Today, Netflix took another step away from its reliance on the U.S. Postal Service by announcing a partnership with LG Electronics. Netflix wants to stream videos over the Internet right to your TV. Already, Netflix customers can stream movies directly to their PC. This partnership extends the service to their TVs. LG will bake Netflix’s video streaming service right into a future LG set-top box. It is a move in the right direction, but think of this more as a technology proof-of-concept than a market-shaking new product entry.
LG Electronics is not saying much about its networked set-top box other than it will be available in the second half of 2008 and will include access to Netflix videos. The problem is that nobody is going to go out and buy a set-top box that can only let you watch movies from Netflix. Anyone who buys this set-top box will most likely buy it for another reason. The ability to stream Netflix movies to their TV will be just a nice added bonus.
An LG electronics spokesperson told me that there would be other features as well, but would not specify what they might be. Some possibilities: a combo set-top box and Blu-Ray/HD-DVD player, a networked set-top box that streams video from other Websites besides Netflix, a Windows Media Center Extender with WiFi that lets you stream all your music, photos, and personal videos from your PC to your TV, or all of the above.
But no matter what bells and whistles it comes with, any after-market set-top box is a hard sell. Who needs yet another set-top box under their TV? People only have room for a few boxes in their living rooms, not to mention the hassles of wiring it up to a broadband modem that may be in another room. Until Netflix gets this feature integrated into the set-top boxes distributed (and subsidized) by the cable and satellite TV companies, it won’t make much difference to Netflix’s overall business. Netflix has indicated that this is just the first such set-top box deal and that it will try to strike more with other set-top box manufacturers. (Maybe it should talk to Google about including Netflix in Google’s secret set-top box project). Before it gets to critical mass, though, Netflix might have to pay for carriage on some of these devices, and it will take years for it to gain meaningful distribution in American homes.
I have an account with netflix and they dont have a good selection of movies to stream from their site. I hope with the tv streaming they will have better movies.
As a Netflix subscriber, I for one would seriously consider it if they would package it with Netflix service – or subsidize the hardware for subscribers. Of course, the video quality would need to be of near DVD quality for it to make sense.
RIG: The problem is that most movies released in the last 5-10 years have distribution rights on them that don’t include digital download medium. Until these contracts are up, there won’t be any download distribution. Therefore only new movies which have distribution clauses that handle this will be able to be put up for download/stream.
Engadget and Gizmodo have been talking about this item and both praise it. I had the exact same attitude as you did, Erick, Netflix should not enter the hardware business. TiVo is still loosing money and deals like the one they are running with Comcast is what’s going to bring them into the black. Netflix should be pushing to have a movie takeover of Cable/Sat’s Video-On-Demand services (with applicable fee of course) and it’s guaranteed to push their market share well over Blockbuster’s Total Access due to them being even more convenient than it is. I hope their plan is to implement this into Cable/Sat/FiOS/etc. and not build it into additional boxes or even BR/HD/DVD players.
My wife tested a wallet-sized set-top device from Netflix. They shuttled about 20 consumers into a hotel room stocked with food and demoed it. They asked them loads of questions about price-points etc. It seemed like they are ready to come out with a $50 SD and a $99 HD one-time fee version of a device that will wirelessly stream netflix content. I think we would do it as we are really netflix fanboys and the writer’s strike has show cased that there really is very little on TV worth watching. So if I can get Hero’s season 2 on-demand, that’s extremely compelling. This story just sounds like a combo device so people could get rid of their dvd player.
NetFlix should have bought SlingBox. Would have been a good match for both parties.
But this same news also has Netflix talking of streaming Netflix movies via gaming consoles:
http://www.tech...aming-consoles/
That’s possibly the real news (if it comes true later this year as claimed).
Just thinking: could they possibly take the cellphone approach of giving out the hardware for free while locking people down for a two year contract? I’m not sure if the price point is right but it would be more convincing than charging people for a set top box just to use a service.
@sushi
Are you that dependent on a stupid cell phone? Wait, I think the whole world is waiting for a sextoy/cell phone. Yeah, that’s it! Replace real life interaction with your cell phone. Then you can watch porn movies on your cell while you use it for sex.
