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Netflix and LG to make a run at Apple TV and iTunes

post #1 of 39
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Netflix, the world's largest online movie rental service, and electronics maker LG said Thursday they have joined forces to develop a set-top box for consumers to stream movies and other programming directly from the Internet to HDTVs -- bypassing the need to use a personal computer.

The two firms offered no pricing or other details of the service, other than to say that the collaboration will hinge on technology embedded in a hardware-based LG networked player planned for release sometime during the second half of 2008.

By connecting the LG device to their home entertainment centers, Netflix subscribers will be able watch movies streamed from the Netflix Web site on their large-screen home theater HDTVs.

The announcement comes just days after reports surfaced that Apple is planning to broaden the appeal of its own set-top-box, Apple TV, by debuting a compatible iTunes movie rental service at this month Macworld Expo in San Francisco.

Like the product proposed by Netflix and LG, Apple TV lets users stream audio and video content purchased from the iTunes Store to their big screen TVs. However, the current incarnation of the Apple device still requires that users purchase the content through iTunes software running on their computers before channeling it wirelessly from the computer to the Apple TV.

Recently, the $299 Apple TV device has been singled out by pundits and industry watchers as one of the lone blemishes in Apple's otherwise stark track record of continuous smash hit consumer electronics products. In particular, early adopters of the device have been frustrated by the sheer dearth of HD-quality video content being made available for playback on the device from the iTunes Store.

Apple has thus far garnered the support of only Walt Disney to provide its movie catalog over iTunes, and even in that case does not offer those movies in high-definition. Instead, the films are encoded at "near DVD" quality, which Apple has deemed suitable for viewing on large HDTV sets.

However, consumers who've shelled-out thousands for some of the larger HDTV sets beg to differ, arguing that the quality when scaled on such a large canvas appears blurred and watered down. Still, neither Netflix nor the reports on Apple's upcoming rental service have provided any indication that digital movie copies are bound to be made available in high-definition any time soon.

At issue are several factors, primarily concerns over the bandwidth required to support streams of HD video content on the user end and pricing demands on the part of Hollywood studios who've been reluctant to bend to Apple chief executive Steve Jobs' call for uniform and reasonable pricing.

Currently, Apple sells sells new "near DVD quality" Disney releases for $12.99 when pre-ordered during their first week of availability, and $14.99 thereafter. Library titles fetch $9.99. But those rates have so far proven unappealing to other studios, who want the flexibility to charge more for premium releases and also to maintain healthy relationship with large big-box retailers like Wal-Mart and Target who pay slightly higher wholesale costs for physical copies of the same films. What's more, studios have been charging nearly two and three times as much for high-definition versions of new movies, providing yet another barrier to the proliferation of HD movie content over digital download services.

Still, Netflix stands to emerge as the single largest threat to Apple's fledging movie download service with its more than 7 million members and video catalog of over 90,000 titles.

Already, the Los Gatos, Calif.-based firm sports a growing selection of more than 6,000 movies and TV episodes that have been digitally encoded for delivery over the Internet. However, until LG releases its compatible set-top-box in the latter half of the year, consumers will remain restricted to watching those videos on a computer screen.
post #2 of 39
Does anybody know what Netflix's licencing deal with the studios looks like? I know they already deliver videos over the internet to windows computers--is it just one studio or do they have a bunch on board.

I would like to see Netflix and Apple duke it out, but I get the feeling some of the studios might be thinking "Anybody but Apple."
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post #3 of 39
Quote:
Originally Posted by Bageljoey View Post

Does anybody know what Netflix's licencing deal with the studios looks like? I know they already deliver videos over the internet to windows computers--is it just one studio or do they have a bunch on board.

I would like to see Netflix and Apple duke it out, but I get the feeling some of the studios might be thinking "Anybody but Apple."

As for Apple - this is only happening because these folks are concerned which is a good thing for consumers.

"if you can't beat them beat them"

"If you can't beat them at least try"

"If it smells like success then it must be Apple"

"if it works, then go ahead and break it, what's the worst that can happen it cost's us money"

These quotes have changed because of Apple
post #4 of 39
Maybe Apple should do a MS, and buy the competition.

Heck, how many billions in cash do they have?
post #5 of 39
Quote:
Originally Posted by Bageljoey View Post

.

I would like to see Netflix and Apple duke it out, but I get the feeling some of the studios might be thinking "Anybody but Apple."

"Some"? You think?
post #6 of 39
Apple should buy Netflix and Tivo and roll it into a new Apple TV platform and still offer Netflix as a stand alone by mail offering for those that don't want to download.
post #7 of 39
Quote:
Originally Posted by teckstud View Post

"Some"? You think?

