There’s only room for 4 devices in the average living room. They are: a display (LCD/plasma/whatever), a cable/satellite receiver (aka set top box or STB), a DVD player, and a game console. For travelers, you can add a Slingbox to that list, but that’s about where I draw the line (sounds like Erick at TechCrunch has a similar philosophy). Remember, I said “average” living room. I’ll expand on my four device theory at a later date.
Netflix was rumored to be building its own box, a project I was sure to see fail. Instead (or in addition or in replacement of) they are going to integrate their Internet delivery service into some future LG products. This is, in my opinion, the only path for success. By doing so they eliminate all risk of becoming a hardware company, which surely would have sent them on the path to failure.
Don Frommer at SAI asks 5 good questions, but of them I feel only one is extremely relevant: how much will they cost? On the PC you get one movie per dollar you spend per month with Netflix. If that model translates to the TV box, then we have a winner. If, on the other hand, I have to spend per movie, then Houston, we have a problem. That would put them squarely into competing with cable/satellite on-demand services, and Comcast has a much bigger war chest in that arena.
Over at NewTeeVee the question of competitive services is raised, citing AppleTV, VUDU, Amazon Unbox/TiVo as comparison products. In my eyes, none are competitive. The “smart” marketing of the (rumored) $799 HD/Blu-Ray player will simply label it as having Netflix “built in” or something like that. It won’t get marketed as “The Netflix Box” (except, of course, FROM Netflix). Consumers have shown resilience to these boxes, and the Netflix brand simply isn’t strong enough in that sense. We all know what movies are, and we are used to a bunch of existing models. Having the top-of-the-line LG DVD player include movies “as if by magic” is a winning combo.
My friend Dave Zatz is a little less enamored with it: “As I said recently, given content licensing fees and Netflix’s low-cost subscriptions, I don’t see how unlimited streaming could be an economically viable business plan… Time will tell if they stick with it.” I think it’s a fair point, with a big however. The however is I’m sure some math genius at Netflix has all sorts of cost/usage estimates that predict a certain quantity of movie watching. Again, just a guess of mine, but I would presume they have a long way to go before it becomes overly costly.
So to summarize – the path to success from here:
- Integrate into a DVD player and NOT a “Internet STB”, and add NO extra fees for the service beyond existing Netflix monthlies.
If Netflix is to be creating their own box, please don’t make the same mistake that Vudu made. Don’t have the box upload to other Netflix users. The Vudu box becomes a peer/source and will upload the downloaded content to other Vudu users thus killing your local network performance.
I’ve got the Vudu in here. I haven’t run any network performance tests, but I am a bit skittish and have been disconnecting it when not in use. I guess I won’t have the most current titles (or software), but my home network is also my work network and I need to have confidence in my bandwidth.
Thanks to Jeremy, I was one of their Beta users (I bet you were too), but my upload speeds were getting hammered. I should of saved the speed test results when I had it plugged in vs when I disconnected it. And this was with their network bandwidth controls enabled. Cheers!
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I really LIKE the vudu, the idea has been a long time coming, but the pricing model needs some work. And, there is of course the BW issue raised here. Especially with a slingbox and VOIP in the house, one really does need to control the upstream BW and regulate it. I really hate sacrificing ANYTHING when I am say in china trying to sling something to my phone.
as a netflix beta participant and buyer since then (man, have they REALLY gotten nearly eight years of money from me!!) I like this idea especially, if it is no additional cost to the current buyer
Since I saw the announcement about a year ago that Anthony Woods from Roku was hired at Netflix, it was a sure bet that this was coming.
I like the integration path, but dislikes 2 things.
1)This probably won’t be a open format, thus still requiring other devices for other stuff.
2)Even if it is cheap, my bandwidth is not, so this will have to become way WAY cheaper. right now, I pay 7$ for every gig over my limit (10gig up, 20gig down) and 50$ a month for a ~8meg line. So adding up this to the movie download/upload is going to cost me a lot !
My 2 cents
Hey Jeremy, nice post. I would say that after using On-Demand from Comcast for a while now, any device that gives me more choice than 20-30 movies (and other networks) is going to be welcomed into my house. Now, NetFlix is fairly well positioned to offering this since they MUST have tons of contracts with movie studios to provide flix to us, no?
I have been a customer since 12/00 (7 years) Currently there is not an easy way to wirelessly stream the Netflix Watch Instantly to my big new HDTV. I have shopped around and almost all the suggestions that I am getting are to use the Playstation III built in web browser to do it. I searched the Internet and found forums stating that they have tried this, but the Netflix Watch Instantly system requirements prohibit it because of Internet Explorer AND Windows XP. Needless to say, I still have to bring my laptop onto my living room, physically plug my laptop into my TV, plug the sound into my stereo using the headphone jack (because I don’t have component outputs on the laptop), sit the laptop precarelessly beside it, and watch Heroes (which I am loving . . .)
I hope the new set top box provides a standard web browser, wireless keyboard or controler, as well as WIFI.
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