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MacRumors
Jan 14, 2008, 06:54 PM
http://www.macrumors.com/images/macrumorsthreadlogo.gif (http://www.macrumors.com)

As we approach the Macworld Expo Keynote, a few industry news items that may be relevant to Apple:

Amazon, Pepsi and Sony
As previously reported (http://www.macrumors.com/2007/11/30/pepsi-to-team-up-with-amazon-for-superbowl-mp3-giveaway/), Amazon and Pepsi are teaming up (http://ap.google.com/article/ALeqM5iu55iarOJbHDX2zu8TRZMa6leHOQD8U5UUF80) for a 1 billion song giveaway to be launched during the Superbowl.

Meanwhile, Sony announced (http://www.siliconrepublic.com/news/news.nv?storyid=single9992) that it was the last of the major record labels to join Amazon and is now offering their catalog (DRM free) on Amazon's MP3 Download Store.

Netflix Streaming
In face of rumors that Apple would be entering the movie rental arena, Netflix announced (http://www.informationweek.com/news/showArticle.jhtml?articleID=205604459) that they are allowing customers to stream an unlimited number of movies for a flat monthly fee (starting at $8.99). This service offers customers access to over 6000 titles for streaming. Prior to this announcement, streaming downloads were subject to usage caps based on your subscription plan.



Article Link (http://www.macrumors.com/2008/01/14/amazon-pepsi-and-sony;-netflix-streaming/)



The Truth
Jan 14, 2008, 06:58 PM
I think Apple will have plenty of competition in the movie arena.

island
Jan 14, 2008, 06:58 PM
Sounds interesting if Netflix will have it work for Apple users, not just Windows.

jeejeebu
Jan 14, 2008, 07:04 PM
Sounds interesting if Netflix will have it work for Apple users, not just Windows.

Seriously. Still waiting on this. Netflix claims it's because Apple makes obtaining the DRMs difficult, somehow, and the studios have only approved the use on Windows machines. Does anyone with any knowledge on the topic want to explain to me how this makes sense?

kainjow
Jan 14, 2008, 07:06 PM
Seriously. Still waiting on this. Netflix claims it's because Apple makes obtaining the DRMs difficult, somehow, and the studios have only approved the use on Windows machines. Does anyone with any knowledge on the topic want to explain to me how this makes sense?

Yes, it's simple. Microsoft licenses out the DRM technology for playback with Windows Media Player, and Apple does not for QuickTime. Thus, you're up to your own for playing back DRM'd media on Mac OS X.

InkMaster
Jan 14, 2008, 07:07 PM
"Hurry hurry hurry, release something before Apple so it doesn't look like we're behind"

/dev/toaster
Jan 14, 2008, 07:08 PM
Its disappointing that Netflix (streaming) isn't available on the Mac. I would much rather spend ~$10 a month then the $70+ a month I am already spending for all the premium channels on Comcast.

If they open up iTunes rentals to the AppleTV with *good* quality I will be all over it. I already own an AppleTV hooked up to a 61" HD TV. So, the quality needs to be at least DVD level, which I know is a tall order.

twoodcc
Jan 14, 2008, 07:08 PM
yeah, Apple has some competition in this area. we'll see what apple has up their sleeve soon though

MarlboroLite
Jan 14, 2008, 07:09 PM
Good for Netflix; competition is good for consumers. If Apple really intends to charge 4 bucks for a 24 hour self destructing rental then I say good for Netflix and I hope they force Apple to rethink their ripping off of their customers.

kironin
Jan 14, 2008, 07:11 PM
Netflix streaming is available on the Mac.

I have been watching the Sci-Fi series The Surface recently using my MacBook and VMWare Fusion. It works fine.

blueflame
Jan 14, 2008, 07:14 PM
I have used many browsers. unless you are talking running bootcamp or parallels, which is a joke and overkill for such an operation.
Netflix streaming is available on the Mac.

