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Xbox 360 and Netflix Partner for Movie Downloads
14 Jul, 2008
Microsoft announced today at the E3 Expo that Xbox 360 Gold members will be able to download movies from Netflix to their game console (and hence their TV) for no additional charge. Subscribers also have to be Netflix subscribers. Netflix makes about 10,000 titles, which includes movies and television shows, available for direct download. The move continues the trend by Microsoft to position the Xbox 360 game console as an entertainment gateway, featuring gaming, video downloading, music, and social networking applications. The new Netflix feature will be available this fall. Microsoft competitor, Sony announced earlier this month that they are bringing video download options to the Playstation 3.
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googleApple Expands Video Download Efforts
15 Jan, 2008
Apple unveiled a new video download strategy at the MacWorld Expo. The video download service builds on the Apple TV product, which has not seen nearly the success of its iPod and iPhone cousins. The new download options include 30 day rental of movies from all the major motion picture studios. The download service allows video playback on computers, iPods or iPhones for $3.99 ($2.99 for older titles) for a 30 day period. Viewers can also use the Apple TV set top box to download content direct to their TV. Apple joins a flurry of video download options. Netflix, in anticipation of Apple’s move, announced unlimited downloading of movies and TV shows to PCs for $9/month. Wal-Mart is also looking for a solution. And Amazon Unbox is a player in the video download space as well.
All of these players are trying to carve a niche out of the burgeoning video download business. Many bets are being placed on the Internet becoming a rival consumer distribution channel to traditional cable, DBS, and IPTV. Truthfully, the lines are blurring here. Some days you can’t tell the difference. The real issue may not be about Internet versus traditional distribution, but rather, consumer electronic and content partnerships versus traditional multichannel video operators. Both camps are busily building a model to deliver an entertainment experience that they hope will win consumers over. Can they co-exist? Maybe. They both have their own unique strengths. They will both continue to bring innovation to the marketplace and thus intensify the competitive landscape.
Netflix and LG Partner for Direct to TV Video Downloads
03 Jan, 2008
Netflix and LG announced a partnership to develop and market a set top box that downloads content direct to the TV. This solution removes the need for a PC and joins similar efforts from Amazon/TiVo. The service is expected to be available this fall. The set top box solution will be HDTV compatible, but the announcement was not clear as to whether the downloads will be in HD. Netflix currently has 7 million subscribers, most of whom rent from Netflix’s 90,000 DVD titles via the U.S. mail. In addition, Netflix reports about 1 million members take advantage of their existing PC download service which offers about 6,000 titles. There have also been recent rumors that Apple will announce a similar strategy later this month.
Direct to TV downloads is a growing phenomenon – one that may have serious competitive implications for triple play providers. The jury is still out on whether consumers will adopt the service en masse. There are considerable challenges to overcome, including adding yet another set top box (and remote control) to the equation. Some analysts argue that video downloads will only work if the service gets integrated into an existing STB/DVR, or the existing STB is replaced with an “all in one” STB which includes video download capability. Service providers including cable and telco are studying how/whether to incorporate video downloading. Some like AT&T (through their AT&T Homezone service) already do so. It would seem that existing providers have the upper hand if they incorporate video downloads into their existing subscription TV model. Solutions like the announced Netflix/LG partnership may be able to build a niche following, but I think they would have a very difficult time supplanting large numbers of cable and telco video subscribers. Time will tell of course and predicting consumer behavior is an inexact science to say the least.
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Telecompetitor is a leading industry blog covering the telecom competitive landscape. We provide insight, analysis, and commentary on the issues and implications of the evolving telecom competitive landscape.
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Should Telephone Service be Free?
12 Oct, 2008
Comcast announced a new promotion last week that offers 12 months of free basic cable service for new customers who also sign up for an additional service. Customers who don’t want an additional service can get Comcast’s basic service of about 20 -30 channels for $10/month. The promotion is tied to the digital TV transition of February 2009 and entices potential customers to avoid the transition “hassle” by getting “free” cable service. “The simple fact is that basic cable is the easiest path through the digital transition and now consumers can get it for free,” said Derek Harrar, General Manager and Senior Vice President, Video Services for Comcast in a company statement. This move is similar to strategies pursued by other video service providers, who are hoping to leverage the digital TV transition for new subscriber additions.
But is this strategy a leading indicator for the future? Should basic core services like basic cable and basic telephone service be offered for free, used as a “carrot” to entice customers to buy “more important” services like broadband? Maybe a very basic phone service, with no LD, access to landline 911, and maybe outgoing service only (to avoid telemarketers) should be a free component of a bundled offering. Such a wireline service may appeal to a customer who previously cut the cord for wireless only, but also needs broadband. There is a growing portion of the population who find the value of traditional wireline phone service elsewhere – either through wireless or broadband/IP services. But, if they could get the security of landline 911, and an extra dial tone in their home as a free value add for subscribing to broadband (or video from a telco’s perspective), maybe a telco’s bundled offering may look more attractive than a comparable cable offering. I realize this idea is not appealing to the hundreds of ILECs who are a part of the current access/settlement system (in fact, it couldn’t work in the context of today’s regulatory structure), but I wonder whether it’s inevitable. In this possible future scenario, the current settlement system adapts to broadband as the underlying service, as opposed to voice.
This scenario cuts both ways. From a cable company’s perspective, a growing portion of the population is turning to the Internet as a source for their video content, and no longer see value in paying for a broad package of video as a part of a traditional subscription pay-TV service. But, if they could receive basic TV (which includes local broadcast affiliates) as a free value add for buying broadband, maybe the cable bundle is more attractive. In a true IP/broadband world, very basic phone and video service is relatively easy to deliver, and has little impact on bandwidth and network performance. Maybe the digital transition is opening the door to a future where free basic services are a regular component of a bundled offering. Thoughts?