Well, we can agree on this.
post #8 of 39
Quote:
Originally Posted by ifiredmyboss.com View Post

Apple should buy Netflix and Tivo and roll it into a new Apple TV platform and still offer Netflix as a stand alone by mail offering for those that don't want to download.

NO! We've already gone over this. If they do that, they would either have to throw away most of those businesses, or sell them, because they don't fit Apple's business model, which would make the purchases worthless, or, they would have to change their own business model, which they won't do, because they're trying to kill the other models.
post #9 of 39
why--all new ipods other than shuffle play video so is a source of video download, buying a settop box still has to deal with bandwidth, so how long does it take to download or is it ONLY streaming and how does this do with rental model.

i think apple has something BIG up its sleeve..
buying advice---wait, that's what most will do, apple is theleader and you want to know first what they do before you invest in a go nowhere tech box.
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post #10 of 39
Quote:
Originally Posted by satchmo View Post

Maybe Apple should do a MS, and buy the competition.

Heck, how many billions in cash do they have?

That's right. And Disney did it to Pixar.
It's time for Apple to throw some weight around and start buying up the Tivos, etc.
post #11 of 39
I would like to see apple buy up some of the studios, though i havent done much research.
Anyone know which studios are compatible for a buyout??
post #12 of 39
I hope it's subscription based.
post #13 of 39
Quote:
Originally Posted by monstrosity View Post

I would like to see apple buy up some of the studios, though i havent done much research.

If this starts happening, we'll have 10 years of stagnation and high prices.

Something similar happened in Australia, when 2 competing cable networks got exclusive access to half the studios each. There was no way of getting HBO, Cinemax, Showtime etc on the same cable network - you had to subscribe to 2 different networks. Same thing with sports, half was on one network, half on the other.

If Apple bought Universal/NBC (for example... though it would be far far too expensive anyway), you might end up having to buy an AppleTV for Apple/NBC & Disney, buy a PS3 for Sony Entertainment, etc.

Quote:
Originally Posted by ifiredmyboss.com View Post

Apple should buy Netflix and Tivo and roll it into a new Apple TV platform and still offer Netflix as a stand alone by mail offering for those that don't want to download.

Far better for us would be if Apple cut a deal with Amazon, Hulu, Netflix etc - to allow the iTunes front end (on Mac/PC/AppleTV/iPhone) to use any service with one consistent interface.
post #14 of 39
Quote:
Originally Posted by melgross View Post

NO! We've already gone over this. If they do that, they would either have to throw away most of those businesses, or sell them, because they don't fit Apple's business model, which would make the purchases worthless, or, they would have to change their own business model, which they won't do, because they're trying to kill the other models.

I agree that they probably won't buy those companies, but how do you know what Apples business model may include or exclude for future products? A lot of people said a cell phone didn't fit into their business model at one point too.

Steve
post #15 of 39
Quote:
Originally Posted by GregAlexander View Post

If this starts happening, we'll have 10 years of stagnation and high prices.

Something similar happened in Australia, when 2 competing cable networks got exclusive access to half the studios each. There was no way of getting HBO, Cinemax, Showtime etc on the same cable network - you had to subscribe to 2 different networks. Same thing with sports, half was on one network, half on the other.

If Apple bought Universal/NBC (for example... though it would be far far too expensive anyway), you might end up having to buy an AppleTV for Apple/NBC & Disney, buy a PS3 for Sony Entertainment, etc.



Far better for us would be if Apple cut a deal with Amazon, Hulu, Netflix etc - to allow the iTunes front end (on Mac/PC/AppleTV/iPhone) to use any service with one consistent interface.


my worry (as aapl shareholder) is that apple are vulnerable to manipulation by the studios. after-all 'content is king' as sony and others discovered late 80's , hardware however good, is useless without content.
And that for me is my single concern with apples strategy.
post #16 of 39
There are far too many options for internet-based movie rentals & purchases, none of them compatible with eachother and all of them flawed.

- Netflix's current online service can only be used on a Windows PC, with no way of getting to your living room (home theatre PC's aside, and there isn't an elegant one of those anyway).

- Apple TV has a great interface, but iTunes' movie quality is terrible, and you can't purchase or rent directly from your Apple TV anyhow. Oh, and their selection is either Disney or Disney.

- xBox Live works beautifully right on the device already connected to your television, is already in millions of homes, but the selection is like 15 films, they're rental only, and even if you could buy them they'd be forever trapped in your xBox.

- Movie rentals from your cable or satellite provider work well, but the inferaces are generally terrible, the selection is limited to a handful of movies a month, and nobody likes the thought of adding $6 to their already-outrageous cable bill.