I have been watching the Sci-Fi series The Surface recently using my MacBook and VMWare Fusion. It works fine.

cazlar
Jan 14, 2008, 07:15 PM
I recently got Parallels running on my Intel Mac mini, mainly to try out the Netflix streaming option (as I was "paying" for it with my subscription, I might as well use it!). The movie selection is fairly woeful, but there's the occasional thing that is worthwhile, and the streaming worked quite well. It does have a fairly good bunch of TV shows which I might take advantage of though (Office, 30 Rock, Red Dwarf, Little Britain, etc).

peestandingup
Jan 14, 2008, 07:17 PM
yeah, Apple has some competition in this area. we'll see what apple has up their sleeve soon though
I dont think Apple will be able to beat this deal. Apple's not one for subscriptions, so I bet it'll be like $2.99 per rental. But, with the ability to play those files briefly on iPods & AppleTV.

For me, thats not worth it. But it may be for some. I'll stick with all you can watch for $9 via Netflix. Just sucks that I have to use BootCamp, but oh well.

mainstreetmark
Jan 14, 2008, 07:19 PM
Good for Netflix; competition is good for consumers. If Apple really intends to charge 4 bucks for a 24 hour self destructing rental then I say good for Netflix and I hope they force Apple to rethink their ripping off of their customers.

I, too, am happy to see Netflix back out in the lead. When blockbuster copied their service (down to the envelopes!) I was pretty disappointed. Then, when I myself joined blockbuster over netflix when I moved, because of the two in-store rentals that blockbuster gives, I thought Netflix was cooked.

Now I'm back on Netflix, and feel good about myself.

Beaumon
Jan 14, 2008, 07:19 PM
But there is a Mac version of windows media player isn't there?

-Beau

kainjow
Jan 14, 2008, 07:21 PM
But there is a Mac version of windows media player isn't there?

-Beau

Yes, but Netflix uses DRM which cannot be played back on the Mac yet, only Windows.

theanimala
Jan 14, 2008, 07:22 PM
I recently got Parallels running on my Intel Mac mini, mainly to try out the Netflix streaming option (as I was "paying" for it with my subscription, I might as well use it!). The movie selection is fairly woeful, but there's the occasional thing that is worthwhile, and the streaming worked quite well. It does have a fairly good bunch of TV shows which I might take advantage of though (Office, 30 Rock, Red Dwarf, Little Britain, etc).


I believe that this annoucement means they have many more titles available then they had in the past. Their page says they have over 6000 movies to watch over the internet, so there's a good chance you will find something you want to watch now.

I have used many browsers. unless you are talking running bootcamp or parallels, which is a joke and overkill for such an operation.

I agree it's overkill, but it works. I have had no luck in getting Sirius steamed to my iMac that I use Fusion to run Sirius player on XP to get my Howard Stern fix...

Flail
Jan 14, 2008, 07:22 PM
As far as the Amazon/Pepsi/Sony thing, I think that's fantastic. I'm sure the vast majority of the songs bought/given away there will land on ipods anyway.

As far as the Netflix thing, that's a little odd. Are they shooting themselves in the foot, rushing to announce something the day before a rumored announcement? If Apple debuts something that makes as big of a splash as AppleTV has (wha?), perhaps Netflix would have been better off holding their position. Whether that's the case or not, I think it's quite a good deal and will help Netflix devour a little more Blockbuster.

Given this news though, I'd love to hear tomorrow that Netflix is now downloadable to AppleTV. I would squeal with joy right up to the point when my girlfriend tells me we can't get an AppleTV. :o

pdjudd
Jan 14, 2008, 07:22 PM
But there is a Mac version of windows media player isn't there?

-Beau
Yes, but it cannot handle DRM. No player on the Mac supports Windows DRM since MS refuses to support it.

