Netflix, Amazon, Apple: Which Will Get Video Downloads Right?

Dennis Faas's picture

A little more than a week ago, Wal-Mart Stores quietly chucked its video download offering into the waste bin. Introduced less than a year ago, Wal-Mart appears to have given up when Hewlett-Packard, its technology partner in the venture, cut support. (Source:

This doesn't mean that downloading video directly to the consumer is a dead issue. This week, Netflix -- the company that sends DVD's to more than 7 million consumers in little red envelopes -- joined Apple and Amazon in experimenting with ways to offer complete media "choice" to the heretofore limited selections offered through pay-TV or video-on-demand cable services. Netflix intends to partner directly with consumer electronics manufacturers to stream movies and other content directly through the Internet to the consumer's television. Its first partner will be Korean manufacturer LG Electronics. More partners are expected. The new Netflix program is an extension of a program it introduced a year ago that offered 6,000 of its 90,000 titles to be available for download to a consumer's PC via the Internet. (Source:

The new Netflix offering will raise the stakes in the video download competition. There are some serious competitors; Amazon introduced "Amazon Unbox" early last year, allowing consumers to rent and download videos directly to their PC, TiVo, or portable media player. Already, Amazon offers a wide range of movie and TV-series content to its Unbox consumers.

Apple will also be joining the melee. In the upcoming Macworld Expo starting on January 15, Apple is expected to announce the broad availability of film rentals through its iTunes service. Already it has started to make short films available, allowing Apple to integrate its iTunes, Apple TV, and iPod offerings into a seamless consumer service capable of rivalling anyone in the expanding video download market.

It's still too early to assess who's going to be the dominant player in the emerging video rental marketplace. For sure, it isn't likely to be Blockbuster, who only now is catching up to Netflix by offering its own DVD postal delivery program. It's also not likely to be existing cable-based pay-per-view operators. But whether it's Netflix, Apple, Amazon or someone else that prevails, the real big winner is going to be the North American consumer.

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