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Netflix to launch service to compete with new iTunes rental service

Last week, Apple rang in the New Year by announcing a new partnership with Twentieth Century Fox to bring Fox's movie catalog to the library of films it will be offering for its new download rental service.  Apple's new service takes rentals even a step farther into the digital domain over mailer based online movie rental services like the one Netflix primarily relies upon.  Apple is tentatively planning to rent films at $2.99 per movie for a 30-day rental. 

The market is growing but, rather vicious, as is apparent by the recent folding of Wal-Mart’s movie download rental program.

Netflix currently offers functionality similar to Apple's planned service, which allows subscribers to watch movies from a catalog of 6,000 films and TV episodes on their computer – the service is offered free to Netflix subscribers.  However, Netflix is unsatisfied with the limited amount of content and the fact that consumers can't watch the content where they watch most of their movies -- on a TV. 

Netflix currently has 7 million customers, but many still rely on mailers which provide access to a much larger library of 90,000 films.  Netflix subscribers pay between $4.99 and $16.99 a month depending on their plan.

Now Netflix is planning to challenge Apple with a slightly different approach.  Netflix has announced plans to release a new service that will download rentals directly -- not to the user's computer, but to a proprietary hardware set-top box.  The service will be free to all Netflix subscribers.

The hardware box is being created by LG Electronics and will be released during the second half of 2008 and connects directly to home networks.  Pricing has not been announced, but a source at LG revealed that the functionality will be embedded for free into the $799 LG dual-format Blu-Ray/HD-DVD player.

The product is not an entirely new idea.  Apple has the Apple TV, which transmits video from a home computer to the Apple TV set-top box wirelessly.  The device has not been warmly received, so it should be interesting to see whether Apple's woes are due to its own missteps or an unready market.  TiVo and Amazon also partner to offer similar functionality.

While Netflix is not offering up a revolution, it is bringing its power as an industry leader, staking its money and reputation to back a greatly expanded direct download service.  The move shows the giant to be among the firm believers that such services are the wave of the future.

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Sounds great
By FITCamaro on 1/4/2008 10:18:49 AM , Rating: 3
Of course its success depends on two things.

1) What will the set top box cost?

2) What will the quality be? It needs to be at least DVD quality video and sound. If its not, it'll fail.




RE: Sounds great
By OrSin on 1/4/2008 10:33:01 AM , Rating: 3
a settop box like this really can be given away for free.
The box will likely cost $50 to make and netflix would make that in jus the money saved in postage in a few months. Also nexflix would lock in a costumer. If someone signs up for a year to get a free box thats a win-win for all.


RE: Sounds great
By FITCamaro on 1/4/2008 10:40:05 AM , Rating: 2
True. I'd sign even a two year contract with their service to get the box for free.

But remember though, this is a supplement to their mail service, not a replacement.


RE: Sounds great
By mrteddyears on 1/4/2008 10:53:54 AM , Rating: 4
For me the real hook is that you will get fantastic costumes for free from the locked in costumer.

At last I will get that ORC outfit I always wanted.


RE: Sounds great
By bighairycamel on 1/4/2008 10:41:09 AM , Rating: 2
quote:
2) What will the quality be? It needs to be at least DVD quality video and sound. If its not, it'll fail.


That'll will all depend on your connection speed. With their curent online offering my 5Mbs connection allows me to watch them on my PC at TV quality, with only about a 15 sec buffer at the start of the movie. So my middle-of-the-road connection speed should suffice.

I know one thing is for sure though, they need to improve their online offerings for me to consider this. I use the online movie service once in awhile and the movie atalog is sucktacular. They have very few current releases. Their TV episode offerings are fairly recent, but the movie selection definitely needs improved.


RE: Sounds great
By TomZ on 1/4/2008 11:06:48 AM , Rating: 3
No, the quality doesn't have to be a function of the connection speed, if the box downloads the movie ahead of time and locally buffers it in the box. In this case, the quality can be whatever, and the download time varies as a function of the connection speed.


RE: Sounds great
By Blight AC on 1/4/2008 11:14:22 AM , Rating: 2
Yeah, Microsoft's service works like this, not a big fan of that. I like to browse the selection and begin playback within a minute.


RE: Sounds great
By Alexstarfire on 1/4/2008 11:40:21 AM , Rating: 2
Don't count on that happening.


RE: Sounds great
By Blight AC on 1/4/2008 11:51:01 AM , Rating: 2
Netflix service does work like this.


RE: Sounds great
By Moishe on 1/4/2008 1:21:32 PM , Rating: 2
that would be a new function for Netflix if it happened... but I would like that. Right now I have a TWC/RR 1.5 Mb connection and the quality is rather low. It was better when I had a 5Mb connection.

I like the feature and I've used it quite a few times. I like the instant access, but I watch everything on a 110" screen and non-DVD quality looks horrendous.

A HDD and do pre-caching, would solve that pretty well.


RE: Sounds great
By Souka on 1/4/2008 11:08:52 AM , Rating: 2
box would probably have some sort of solid state or mechanical HD within for buffering, but also to pre-deliver movies you've selected to watch.

The ability to pre-load movies on your list, or even movies you might like, would greatly reduce the peak load on the servers that will be pushing the data/movie.

Still... even at "only" DVD quality I don't see how this will really become a strong player... by this time next year blue-ray/HD format might take the lead in sales....2 years buying a DVD player would be like buying a VCR to watch rented movies today...