SthrnCmfrtr
Jan 14, 2008, 07:24 PM
"Hurry hurry hurry, release something before Apple so it doesn't look like we're behind"

If they deliver it (and I'm sure they will), they won. Sure, the hidebound Mac and Linux users won't be able to avail themselves of it, so they'll just have to console themselves with the other 95% of the population.

If Apple's rental deal is as bad as we hear ($4/24 hours), then Netflix needn't have worried. Unlimited movie streaming for such a low price to combat the iTunes rentals is like swatting a fly with a Buick.

In fact, I would go so far as to say that this subscription plan succeeds where iTunes has failed, and if my Apple TV could stream Netflix videos, I wouldn't hesitate to rejoin.

ChrisA
Jan 14, 2008, 07:25 PM
I think if you wanted to use the Netflix service on your Mac you'd just get VMware Fusion and run Windows inside of that. It would pay for itself given the price difference between Apples $4 per move and Netflix's unlimited subscription service.

I have low expectations for this year's announcements. I think one more year that Steve does not talk about Macs at Mac World. Last year it was cell phones this year movie rentals. Next year what? A line of Apple designer clothing?

joeshell383
Jan 14, 2008, 07:26 PM
But there is a Mac version of windows media player isn't there?

-Beau

It hasn't been updated or supported in several years and it does not work with protected WM content.

I think one more year that Steve does not talk about Macs at Mac World. Last year it was cell phones this year movie rentals. Next year what? A line of Apple designer clothing?

Are you nuts! Last year it was not cell phones, it was the iPhone, Apple's biggest product since the iPod. Also, have you not heard about the ultraportable rumors going on for months?

bacaramac
Jan 14, 2008, 07:30 PM
unless netflix updated their library for streaming, it sucks. I like new releases for streaming or atleast newer.

nagromme
Jan 14, 2008, 07:31 PM
I'm all in favor of having Amazon, iTunes (Plus, please) and Netflix all be strong options that I can use at will.

Just as long as Netflix online movies stop being Windows-only, and start having a better selection--like Netflix offers in DVD form.

termite
Jan 14, 2008, 07:32 PM
Netflix's move is nothing. The time-cap on movie watching was already pretty large compared to my desire to watch anything. I bet they did this because none of their existing subscribers were coming anywhere near the cap.

Watching on Netflix's really bites compared to Hulu. Though Hulu is advertiser supported, Hulu has better quality, is Mac-compatible, and is a much nicer experience even if you are using Windows.

MacViolinist
Jan 14, 2008, 07:35 PM
I can't help but see this as Amazon using the billion songs as a loss-leader to generate interest in its store. Granted, in this case, it's clear that Pepsi is helping out, but anyway you cut it, it's the same principle. Pepsi gets advertising out of the deal, so it's at least reasonable from that perspective, but Amazon has to be taking some of the hit as well.

A number of big-box stores will take a hit on DVD sales to get customers in the door and in the mood to spend. This seems to work pretty well for retailers.

But I can't, off the top of my head, think of any instance where taking losses on a product to boost market-share has been particularly successful at generating repeat business in that product-arena after you jack up the prices and begin turning a profit. It seems just the opposite. Consumers turn elsewhere.

I don't have numbers to back this up, but my general impression is that loss-leaders only work when one product's losses subsidize a different product's sales. And perhaps that's Amazon's angle: "Shop at Amazon; get a free song; buy something else while you're here."

That might be a great promotional idea, but in the long run for a music store, I don't see it working.

Here's a bad analogy:

A lot of bars in the D/FW area will have big opening parties. They advertise free booze every Tuesday for a month or something. They get slammed every Tuesday for a month, report a huge volume of "business", and that, generally speaking, the grand opening gala was a smashing (or is that smashed?) success.

The problem is that after a month, they've lost a huge amount of money. Now they have to start charging. I don't go to these places after the free booze dries up, for a couple of reasons:

1. You pay the "New! Chic! Happening-Place! Tax." Drinks are pricier than other places that have been around longer.

2. I can't stand "New! Chic! Happening-People!"

As far as the (lack of) DRM incentive goes, I think a couple things can be briefly pointed out in gross generalizations:

1. The vast majority of consumers don't mind Apple's DRM. Either they don't run into the limitation very often, or they don't care about them. If they did, iTunes wouldn't be successful.

