Netflix Mulls Movie Download Service

By Nate Mook | Published June 21, 2006, 1:49 PM

Responding to a report in Variety, Netflix late Tuesday acknowledged that it was exploring the idea of allowing users to download movies over the Internet, but said it had no firm plans. The explanation came in a regulatory filing intended to clarify remarks made on Friday.

At the Independent Film and Television Alliance production conference on Friday, Netflix vice president of original programming Eric Besner commented that the company was developing a set-top box that could be used for digital downloading. Netflix has long said movie downloads was part of its future plans.

Variety reported the news on Sunday, claiming that Netflix had settled on a set-top box to deliver downloads to customers. But the company says this is inaccurate, and it has made no decisions on how it will roll out such a service. Netflix officials say a set-top box is only one of the possibilities.

MovieBeam currently offers a similar service that utilizes a hardware device to access movies, but it receives the content over the air with an antenna rather than the Internet.

Netflix says it is investing between $5 million and $10 million on a downloading initiative, just as it did last year, but any other remarks on the service were "premature."

Although companies like CinemaNow and Movielink are making progress in the movie download market, a number of hurdles remain. Movie studios are hesitant to hand over licensing rights for Internet distribution to third parties, and fears that digital rights management can be bypassed are still prevalent.

Apple is busy negotiating with the major Hollywood studios to bring movie downloads to its iTunes store, according to reports, but the company is facing much resistance. Apple, like Netflix, would like to establish flat fees for movie downloads like it has done for music, but the studios want variable pricing based on the popularity and age of a film.

Netflix says it will provide more details about its planned download service in January 2007 during its fourth quarter earnings announcement.

Comments

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I would love it, but I know they are going to frell it up with all kinds of restrictions it will not be worth it in the long run. SO basically. Forget about it unless your going to make it a REAL SERVICE to the consumers. Meaning being able to move it to your Ipods or MPG players, or to tivos or other HD players for viewing on TVs. And ability to burn it to a DVD+R for an extra price. But the MPAA will never allow that to happen. Its just not in their nature to allow such a good Business Model to exist. Unfortunately...

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Last i read, Netflix and TIVO were considering joining forces to stream the films but never came out with how it would occur as an update.

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I like Netflix. I do, but Cinemanow ALREADY does this. Why, why do people insist on INVADING another's niche, why?

Does Netflix think they can do it better? I think no. Cinemanow may be the biggest, I don't know, I just know they are firmly entrenched into this genre already, so why does Netflix think they can do it better? Didn't Blockbuster sue them for trying to take over the DVD business for shipping/receiving?

I am going to recant my statement about Netflix, this is why companies get sued, they can't leave well enough alone.

You have a niche, you are making a profit, why do you feel that ANOTHER company is better at it than the current offering?

I realize this is a FREE country. I realize you can start whatever business you want, but damnit, do we really need another download movie company? There are so many, I can't even keep up...

This is why I get upset at companies, they get away from what they were doing to be successful to get here, and then they spread themselves too thin, and before you know it, people get upset.

I must say,as of this writing, I think I am FINALLY understanding why people HATE Microsoft so much. I would have to agree, keep your a** over THERE! Damn, we got this!

That being said, I can appreciate another company trying to make things better, but from initial point of view, this looks like GREED!

All this time, of lambasting people for certain comments, and with this one article, I can see where GCoder, PC_Tool, mj001, fewt et. al. are coming from!

I think the light is actually coming on!

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so yer finally joining the good guys ???

lol, i'd've never imagined

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Yeah, I guess I am a bit hard headed : )

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Cinemanow/Movielink (I think movielink is bigger of the two) don't have a very large selection. The other day I was in the mood for a particular movie (Driven). Neither cinemanow or movielink offer it.

Netflix with it's 60,000 titles could easily set up a multi-terrabyte storage (Approximately 42TB if each movie is around 700MB) and rip all 60,000 DVD's to it. Instant complete DVD library (Compared to Cinemanow's few hundred). To top it off movielink/cinemanow charge too much for a less than DVD quality download (It's good, just not as good). I'd welcome netflix into the picture, especially if they can finally get the movie studios to open up downloads of still in theater movies.

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They call it market capitalism. Welcome to the world where consumer is king, and competition is the name of the game.

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It's simple. We all strive to do something and do it well. If we can do it better, then why not?

Take a look at ANY business. How long will it be in business if it just does exactly what it does today and never changes anything? Never improves? Never evolves?

It won't be in business for the long term if it doesn't do the above. That's all netflix is doing. They are a movie rental place. They started by renting via a website and shipping via snail mail. They are now looking to evolve to having downloadable titles.

It's basic business and I don't know why people get upset about. Without it, we'd never have new innovative stuff - competition drives each competitor to do what they do better and come up with new ways of doing things.

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Why are you so upset about something you can't control?

There are 3 ways to grow a business: 1) Acquisitions 2) Get new customers 3) Better farm the field you have.

Since Netflix is the biggest in it's industry and the competition is from long established companies, the chance of Netflix acquiring someone is slim.

While more people sign up for Netflix every day, the growth is not as big as it once was. Soon there will be saturation of the marketplace for DVD rentals via mail. Plus the amount of money required to acquire a new customer is high.

So that leaves #3. Netflix has a distribution network already established. The lowest hanging fruit is to sell more services to their existing customers. It costs ALOT less to sell something else to established customers instead of acquiring new ones.

It isn't that Netflix "thinks they can do it better" or that they are "invading" someone elses space. They are a company that is trying to grow by using an established customer base to sell a new product/service.

It is simple Business 101. Why fault them for that?

Seriously, someone has some anger issues..:)

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It might be worth it to download a movie to my ipod, but to download a full DVD in full clarity just doesn't make sense. I suppose it could finish downloading over night, but then you'd have to burn it, which obviously is something they couldn't allow or what on your PC or have your PC connected to your TV.

I like how the internet has made a number of things easier, but I think many things are still better off handled the old fashioned way. (i.e. netflix's current shipping methods).

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Well not sure how Netflix does it, but Cinemanow streams it via IE. After about a minute of initially starting the download, the movie starts. You can then pause, FF, Rewind, whatever during the movie. But you don't get the actual movie, its like a temp version, and once you close the window, you only have 24 hours to watch it...

So you don't have to burn it.. you can save it on your hard drive.. Hopefully they won't charge 20 bucks to download for a movie you only watch once... Cinemanow charges like 6 bucks, which I think is reasonable.. I realize others may think its high, but for good quality movies on demand, I will take it.

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Takes a few seconds before I can start watching from either place. Whole movie download takes between 20 and 40 minutes. It'll take even less when comcast rolls out the higher speed tiers in my area (16Mb).

You could also have an XBOX 360 connected to your TV. Stream it from your Media Center PC.

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It still doesn't negate the fact you need a pc connected to the TV. Or a Media Center PC.

How's the quality? I can't imagine it's as good as having the phyiscal disk and playing it in a progressive DVD player.

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wow, piracy made easier ....
sweet ...!!!

thank you netflix :)

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Agreed!

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