Netflix is an ondemand entertainment services company that will deliver moives to the platform people want to watch them. The best best place to do that now is on DVD. As DVD’s and other STBs become network enabled, Netflix will be there if that’s what consumers want. The “Netflix” of streaming movie delivery will be Netflix.
i’m not so sure this is a hard sell. i think this analysis is fairly shortsighted.
first of all, netflix has mentioned they would like to see their functionality in hundreds of set top boxes, i’m sure that includes cable and dish operators. where do you assume they are excluding these players? carriage fee for not, i can’t see why netflix would be opposed to this, but i can see how the cable operators would not like to give them that kind of access to their customer base.
they are talking about bundling this with combo hd drives and media extenders. this will not be just a standalone netflix streamer. i’m not sure how that is a hard sell when the majority of consumers have not entered into the HD arena yet. once the 2009 switch happens and more consumers move to HD more and more will be picking up HD drives, with netflix capability i’m sure.
vudu costs a hell of a lot to just stream movies, and you have to pay for each movie. vudu also only has 5K titles.
netflix has 6K titles now, and the best organization to offer more, not to mention, arguable the most valuable web community and data pool to trade on in this industry. also, with netflix streaming movies is included in your monthly plan, they are even discussing unlimited streaming. by baking netflix into set top boxes the cost is basically being subsidized.
your article is narrow and misleading.
The real News here is that Netflix will be a added service on many boxes including Gaming consoles .
The strategy is similar to DivX who have made their product available for a fairly low cost and on gaming devices the Netflix service could be added as a update .
“…the hassles of wiring it up to a broadband modem that may be in another room.”
More and more home theater devices are requiring internet connections …Slingbox, Xbox 360, PS3, HD DVD players, Blu-ray players, AppleTV, and the HTPC are just a few examples. If other boxes are requiring it, then it’s not that much of a stretch for Netflix to be doing it.
I agree with Matt that a smarter approach is going the DivX route and creating a standard licensable service. Making hardware is an expensive and risky thing, but if you can feasibly act as a value-add on other hardware, then you’re golden. Amazon is obviously another player in this market. Funny enough Microsoft is going the Apple route with its integration of Xbox 360 and the Video Marketplace. However, I could definitely see MS opening up their Marketplace to more devices. It only makes sense afterall.
Personally, being in Canada I’m happy with my HD Movie Network and HD-PVR. I literally have more movies stored than I know what to do with, and can easily watch one movie a night. A good movie too, not a crappy filler one.
This will likely fail, there are way to many hardware set tops out there as is. I already have a Apple TV and a Playstation 3 I’m not going to get another device. Why does everyone always think they have to reinvent the wheel, the online movie rental industry will never take off with all of these incompatible hardware and software solutions. the ONLY reason the online music industry ever took off was because of the open standard MP3….. I am a Netflix user and would love to use the online service but won’t if this is their plan….
Didn’t they say it was going to be integrated into a DVD player? Could just be a decision-making value-add at the point of sale.
Isn’t it obvious that this *should* be with Tivo?
Unless Amazon has locked up that market, Tivo would be a no-brainer.
“Sell”? What “sale” will be required? According to the BBC, the boxes will be available to Netflix subscribers at no extra charge.
Boom! goes the premise of this piece…
If they offer a box at $99 bucks and a monthly service plan for $9.99 for unlimited movies I would, and the rest of America, will buy it in a heartbeat.
Price point is key to this.
This is a great idea but people still need more bandwidth for these types of things to work in the US.
Matt (11): He said that would be a target market, while there is little doubt it will come nothing has been said about when or what console.
Doug Stewart: It says it will not be an extra charge to use the box, not that it will be given away for free. In other words, the same online viewing hours that you get now with Netflix would apply to the device.
Presumably it will have similar functionality to the Apple TV, which to date has sold something like 1.5 million units. There’s no reason to think it won’t support other media besides Netflix streaming movies, in fact it’d be kind of ridiculous if thats all it did.
Netlfix is trying to stay viable in the video rental business, its hard to say if this is direct response to Apple entering the market, or has been planned for longer than that. I blogged about the greater implications of this today to the wider DVD rental industry, check it out.
“The problem is that nobody is going to go out and buy a set-top box that can only let you watch movies from Netflix.”
That’s the most ridiculous statement I have ever heard. A set-top box would be “stupid easy” to use for the “stupid easy” general public. Plus, the idea of having a “box” connected to your TV to receive programming you pay for seems to have worked a few times in the past…
@22, expect lately with streaming services. Akimbo. MovieBeem. Soon to be Vudu. These worked real well, right?
This seems like it would be rather pointless for anyone who already subscribes to digital cable or satellite service. The “On Demand” packages offered are continually expanding their selections, plus HD is available.
