this new product – in an attempt to generate as much enthusiasm as I have for the technology:
Why charge for the device? Why not have it as part of your rental agreement?
Because Netflix doesn’t manufacture hardware. It’s not in their business model, or this wouldn’t be a product offered to multiple manufacturers and carrying their name and logos. At $99, this device is already practically “free”. Netflix is the “Microsoft” of the “Apple vs PC” war. They are creating the infrastructure and service. Let everyone else make hardware to carry services which will make them money and firmly entrench them on the home market.
Why not make all the downloads full DVD quality, make them download to the drive overnight?
Two things: One, the downloads are already basically full DVD quality if your Internet connection speeds and hardware (router, cabling, wireless network, etc) can support it. Two, if they actually store the movies on a drive they will almost certainly have to charge users in a pay-per-view model due to current licensing arrangements. Storing the movie is (for now, at least) considered a download, regardless of the duration of the stay. I believe the misconception here is that the quality will suck because it’s essentially a “live” stream. Since Netflix recommends at least a 4 mbps load speed you may extrapolate that the downloads are very close to DVD quality (which average 4.5 mbps) at maximum quality. Assuming they use any advanced compression techniques at all (they would be silly not to) it looks like DVD quality downloads should be quite easy to maintain.
Why not have the FULL DVD library available to view?
There is no doubt that Netflix is working on this, however it’s not a “failing” that they haven’t done it yet. The licensing conditions are much different for new releases as compared to older titles. My hope is that Netflix will figure out how to allow several New Release titles out to consumers for limited time download and replacement – simply eliminating the wait time for the post office deliveries. The real trick will be convincing the studios who have to agree to this new methodology.
This is no different than the free on-demand movies available from CableTV
Let’s take a look at the advertisements Cable companies put up to market their free on-demand movie services:
- Free Movies includes content from Sundance, NBC Universal and Turner Classic Movies.
- Free Movies on Demand features a variety of classics you can select from and watch on your schedule for free.
- Comcast FREE on demand movies include titles from Palm Pictures, Sundance Channel and Movie Pass.
Currently it is my experience that CableTV on-demand movies are far more limited and much less relavant than what is offered on Netflix. In addition I have not seen a plethora of TV shows available for instant viewing as there is with Netflix. In comparison, the Netflix movie database is full of far more current and compelling titles. I actually want to watch movies they have available.
Satellite is getting into the game as well, except that it’s a real mess due to the limitations of the format. For example, users need to download enough of the movie to begin watching, which can take anywhere from 2 to 4 hours. As a result, the satellite TV model is more of a pay-per-view, download system than a truly convenient on-demand movie experience. While satellite has an “HD advantage” and is on the forefront of pushing that frontier, their on-demand system is complex and unwieldy – certainly a far cry from setting up a simple $99 box that includes wireless 802.11g networking! And when it’s all said and done, both satellite and cable are offering a lot of PAY options, and very few free options (despite marketing to the contrary)
Anyone not impressed by the new Netflix/Roku device and technology fails to see the true leap that has just taken place. This is the beginning of a new era in movie viewing. I hope that the future holds HD quality streaming and downloads, but for now this is an excellent start.