Netflix Watch Instantly and iTunes movie rentals: aiming for two different markets

Quite frankly, it was hard to take Netflix's sudden freeing of its Watch Instantly feature as anything but a response to Apple's forthcoming iTunes movie rentals, but according to a piece at The New York Times, the two are actually aiming at different markets. After speaking with Netflix's Reed Hastings, it was found that the vast majority of its streamable content was "older," and considering that users of this service can never look forward to brand new releases being available, the cost (i.e. free to most mail-in subscribers) makes sense. As for Apple, it's able to focus on crowds who are looking for a more robust, generally fresher selection, but of course, you'll pay the premium each time you indulge. Furthermore, Netflix has yet to make transferring video to any display / device other than your monitor easy, and while an LG STB is indeed on the horizon, the differences in content selection are still likely to lure separate eyes. For more on the how's and why's behind the battle that probably isn't, go on down and tag the read link.

[Barry @ Jan 17th 2008 8:07AM]

Why does Netflix have to hate Mac users so much? They sure love their DRM, so much that they lock out an entire platform because it doesn't work with their DRM scheme. Bleh.

[axemte @ Jan 17th 2008 9:54AM]

Again, it's Apple's fault, not Netflix. Tell Apple to open their DRM and NF would be glad to cater to the Mac community.

[Jeremy @ Jan 17th 2008 9:56AM]

The way I understood it the fault lies with Apple. They won't license their FairKeys (or whatever it is they call it) technology for Netflix and the movie studios won't agree without a reliable DRM system in place.

Remember everyone. Apple is a company out to make money -- not be your best friend.

[Eric @ Jan 17th 2008 10:34AM]

Exactly how is Apple stopping netflix? You can run whatever kind of DRM you want on the Mac, provided that it is implemented (which netflix has not done). Apple stops 3-rd party DRM on iPod/iPhone/iTunes, but not on the Mac in general.

[Gian @ Jan 17th 2008 11:25AM]

Look...the onus is on NetFlix. A service provider should not be dependent on the OS developer to supply the DRM. There are a lot of third-party DRM solutions available today, which NetFlix could license. I know they exist, because I evaluated a slew of them last year while researching other content delivery solutions. Netflix have instead made the business decision to exclude non-Windows platforms. This has nothing at all to do with Apple.

As a side note on the content delivery stuff, I had a two hour meeting with Tony Miranz to discuss the Vudu product about 8 months ago. Honestly, I have a hard time seeing that box ever making it. Tony's a great sales guy, and they've got plenty of media coverage, but their niche is too small. Just another video delivery competitor who won't make it. The build-up would take too long.

Apple, on the other hand, already has a built-up base to sell to. They have a great opportunity to succeed. The long-tail content NetFlix is pushing will never sustain the business. The margins are still razor thin and the take rate will be very very low.

The only downside for Apple is the sell-window they're in. It's two weeks after the brick-and-mortar rental, and a whole month after the DVD release. If we assume a busy consumer base, one too preoccupied with work and children to care very much about release dates, then it should work out nicely, especially if they're pushing it via the AppleTV front-end and the iTunes store homepage.

I have an AppleTV and my wife is very excited about being able to rent new titles and HD right from the couch. I, on the other hand, see it breaking my wallet. :-)

Gian

[igedit @ Jan 17th 2008 8:11AM]

Renting a movie after it's already been out on DVD for a month doesn't seem like a "fresher" selection to me.

[gear @ Jan 17th 2008 8:14AM]

I would love to download and watch movies from Netflix on my HDTV but the computer that is connected to it is a Mac mini not a PC. Oh well; guess I'll have to keep going down to the mailbox.

Apple is charging too much ($3.99 or $ 4.99 per movie) for me to give up on Netflix just yet.

But I am looking forward to downloading movies someday and avoiding a DVD player all together.

[cbisquit @ Jan 17th 2008 10:33AM]

the simple solution? Install windows on your mac mini. WMC has a better interface for televisions anyway.

[Marty @ Jan 17th 2008 8:17AM]

"Netflix has yet to make transferring video to any display / device other than your monitor easy"

That's a rather lame observation in my opinion.

