People Companies Advertise Archives Contact Us Jason Dowdell

Main > Archives > 2007 > June > Apple to Take Down NetFlix, VOD

Monday, June 11, 2007

Apple to Take Down NetFlix, VOD

Apple is reportedly in talks with the movie studios to develop an online movie rental service that would enable videos to be accessible for up to one month for $2.99. If the Financial Times report is accurate, companies from Movielink to Blockbuster to Netflix to Comcast should be nervous.

Until now AppleTV has been hamstrung by limited video selection (including no rentals) and because it offers nothing aside from the user interface to distinguish it from other available technologies. The closest director competitor has been the TiVo-Amazon Unbox service, which has yet to impact the video rental business in a meaningful way.

But by making it seamless to rent movies that can also be watched on mobile devices from the sofa and at a price that beats some services, Apple could quickly reverse AppleTV's fortunes. Netflix' and Blockbuster's subscription services would still be cheaper, but waiting for DVDs by mail lacks the immediacy and convenience of using the remote control to purchase.

The rumor of this service should force Comcast and the other cable providers to consider lowering the prices of their video on demand services. The market for $5 movie rentals could dwindle quickly, and the listing Movielink service could permanently go under if Apple delivers.

Movie rentals are a commodity that can now be delivered via DVD, set-top, game console, PC, and soon Apple TV. Will Apple TV sell as much as the iPod? Not a chance. But a legitimate contender from Apple will force all of the other services to be more competitive on pricing, which is good news for consumers. I've been hard on Apple since the beginning of AppleTV, but this service could silence the critics.

By John Gartner at 09:18 AM | Comments (0)

Post a Comment











Subscribe to Marketing Shift PostsSubscribe to The MarketingShift Feed