2. An even greater majority of consumers fail to make their purchase decisions on "Principle." If they did, retailers like Wal-Mart wouldn't be in business.

The idea of what the consumer wants vs. what a retailer is offering is hugely complex, and I won't attempt to address it all now. Just boiling the idea down to its barest concept marks this as a losing proposition for Amazon and the companies that partner with it to distribute music.

ChrisA
Jan 14, 2008, 07:38 PM
If Apple's rental deal is as bad as we hear ($4/24 hours), then Netflix needn't have worried. Unlimited movie streaming for such a low price to combat the iTunes rentals is like swatting a fly with a Buick.

"swatting a fly with a Buick"? No I'd call it a "preemptive knockout punch." They've killed a competitor before the fight even started.

I'd say it is such a bad deal for Apple that I'd not be surprised if Apple didn't pull the movie rental announcement from the Keynote. What an embarrassment to have to stand on stage of talk about $4 per 24 hours the day after Netfliix announces "unlimited" viewing. If they leave the segment in, Steve will have to be really good to keep the audience from laughing out loud. I'm 100% sure that everyone in the live audience will come in knowing about Netflix's new deal.

kresh
Jan 14, 2008, 07:49 PM
"swatting a fly with a Buick"? No I'd call it a "preemptive knockout punch." They've killed a competitor before the fight even started.

I'd say it is such a bad deal for Apple that I'd not be surprised if Apple didn't pull the movie rental announcement from the Keynote. What an embarrassment to have to stand on stage of talk about $4 per 24 hours the day after Netfliix announces "unlimited" viewing. If they leave the segment in, Steve will have to be really good to keep the audience from laughing out loud. I'm 100% sure that everyone in the live audience will come in knowing about Netflix's new deal.

Netflicks could offer to pay me a quarter for every movie I watch and I still would not be interested. All I want is content for my AppleTV, not more time spent in front of my computer.

It does appear that the video industry is lining up a vast coalition of "Anything but Apple".

theBB
Jan 14, 2008, 07:53 PM
"swatting a fly with a Buick"? No I'd call it a "preemptive knockout punch." They've killed a competitor before the fight even started.
Well, Netflix announcement does not really matter, as their streaming library is very limited and the quality is fairly poor. (I did not realize there was going to be a fight over a loads of crummy old movies and TV shows that they are giving away along with only three or five decent movies.)

Nobody is going to offer $9 a month deal for recent movies and TV shows that will let you cancel your cable subscription and stop renting movies from a real store. Stop dreaming. That won't allow studios to pay their bills.

kresh
Jan 14, 2008, 07:58 PM
Sure, the hidebound Mac and Linux users won't be able to avail themselves of it, so they'll just have to console themselves with the other 95% of the population.


That's just not true and further propagates old and tired myths. Man some people have taken this hook, line and sinker. Your saying a 95% Windows marketshare equates to 95% of computer households. That's just a fallacy since you are lumping all the corporate boxes into the mix, unless the Corporate world is suddenly going to start letting their employees watch movies at work.

granex
Jan 14, 2008, 08:03 PM
I am very interested in the Netflix option, but there is still more to this battle than price (although it may be the deciding factor). I haven't used the Netflix watch on a demand feature (on a Mac, you know), but I wonder about the quality of the picture. I can't find any info on this on the Netflix site.

Apple's offering may beat Netflix on features, if not price. I would love to be able to stream HD video to an AppleTV type box for $9/month, but we aren't quite there yet. If video quality remains poor, then the stream will be great for TV shows and kids movies, but probably not up to snuff for real movies on a high quality TV set. Why did you buy that expensive TV in the first place, then?