Here's what I propose should happen: someone should create an account-based service that has the support of all of the major movie studios; Apple, Netflix, Microsoft, and the other major players in the digital movie sales and rental services allow you to log in to their service via this account. When you purchase a film from any of these places for whatever device, that film is flagged on your account as "owned". From that point on, you're allowed anytime-access to that film from any of the cooperating companies. You can go download the iPod version from Apple, who acknowledges that you bought the film elsewhere. You can download the HD version to your xBox as Microsoft has acknowledged that you purchased the film. When the latest and greatest device comes out, you're guaranteed access to your "owned" films on it regardless of what formats it supports. Your movie library essentially becomes a list on an online account, which tells all major media providers/device makers which films you're granted access to via their media store. The studios could still get take advantage of consumers double-dipping; when a film becomes available in a higher-resolution, you're able to upgrade your license of that film for a marginal cost. Same thing with a director's cut, remastered edition, what have you.

With every freakin' device using a different format, DRM, resolution and codec, how else will digital downloads ever catch on?
post #17 of 39
Quote:
Originally Posted by teckstud View Post

"Some"? You think?

Well... Disney seems friendly...

But nobody seems to have any information on how Netflix is doing it. What do they have to pay the studios and how many studios are involved?
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post #18 of 39
Quote:
Originally Posted by Cory Bauer View Post

With every freakin' device using a different format, DRM, resolution and codec, how else will digital downloads ever catch on?

Downloads will catch on because they are inevitable. It is what people are going to want. Sooner or later, one provider is going to get critical mass and an imperfect system is going to be adjusted and adjusted to and it will work fine for people. In hindsight, it will look like a smooth road despite the fact that it is a mess right now.
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post #19 of 39
Quote:
Originally Posted by Bageljoey View Post

Downloads will catch on because they are inevitable. It is what people are going to want. Sooner or later, one provider is going to get critical mass and an imperfect system is going to be adjusted and adjusted to and it will work fine for people. In hindsight, it will look like a smooth road despite the fact that it is a mess right now.

With the way things are going, it's going to be an all-or-nothing system; if your devices have apple logos on them you have to buy your media from Apple, and if your devices have Microsoft logos on them you have to buy your media from Microsoft. And if your device breaks, you have to rebuy all of your media. And if image resolution on the devices and the media doubles, there's no way to upgrade your media without simply rebuying everything at full cost.

Do you really believe people are going to abandon physical media in favor of putting all of their eggs in one corporate basket, so to speak?
post #20 of 39
Quote:
Originally Posted by Cory Bauer View Post

With the way things are going, it's going to be an all-or-nothing system; if your devices have apple logos on them you have to buy your media from Apple, and if your devices have Microsoft logos on them you have to buy your media from Microsoft. And if your device breaks, you have to rebuy all of your media. And if image resolution on the devices and the media doubles, there's no way to upgrade your media without simply rebuying everything at full cost.

Do you really believe people are going to abandon physical media in favor of putting all of their eggs in one corporate basket, so to speak?

Yeah. I do.
*I don't think it is going to happen this decade.
I talked to a friend today who was describing his Christmas haul: all together about a dozen DVDs (many more if you count TV serieses (?) as multiple disks) This guy is not going to give up his collecting any time soon. Of course, sooner or later he is going to realize that he doesn't watch more than 1 in 10 more than once and many more than that he wont even watch once. He is investing many hundreds of dollars a year. Eventually (I'm not saying in the next three years) this will be plain stupid when all movies are available in high def immediately on demand. For a fraction of what he pays now he will still be able to see what he wants when he wants.

*I don't think it will be easy on the early adopters.
You are absolutely correct. Some people who are buying this decade are going to have to repurchase in the future if they still want to own. Hell, even if Apple ends up the dominant player, I don't have any illusion that the few titles I have already purchased will be playable on my OSXII system. With different providers racing for supremacy with half-baked schemes and the studios fighting the switch tooth and nail (even while they tacitly acknowledge the inevitability online distribution) its going to be messy.
But don't confuse the short term with the long term. There is money to be made there and the current and near future instability will limit that money. Either a standard or a few dominant providers will be forced by the market.

*I don't pretend to see the future clearly.
I do not know if the future in digital media lies in subscription, rental or ownership--or some mix of those, but I am quite certain that physical media is on its way out for music and video. Probably for print too, but I think that will take MUCH longer.

(You did ask what I believed)
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post #21 of 39
A clear sign from Netflix that they are afraid Apple's new service may eat away some of their market share... Why else "announce" so many months in advance but just before Mac world.