I’m not sure how they match up price-wise, but I would think it would be cheaper to add on such a package than to subscribe to Netflix and possibly have to purchase a set-top box.
the cable MSOs will soon release OCAP from cablelabs which will be an open cable appliation protocol for TV apps. It will run on millions of low end STB already deployed in the market. Meaning – what is there for google and android? or any other special box with special apps? a competing OS for boxes that google does not sell or license? more slingboxes?
until consumers really shift from watching TV on big screens in their living rooms, the cable distributors are in the best spot to control the TV interface and those apps, since they make getting a box affordable (rent) to the masses).
seems like more wasted brain power at the googleplex in their effort to own it all, and a real non-story about netflix doing a deal that today does not lead to a single sign up..
Reading the prior responses, two key things occurred to me on this one:
1) I agree that price point for any new Netflix device is key. If it’s no/low cost, it seems that Netflix could get some early adopters pretty quickly from their existing base, and see where they can drive from there.
2) I’m curious about what the Netflix licensing arrangements are for the titles in their inventory. I’d be hesitant to assume that they are as restrictive about digital broadband distribution as some indicate, and could perhaps be renegotiated if they were.
What I’m driving at is that it seems that there’s a combination of low price point plus sufficient available titles to drive early adoption. That gives Netflix the opportunity to learn about the market and partnering opportunities pretty fast.
This will go down in flames as another Moviebeam play.
Paying money for a closed box in a open system (the Internet) is like going to the South Pacific on vacation and not being able to leave your hotel room.
The only closed model that has succeeded is Apple and the Ipod (which is showing signs of cracking) and that is because people show off their Ipod as an fashion accessory.
A nondescript box under your television is not a fashion accessory… I’ll keep my S Cable and my laptop and a host of broadband VOD providers (Cinemanow, Movielink, Butaca.tv) – quality is fantastic!
I agree with most others in that “Most people won’t rush out and buy this set top box” but it’s nice that a company such as Netflix is looking into the future of media and not relying on a business model that supports only “hard physical media” as time’s are a changin’. If only the RIAA had been as smart, lol.
In my opinion for this to work we all need a universal box that would accept cable (via cable card), serve as DVR, and also allow for streaming. The price of the unit would be better justified instead of a costly unit just for the convenience of streaming movies to our sets. A set as described above does exist (Windows XP Media Server) and it could use some vast improvement. I’ve already used the Netflix streaming via the PC with success but the titles offered seem to be older and new releases seem to be nonexistent. Anyone know why??
This is not about a Netflix box, and it’s not about the initial price point of that box – few will buy something that only does nothing but allow Netflix subscribers to view “Watch Now” on their televisions. But imagine the Netflix tech coming as part of a tivo, or a dvd player, or an Xbox, or as part of your next HDTV – that is what this is about.
I think this is a cool idea. Although, if the box is too expensive, it won’t be worth it in the end.
But I like the direction we are headed in.
Amazing break through by netflix!
fakesteveballmer.blogspot.com
I say not a set top box, but rather build such into LG’s TVs!
Though hooking ur PC up to a LCD TV(use a handheld mouse – Firefox with mouse gestures to enlarge text) provides the best way to experience all of the Internet.
Hi,
I had sent out this email to Reed last year about a similar type of a box that I was designing. Although my idea was still better than just trying to stream real-time.
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Interested in discussing on an idea that I am working in the IP TV and movie distribution space….Reply to all
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Why is this spam/nonspam?Sukanta Ganguly to reed.hastings
show details 2/21/07 Reply
Hi Reed,
My name is Mr. Sukanta Ganguly. I am an entrepreneur and have founded a couple of startups in the past, the first one focussed on Broadband Networking and Triple Play and the next was in content security and Quality of Service.
I am working on an idea that is quite early stage and I would like to request some time to discuss it with you. It is in the media (Movies, Sit-Coms and TV Serials, etc) distribution space and it addresses the issue that one faces with Video-On-Demand. My method solves that problem and is not reliant on the Cable Network providers services. I address the deferred approach of movie delivery to the customer via an IP network, providing the facilities and convenience of the model that currently companies like NetFlix and some others offer, where it comes to the customer rather than the csutomer going to get it. It also solves of the issue that VoD provides where in once the movie is ordered, one has to finish watching it or start all over again and pay for it again.
The flexibility of my model creates a solution that takes best of both the worlds and approaches the elements of security and privacy protection via state of the art protection mechanisms.
I know that NetFlix has been quite successful with the “DVD-mailed-out” approach and you folks are also trying to build up and deploy the media “download-to-watch-now” model. That is great but it opens aup another segment that I build up on this phenomena could be huge if archirtected, developed and deployed properly and judiciously.
I would love to have 45 minutes of your time showing you my model and the architecture that I am working and what it takes to get the solution to market. I am talking to a couple of angel investors now and also to some strong players in India, where this model will fly in abig way, due to the customer base.
