Netflix and LG to make a run at Apple TV and iTunes
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.
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.
Comments
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."
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 ?
Heck, how many billions in cash do they have?
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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?
"Some"? You think?
Well, we can agree on this.
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.
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.
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.
Anyone know which studios are compatible for a buyout??
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.
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.
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
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.
- 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?
"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?
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.
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?
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
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.