And for those that say Apple should buy Netflix... I don't think this is going to happen, especially because Netflix has strong links with Microsfot.
post #22 of 39
Quote:
Originally Posted by Bageljoey View Post

Downloads will catch on because they are inevitable. It is what people are going to want. Sooner or later, one provider is going to get critical mass and an imperfect system is going to be adjusted and adjusted to and it will work fine for people. In hindsight, it will look like a smooth road despite the fact that it is a mess right now.

Yeah, they just need to make the movie + storage cheaper than the DVD that comes through the mail right now. Also drop the price of my DSL while increasing the speed.
post #23 of 39
Netflix is headquartered in Los Gatos.

Locals call the town 'LG'.

Netflix partners with LG Electronics.

Coincidence?

Probably.

post #24 of 39
Quote:
Originally Posted by Cory Bauer View Post

. And if your device breaks, you have to rebuy all of your media. And if image resolution on the devices and the media doubles, there's no way to upgrade your media without simply rebuying everything at full cost.

I actually think we'll move more to licenses for our content... so if your device breaks, your licenses will let you redownload. However, we will likely be stuck with one provider as you say, atleast for now.

Oh... and with audio tapes, records, CDs.... vhs, beta, vcd, laserdisk, dvd... there's never been a way to upgrade your media without simply rebuying everything at full cost. I wish online files would change this, but I doubt it will.

(I'd like to pop my CD into iTunes, and have it offer a $1 upgrade to the video clips of my music
post #25 of 39
The download business is such a mess I'm staying out as is everyone I know. Come to the table with something good and I will look at it but at the moment its all crap
post #26 of 39
Quote:
Originally Posted by monstrosity View Post

I would like to see apple buy up some of the studios, though i havent done much research.
Anyone know which studios are compatible for a buyout??

Hopefully none. Bad idea.
post #27 of 39
Quote:
Originally Posted by steviet02 View Post

I agree that they probably won't buy those companies, but how do you know what Apples business model may include or exclude for future products? A lot of people said a cell phone didn't fit into their business model at one point too.

Steve

It seems to be pretty certain that Apple is looking to digital downloads only over the long term.
Netflix sees that, and is now attempting to do the same.

But remember Apple's problems with all of the content owners that they are having.

Netflix has no such problems because it agrees to price, sell, and rent, with the consent of the studios, which Apple sees as anathema.

Apple would own all of the deals Netflix has made. Those very same deals it is refusing to do. What would be the purpose in buying a company like that?

TiVo, which is moving out of the hardware business, though they deny that (their actions recently prove otherwise), also has deals with companies that Apple wouldn't do. Apple has Fairplay, and doesn't want to share, except, possibly, on their own strict terms. TiVo is making deals with the cable and satellite companies, something Apple has shown a strong aversion to.

Without going into detail of these deals, I don't know what else to say.

Apple doesn't need either of these companies. They can do it alone. They don't want the debt that would come with these deals either.

One thing Apple has that is a very big advantage, that almost no other company in their place has, is complete financial independence. No long term debt, no medium term debt, and no short term debt, other than the usual rent and leasing deals. I don't think they would want to give that up for this either.
post #28 of 39
Quote:
Originally Posted by monstrosity View Post

my worry (as aapl shareholder) is that apple are vulnerable to manipulation by the studios. after-all 'content is king' as sony and others discovered late 80's , hardware however good, is useless without content.
And that for me is my single concern with apples strategy.

The studios are concerned that Apple is manipulating THEM. That's why Apple is having a problem.

It just seems to me, from all of my years in business, that you can always bring prices dowm, if sales prove to be low. Look at what Apple did with the iPhone pricing. That was drastic, but shows that price is not fixed in stone.

Apple should meet the studios halfway. If it proves to be non-viable, it could change later. The studios are not stupid, despite what some may think. If their product doesn't sell, they will understand that.
post #29 of 39
Quote:
Originally Posted by Sedicivalvole View Post

The download business is such a mess I'm staying out as is everyone I know. Come to the table with something good and I will look at it but at the moment its all crap

True, but the problem is that, with the HD format wars, the future of traditional disc rental isn't so great either.
post #30 of 39
Quote:
Originally Posted by GregAlexander View Post

I actually think we'll move more to licenses for our content... so if your device breaks, your licenses will let you redownload. However, we will likely be stuck with one provider as you say, atleast for now.

Oh... and with audio tapes, records, CDs.... vhs, beta, vcd, laserdisk, dvd... there's never been a way to upgrade your media without simply rebuying everything at full cost. I wish online files would change this, but I doubt it will.

