Should Apple fear the Netflix Player?

Yesterday Netflix announced a new US$99, Roku-designed, set-top box that will allow customers to stream more than 10,000 movies and TV episodes.In a review on 19 May 2008 CNet's David Carnoy gave the Netflix Player a 7.

Should Apple fear the Netflix Player?

Yesterday Netflix announced a new US$99, Roku-designed, set-top box that will allow customers to stream more than 10,000 movies and TV episodes.

In a review on 19 May 2008 CNet's David Carnoy gave the Netflix Player a 7.7 out of 10:

The good: Streams Netflix Watch Now titles to your TV; affordable $100 price tag; unlimited viewing with no additional charge beyond standard ($8.95 or higher) monthly Netflix fee; PC-free movie watching; simple setup; includes built-in wired and 802.11g Wi-Fi networking; works with all TVs; upgradeable firmware allows for new features, interface improvements, and bug fixes.

The bad: Though growing, the number of Watch Now titles currently available for streaming is still fairly paltry, especially when it comes to popular recent releases; video quality doesn't come close to DVD or HD; far too many titles don't appear in their original wide-screen version; no surround sound; can't manipulate queue via TV screen; yet another box under the TV.

Update: The Apple TV got an 8 out of 10 rating on 12 February 2008.

Should Apple fear the Netflix Player?

As BTL's Larry Dignan points out "Netflix’s player is important as it gives the company another distribution channel–it can’t rely on DVD rentals via snail mail forever."

So how does it compare to the Apple TV?

Most compelling perhaps is Netflix Player's Instant Viewing feature (aka “Watch Now"). The feature requires customers set up a dedicated "Watch Now" queue on their computer, which then downloads content (presumably overnight) so that only selected content appears on the device.

it allows consumers to use the full power of the Netflix Web site to choose movies for their instant Queue, and then automatically displays only those choices on the TV screen. That's a major improvement versus the clutter of trying to choose from 10,000 films on the TV.

(Emphasis mine) Note the indirect shot at Apple in their last sentence. This is stark contrast to the Apple TV metaphor which allows users to select content directly from the Apple TV then wait for it to be downloaded before being able to view it.

Of course, Netflix spins "Watch Now" as a benefit, but in reality you can only watch content after it's been queued and downloaded. The interesting part is Netflix's shift from the box to the computer as the search and selection device. Apple is pitching it the other way, you don't need a computer to buy or rent content.

The other major difference between Netflix and Apple is the pricing model:

there are no extra charges and no viewing restrictions. For a one-time purchase of $99, Netflix members can watch as much as they want and as often as they want without paying more or impacting the number of DVDs they receive.

Netflix has jumped on the all-you-can-eat rental model. For US$99 (and a Netflix subscription) you get access to a subset of their catalog of movies and television programs (10,000 titles and "growing") that you can watch as often as you want. Apple, on the other hand, allows you to buy movies for US$9.99 or rent them for US$3 to US$5 each – after you've purchased their US$229 box. Advantage: Netflix

CNet's John Falcone summarized the main problems with the Netflix Player as being picture quality and catalog depth:

Those looking for the HD video quality and polished interface of Apple TV and Vudu will be disappointed. The Netflix Player is strictly barebones--you're not intended to do anything more than just dive in and watch the movies and TV shows you've already queued up via your online Netflix account. The biggest drawback--for now at least--is the dearth of quality content. Thanks to Hollywood's byzantine licensing system, less than 10 percent of Netflix's 100,000-plus library of titles is available for streaming to the Player. That means, for now, that only two of Netflix's top 100 DVDs are available for streaming: March of the Penguins and Eternal Sunshine of the Spotless Mind.

So what do you think? Who has the better offering?

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