Please let me know if you are interested in talking about this.
Thank you for your time.
Warm regards
SG
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it’s funny how most of the comments have keyed in on this being some sort of netflix hardware. the title is incredibly misleading and i hope that techcrunch will reevaluate it’s use of words.
netflix is clear that the are not building “another set top device.” instead netflix will be baked into set top devices you and everyone will purchase in the future, even TVs. is this so hard to understand people?
The innovation I am waiting for is for someone to create a search engine for all these on-demand services.
I already have a Tivo, xbox, digital cable and I can download movies to burn to DVD on my PC – but I hardly ever use any of these for movies because its so hard to browse the different UIs and find something of interest.
Think Netflix on the Wii!!! No need to wait for hardware!
Another box – no way. Why don’t they just write a Tivo app for this. If Amazon ubbox had a good enough selection, I would have canceled my Netflix account already.
Jambay,
When did your wife test this ? would this be a netflix box or LG box. ?
Netflix is about as sticky as shortening or PAM cooking spray. They don’t have ANY “subscribers”—zero—nada—none. They claim to have 7 million “customers”, but even those are more transient than a guy living underneath the Burnside Bridge.
It’s going to be hard to throttle the VOD customers they way they do ovies-by-mail folks now….maybe they’ll actually stop movies in the middle and you’ll have to watch the second half a few days later. Maybe you can watch the first 10 minutes of a bunch of different movies—and if you like one–they’ll mail it to you in a couple of days….or maybe your neighbor already has the disk and the ‘flix will tell me where to go pick it up (Netflix peer-to-peer).
Maybe if you watch a bunch of targeted advertising and “suggestions” regarding movies you already own or have already seen dozens of times…they’ll let you watch part of a NEW (and completely unrelated) movie starring Rebecca Romijn Stamos.
Yes…it’s genius…I can’t wait to buy the $800 LG/Netflix radio and start getting all 10 of the satellite movies the studios have allowed to be released yet ANOTHER way. Movies on papyrus is coming early next quarter—so it’s good that Netflix is ahead of the curve. “Who Killed the Electric Car” was never available on MovieBeam, but I sure hope that “StartUp.com” comes preloaded on the LG box when it hits the street.
My copy of Honeymoon in Vegas came glued to the top of a Domino’s Pizza, but I am sure the consumer can’t wait for another movie delivery mechanism that demands a $20-per-month lifetime commitment. I wish I could subscribe to Pizza! Maybe then Dominos would tell me what kinds of Pizza others are eating…and provide me with some suggestions.
My wife bought the kid a VideoNow for Christmas (I wish I was joking) and I am now distilling every movie ever made into a 152 x 73 — 15 frames per second MPEG4 with a 40 minute runtime. Ironically, this is the best way to watch “Georgia Rule”.
Can’t wait to get hold of the device! Even better if they release an addon to XBox 360.
The Netflix box will be shaped like a REALLY big red envelope. It comes with a 1 Petabyte harddisk which is capable of storing all of the 50,000 movies Netflix has to offer, unless you want high definition. Unfortunately it costs $5 million (EMC storage coupled with an HP Server Head), is very noisy, and it takes up MOST of your living room. It’s still a better bargain than the $399 VuDu unit because you’ll have ALL the movies.
No walled garden box will ever work. I guess Netflix tried to do a low cost walled garden (Netflix only) box (See jambay’s comments) gave up and did a smarter thing by partnering with other CE devices. Internet became what it is today because of its openness … nobody told you could visit only xyz websites. Video on the Internet will be no different…
I don’t see how this business model, differs much from TIVO. If the price is right, I think it will, in fact, be an EASY sell.
I think the claim that this will be a hard sell is sort of unfounded, especially with the “who needs another set top box?” argument. Apple has been trying to do this with iTunes even before they announced movie rentals yesterday. Now they are doing even more of a push. A proprietary set top box is really the only way to allow for movie downloads while keeping (most) users from getting at the data files.
I agree that getting the functionality integrated with a cable box would be better, but unless the cable companies come up with some sort of open format for you to pick your rental service and access it through their interface it’s going to be a harder sell to get that done.
I would definitely put an additional box under my cable box to get Netflix content, especially if their interface is better than the crappy cable company ones. (with recommendations, my queue, user ratings, etc).
Not a hard sell for me. I used Movie Beam for a while and although the content was lacking and they had their share of problems the concept was great and overall the box worked great.
I would also definitely be in on this, especially if they end up being able to offer much of their current content. It would seriously out-class Unbox and that Vudu thing.