(I'd like to pop my CD into iTunes, and have it offer a $1 upgrade to the video clips of my music

I think if studios allowed a user to "upgrade their license" for a film from one digital version to the next, more people would be willing to double-dip on the same film. You might get several-thousand dedicated fans of a film who will rebuy it at full price everytime a higher-resolution version comes out, but if they allowed you to upgrade for a reasonable price (say, $5), they'd sell several-million upgrades.

With the move from DVD to HD DVD and/or Blu-Ray, I have a select few favorite titles I'm willing to repurchase in high-definition. However, if those files were digital and I could upgrade (replace) my 80 standard-definition films with high definition versions for $400 ($5 a piece), I'd totally do it.
post #31 of 39
Quote:
Originally Posted by Cory Bauer View Post

I think if studios allowed a user to "upgrade their license" for a film from one digital version to the next, more people would be willing to double-dip on the same film. You might get several-thousand dedicated fans of a film who will rebuy it at full price everytime a higher-resolution version comes out, but if they allowed you to upgrade for a reasonable price (say, $5), they'd sell several-million upgrades.

With the move from DVD to HD DVD and/or Blu-Ray, I have a select few favorite titles I'm willing to repurchase in high-definition. However, if those files were digital and I could upgrade (replace) my 80 standard-definition films with high definition versions for $400 ($5 a piece), I'd totally do it.

It's a good idea, which means that it's not likely to occur.

It might be complex to implement.
post #32 of 39
Quote:
Originally Posted by Cory Bauer View Post

I think if studios allowed a user to "upgrade their license" for a film from one digital version to the next, more people would be willing to double-dip on the same film. You might get several-thousand dedicated fans of a film who will rebuy it at full price everytime a higher-resolution version comes out, but if they allowed you to upgrade for a reasonable price (say, $5), they'd sell several-million upgrades.

With the move from DVD to HD DVD and/or Blu-Ray, I have a select few favorite titles I'm willing to repurchase in high-definition. However, if those files were digital and I could upgrade (replace) my 80 standard-definition films with high definition versions for $400 ($5 a piece), I'd totally do it.

Studios will take the long-term sometimes on things like this, though. Remember the old Disney re-release rule of 7 years. If you don't immediately re-up your collection, they figure to get you within that 7 year period in one way or another. VHS to DVD to whatever (download or high def discs) and beyond. They have the time, and it's cheaper than making new movies, so it's easier money that way. They can definitely wait on the old stuff if their new sales move forward. If you start buying new films you like in higher definition, that just spurs you to double dip... in time.
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post #33 of 39
Quote:
Originally Posted by Cory Bauer View Post

With the move from DVD to HD DVD and/or Blu-Ray, I have a select few favorite titles I'm willing to repurchase in high-definition. However, if those files were digital and I could upgrade (replace) my 80 standard-definition films with high definition versions for $400 ($5 a piece), I'd totally do it.

The good thing is that the HD-DVD and Blu-ray players will play the old DVD's so there is no need to re-purchase anything.
post #34 of 39
Quote:
Originally Posted by pt123 View Post

The good thing is that the HD-DVD and Blu-ray players will play the old DVD's so there is no need to re-purchase anything.

That's the part people seem to be forgetting. this is not like the changeover from Lp's to Cd, ot the change from tape to DVD.

If one buys a hi def format, the old content is still good, and one can just add to it.
post #35 of 39
Of course,we shouldn't use not only Cds.I can agree with last post because the old is a history,a history about which we must remember,think.
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post #36 of 39
Quote:
Originally Posted by Gokinos View Post

Of course,we shouldn't use not only Cds.I can agree with last post because the old is a history,a history about which we must remember,think.

Yes. It's a continuing story. One doesn't end the other. It's more like chapters in a book. The story isn't over.
post #37 of 39
Chapters in a book that are two years apart.
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post #38 of 39
I have to say the last month, I have been hooked on NetFlix. It would be great if the deal was made. I would also really love an iPhone app for streaming media from NetFlix.

I love the iPhone, it has totally changed my Internet and picture-taking life. I like to use shredders to soothe my hectic life, its like I'm a baby and the paper shredding is my warm milk.

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I love the iPhone, it has totally changed my Internet and picture-taking life. I like to use shredders to soothe my hectic life, its like I'm a baby and the paper shredding is my warm milk.

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post #39 of 39
Quote:
Originally Posted by ShredderClay View Post

I have to say the last month, I have been hooked on NetFlix. It would be great if the deal was made. I would also really love an iPhone app for streaming media from NetFlix.

There are rumors that one will be forthcoming. I don't know how correct they are.
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