Who knows... I'm a netflix subscriber (2-yr gift from my Bro.), and a "free" box would be a bonus to me. :)


RE: Sounds great
By mcnabney on 1/4/2008 11:25:27 AM , Rating: 2
I just don't see either of the HD media formats, now sitting at less than 1% of the market combined, overtaking DVD in the next year. Maybe in 5.


RE: Sounds great
By FITCamaro on 1/4/2008 1:44:10 PM , Rating: 2
HD-DVD could be set to overtake DVD late this year if the players drop to a consistent $100 mark for entry level players and the movies fall in line with DVD pricing. I'd have bought an HD-A2 when they were $100 if I'd have had the free cash at the time. I really didn't care that it was 1080i since I have a 720p TV.


RE: Sounds great
By darkpaw on 1/4/2008 1:52:11 PM , Rating: 3
The chances of HD-DVD or Blu-Ray selling even a quarter the number of DVDs this year is absolutely zero, even if the prices do drop.

It took many years for DVD to become a majority over VHS, even with the obvious advantages. Most people that have watched a Blu-Ray movie at my place usually ask "and what exactly is the difference?"

DVD had huge advantages and it took years, there is no chance the HD formats will catch up in another year. I'd be really surprised if both formats combine = 10% by the end of the year.


RE: Sounds great
By bhieb on 1/4/2008 4:48:32 PM , Rating: 1
quote:
Most people that have watched a Blu-Ray movie at my place usually ask "and what exactly is the difference?"
Ding ding ding ding we have a winner.

Every once and a while I try to post this, but no one ever seems to care. The general public does not give a rats behind about HD. DVD is good enough, and not just for them I find it fine until you get above 60", then HD gains some ground. And the 1080p thing is just insane why even bother 720p and 1080i are the most you need. You CANNOT tell a real difference on a good set, anyone that tells you differently is full of crap. It is all marketing BS that, unfortunately the people in the know who should know better the so-called "Videophiles", have fallen for hook line and sinker. And it has started and unfortunate cat and mouse game that will only hurt the consumer. The MPAA cannot sell you 2 DVD's of the same movie, so they increase the resolution and you re-buy some that you already own. Mark my words in less than 5 years there will be HDDVD 2 or BluRay 3 with 2160p resolution. And the will convince all you morons to buy new TV's and movies all over again.

The move from VHS to DVD made logical sense, there was a noticable difference even my grandma could tell. But the move to HD is just not needed IMHO.

Now HD does have a small place, for example on my 110" HD looks much better, but on my 53" there is very little difference.


RE: Sounds great
By TomZ on 1/4/2008 5:05:52 PM , Rating: 2
You forgot one other reason for HD-DVD and BD - the fact that DVD CSS was broken a few years back. That means there is effectively little/no DRM on all the existing DVDs out there.


RE: Sounds great
By darkpaw on 1/4/2008 5:22:47 PM , Rating: 2
Too bad the media companies don't seem fit to attach a price to HD media that actually makes people want to buy it over DVD.

I've had my PS3 since July and have bought zero movies. I'll happily rent them from Netflix, but I'm not about to dish out $30 (or more) for a single movie.


RE: Sounds great
By Alexstarfire on 1/4/2008 8:11:44 PM , Rating: 2
I've known that for a long time. They try to show it off at Best Buy and Fry's, sometimes at least. There is no difference that I can see. The only reason people got DVD over VHS was because it was digital and a lot more clear. VHS gets obvious signs of degrading over time. DVD doesn't, unless you count skipping and such. DVD either plays the frame right, or not at all.

That's my opinion at least.


RE: Sounds great
By Odeen on 1/6/2008 2:20:35 PM , Rating: 3
The reason that 1080P output is important is because virtually every HDTV is progressive-scan only. That means the TV has to deinterlace a 1080i input, and most TVs do a terrible job with film-based material.

The reason? TV's run at 60 fields per second. Film is shot at 24 progressive frames per second. In order to fit 24 progressive frames into a 60 interlaced fields (or, 2 frames into 5 fields) each frame is split apart (Frame 1 becomes Field 1A and Field 1B, Frame 2 becomes Field 2A and Field 2B and an EXTRA 2A field is added)

The cheap deinterlacing process results in a 1080P30 (30 frames per second) video stream where vertical resolution is lost and smooth motion appears to "judder" (that is - the motion us uneven, as one film frame appears on the screen for 2/60ths of a second, and the next for 3/60ths (instead of 1/24th per frame)

This is why 120Hz LCD's are so cool. Not because they can "smooth out" motion, but because they can accept a 24FPS signal and display each frame for 5/120ths of a second, instead of the 2/60ths / 3/60ths that 60hz displays do.

You DO NOT have to be a videophile to notice this effect. Just watch for any panning shot and you'll see it.

Also, all prime-time dramas (as well as animation) are shot on 24fps film. Sports and news aren't, (they are shot at 30 or 60fps on video) which is why they look smoother

Now, the reason that 1080P output from an HD-DVD player is important is that the player can output the 1080P24 stream to a compatible TV. Deinterlacing 1080i60 into ORIGINAL 1080P24 once the output has been decimated like that requires a $3000 Anchor Bay DVDO Iscan video processor

The iScan is one of the best accessories you can buy for your 1080P TV, because it will make EVERY SHOW YOU WATCH look better (but especially movies and shows shot on film)

If you can't afford a video processor, then you owe it to yourself to at least get a player that doesn't decimate the output to begin with.