Apple TV makes it plug and play, but for a **PRICE**

Take away the Apple TV, and you have nearly the same exact options of watching movies from your PC on your television whether you use iTunes or Netflix or any other online service.

Or to re-word that in a different perspective... to the average user who's not going to buy into more gear, iTunes is no easier to view on your TV as Netflix is.

And didn't I read somewhere that Netflix was working on a set-top box as well?

Or was that comment directed more at accesibility? i.e. iTunes you click, download, and now you have a movie... VS Netflix, you HAVE to have a high-speed connection and the appropriate plug-ins. Then I could see how iTunes would be easier.

I can appreciate the connection trying to be made as far as rental services... but the 2 are vastly different to me. itunes is not going to cause me to drop Netflix. And we all know why most of us rent from Netflix anyway, right? ;P

[Marty @ Jan 17th 2008 8:19AM]

Ahh, the article does mention the LG set top box, my bad. Reading is fundamental...

[Meridimus @ Jan 17th 2008 8:50AM]

There should be a subscription service, like netflix or lovefilm (UK) where you receive an Apple TV kind of hardware for the duration of your subscription. That way they can control the content and the DRM while avoiding postage costs and the customer having to always post things back etc. That would be my ideal solution, plus it would avoid the additional cost of buying an Apple TV in the first place.

Oh, and the UK barely sees any online movie rental action apart from short films. Which mostly suck.

[dmwr @ Jan 17th 2008 11:53AM]

There is already a service like this, although you have to pay for the box:

www.vudu.com

The problem with all of these solutions is the release window. None of them will have a content selection that competes with just renting the DVD because the studios release the movies so late - they just make so much of their money on the DVD sales. Until one of these solutions has content released at the same time as the DVD comes out, it won't be a solution for me.

[dmwr @ Jan 17th 2008 12:05PM]

Actually, I take that back - Vudu seems to get movies at the same time as video rentals....hmmm...might have to get me one!

[James Grinter @ Jan 18th 2008 11:40AM]

"None of them will have a content selection that competes with just renting the DVD because the studios release the movies so late - they just make so much of their money on the DVD sales."

Yeah - doesn't this just mean that they're pricing the downloads wrongly?

Ok, so we're talking rentals here, instead of buying a DVD. But I thought it was generally the case that the films reach the DVD rental market - and the satellite movie channels - before they go on retail sale. At least here in the UK.

[Alric @ Jan 17th 2008 9:06AM]

Not to mention Netflix's streaming solution has deplorable picture quality. It is YouTube quality as opposed to the upscaled DVD and HD offering of the iTS.

[dimon37 @ Jan 17th 2008 9:25AM]

Netflix quality significantly depends on your connection speed. At highest speed the quality is DVD-like.

[steedums @ Jan 17th 2008 9:25AM]

netflix sets the quality based on your connection speed. if you have a good connection, the quality is equivalent of dvd.

[Scott @ Jan 17th 2008 10:29AM]

I will echo the previous replies. If I showed you my Netflix streams without telling you it was Netflix, you'd think it was a DVD. VERY impressive!

[Alric @ Jan 17th 2008 11:57AM]

That's good to know. I tested it when it first came out and did not bothered with it again. Now I am thinking of going back the HTPC route and enjoy some Netflix streaming. This is good because a lot of documentaries in Netflix are play now. Decisions, decisions....

[Doc @ Jan 17th 2008 9:17AM]

Glad to see DLC coming along, but I will either stick to my mailbox or just keep enjoying Redbox! It is just like MS's marketplace in that it is just way too exspensive IMO when I can get better quality from a "real" disk for a $1 instead of $4-5 per rental plus I hate the 24 hour time limit. Why not give me 72 hours to watch a film?

[T-Bone @ Jan 17th 2008 10:33AM]

I didn't know what Red Box was until a couple weeks ago and was really excited to find one at the McDonalds just down the street. I'll probably rent one movie from Apple just to try transferring it to my iPhone but that is probably it.

[Csjk789 @ Jan 17th 2008 9:29AM]

I'll stick with bittorrent over both of these, thank you.

