Netflix Takes on Apple

Dennis Faas's picture

We're accustomed to battles between technology companies, many bitter. But there's a new phenomenon emerging, one where companies previously uninterested in the tech market begin to challenge the industry's most powerful players. One example is Amazon's Kindle, which has by all accounts trumped Sony's text Reader. Now, Netflix may just have trumped Apple TV.

Netflix, best known for renting DVD movies through the mail, now offers a $99 device that will give any of its 8 million subscribers access to movies and shows on their TV sets. The new device is approximately one half the price of Apple TV and subscribers will be able to access the new service with unlimited viewing for no additional charge above their standard subscription fee of $8.95/month or higher. (Source:

The device, offered by Roku of Saratoga, California, is a significant assault against other video downloading offerings including those of Apple TV, Vudu, Xbox Live Marketplace, and Amazon's Unbox. These companies currently offer only pay-per-view options or rentals with a viewing time-limit (e.g. must be viewed within 24 hours).

Roku's Netflix Player offers only the essentials. The box has a footprint about the size of a small book and does nothing other than allow users to watch movies or TV shows ordered via their Netflix account. It does, however, offer built-in wired and WiFi networking, works with any TV, and its firmware can be upgraded. By year-end, however, Netflix asserts that three other manufacturers, including LG, will offer equivalent or competitive devices. These new offerings are expected to have advanced features including integral DVD or Blu-Ray players, and advanced playback features.

The biggest problem for Netflix right now is Hollywood. Because of current licensing restrictions, Netflix can offer only about 10,000 titles for streaming to Roku's Netflix Player. For example, of Netflix's "Top 100" rentals, only 2 are available for streaming. (Source:

True, the Netflix Player doesn't have the gee-whiz hi-tech profile of Apple or Microsoft's Xbox 360. But at its current price point, and assuming it resolves the licensing issues for the rest of it video library, it makes for compelling competition by providing video content streaming for the rest of us.

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