[scaught @ Jan 17th 2008 10:12AM]

NetFlix is to blame for shutting out Mac users. There are plenty of options out there for NetFlix to use. They just decided to go with the easiest one to implement. Maybe if they didn't go the Windows Media route, this would be easier to solve.

[Andrew @ Jan 17th 2008 11:08AM]

Or you could just run boot camp and not be such a whiny tool.

[lilo @ Jan 17th 2008 11:51AM]

It is surprising to hear Apple users blaming Netflix. By now (some 20 years?) they should have realized thatMac market share is too small so most businesses simply do not care to develop anything for it. One should be aware of this when making a choice between PC and Mac. Once you decide to go with Mac - you get what you paid for :-)

[Eric @ Jan 17th 2008 12:17PM]

Netflix are a bunch of dummies to abandon the Mac market to Apple, it is growing at twice the rate of the Windows market, and it has a much wealthier demographic mix. Plus a huge chunk of the Windows market is business and embedded machines, which will never be used to buy movies.

[JuggleNuts @ Jan 17th 2008 10:19AM]

"Netflix has yet to make transferring video to any display / device other than your monitor easy"

My DVI cable does a great job transferring the video from my laptop to my 42" TV ... and my $4 RCA-stereo cable does a fine job transferring the audio to my receiver/speakers. :)

[insertAlias @ Jan 17th 2008 10:26AM]

We all know that the average person doesn't even know that their computer can hook up to their tv.

[Ian @ Jan 17th 2008 4:14PM]

I wish Netflix would have an unlimited download only option. Who needs DVDs anyway.

[Jamus @ Jan 17th 2008 11:43AM]

Come on NetFlix... I want to use your service if you would just make a Mac-friendly version.

[polvadis @ Jan 17th 2008 1:05PM]

I have switched to Netflix this week from Blockbuster just to use their Watch Now feature, and I am very disappointed. It seems that my RoadRunner cable internet connection speed varies and Neflix' little 3-bar quality graph jumps around from Good to whatever the best is.(Each time I click refresh it shows differently)

I started watching a movie on my 40" LCD TV and it really looked shitty. Then, some 4 minutes into the movie it stopped and started buffering more movie, then played some, then buffered again. It was watchable on the computer monitor, but not at all on the TV.

I wish I could just select the quality, say DVD, and wait for it to either download or buffer far along not to buffer again. I hate that their software just determines how shitty the movie will look.

But I believe I saw something not too long ago about Netlfix teaming up with someone to deliver HD content over the web. Is that true?

[Adrian Williams @ Jan 17th 2008 7:53PM]

That's your ISP fault not Netflix

[polvadis @ Jan 17th 2008 7:58PM]

If I can download files at over 300kb/s, why is it that Netlfix thinks my speed is too slow for DVD quality streaming?

[chris @ Jan 17th 2008 1:28PM]

Apple has a "more robust selection"? Have you looked at their service and Netflix's? Netflix has thousands of movies available for free streaming. Apple has 100. How does that qualify as more robust?

I'm very happy with Netflix - I have access to whatever movie I can think of within a couple days, and if I get bored I can stream a ton of stuff for free. I'm no apple hater by any means, but let's look at the relative features of each service, not the brand behind it, when comparing the two.

[Alan Strangis @ Jan 17th 2008 1:42PM]

I'll take this math over either:

(Live Marketplace + Amazon Unbox + DivX/Xvid) + Xbox 360 = FTW

[Joshua Walters @ Jan 17th 2008 4:20PM]

Netflix Users:

Go to Defective By Design, and get your letters mailed in with your DVDs!

If Netflix will remove their DRM (well, put pressure on the industry to LET them remove it) we might have a chance on seeing better downloads, .Mac support, and support with more devices.

Same goes to Apple. If they would allow more use of their DRM, we could see Zune on the .Mac (we have iTunes on Windows, so it could work) and NetFlix on .Mac.

Its a thought.

[hn333 @ Jan 17th 2008 9:43PM]

test

[zamir.evan @ Jan 18th 2008 12:24AM]

The biggest problem I have with the Netflix "Watch Instantly" is that you need Internet Explorer.