By the way, I'm still using my 20 year old JVC set until I get a bit more clarity on how all of this is going to shake out. I do feel that this is the year that things are going to finally move.

kwikdeth
Jan 14, 2008, 08:03 PM
i thought netflix was going to switch to using Silverlight for their streaming service, which does work on macs?

yg17
Jan 14, 2008, 08:13 PM
"Hurry hurry hurry, release something before Apple so it doesn't look like we're behind"


Netflix has had online streaming for about a year now.....

theBB
Jan 14, 2008, 08:16 PM
I am very interested in the Netflix option, but there is still more to this battle than price (although it may be the deciding factor). I haven't used the Netflix watch on a demand feature (on a Mac, you know), but I wonder about the quality of the picture. I can't find any info on this on the Netflix site.
I don't know the maximum theoretical quality, but Netflix did not look as good as streaming TV shows from abc.com. Besides, for some reason, after about half an hour or so Netflix claims the quality of our connection is not very good, so it automatically reduces the quality even further. It is nice as a free option to your already existing subscription, but not very exciting at the moment.

peestandingup
Jan 14, 2008, 08:32 PM
Well, Netflix announcement does not really matter, as their streaming library is very limited and the quality is fairly poor. (I did not realize there was going to be a fight over a loads of crummy old movies and TV shows that they are giving away along with only three or five decent movies.)
Its doesnt matter. Netflix is the king of movies & they wanna be the king of online distribution. The online library will get better. They have a HUGE user base already giving them leverage. Apple for the most part is very new to the movie game. iTunes video store wasn't a runaway hit like they wanted it to be because they didn't give the user much choices. It was either download & pay full price for ownership or nothing at all.

Stevie got it wrong on this one because he wanted to treat videos like music & the only reason they're going rental is because they're basically being forced to by competitors & studios. Thats pretty well documented.

Apple are the ones playing catchup here, not Netflix.

pavelbure
Jan 14, 2008, 08:41 PM
"Hurry hurry hurry, release something before Apple so it doesn't look like we're behind"

what are you talking about ?

Netflix has had online streaming for about a year now..... i think it started last may or so.

unless netflix updated their library for streaming, it sucks. I like new releases for streaming or atleast newer.

exactly. alot of the "watch it now" movies are terrible and most aren't even close to being popular or well known.

happydude
Jan 14, 2008, 08:54 PM
too bad apple loses out on the pepsi music deal, that was a good one and great publicity and a good deal. i switched from diet coke to diet pepsi because of the deal in the past. big time marketing wins another sucker. ah well.

as for nextflix, their online movie availability sucks, big time. no major releases, certainly within the past decade. only a few tv shows are worthwhile, so i'm sure not sweating the non-apple compatability. now, if they made their entire catalogue open as soon as their physical media, dude, that would be another story.

theBB
Jan 14, 2008, 09:00 PM
Its doesnt matter. Netflix is the king of movies & they wanna be the king of online distribution. The online library will get better. They have a HUGE user base already giving them leverage. Apple for the most part is very new to the movie game.

I have no doubt that Netflix online library will get better, but I am sure it will not be this cheap when it becomes any decent. In that respect, Amazon and Tivo partnership, Xbox or cable TV on demand services are far bigger players. At the moment, Netflix is irrelevant for online movie rental business.

However, I agree, Apple should have provided movie rentals from the beginning. They have lost a year, but I don't see anybody really gaining that much ground, so it is not a big loss. In any case, online movie rental is not a revolutionary product. It will be a more convenient or cheaper alternative to what we already have. Online music was different. It gave consumers the option to buy only the songs they liked instead of paying for 10 other filler songs on a CD. It also popularized podcasting. Relatively speaking, this is bound to be ho hum.

ariza910
Jan 14, 2008, 09:29 PM
This Amazon/Pepsi promotion is interesting because the songs will work on iPods and the downloads even sync right up with iTunes after they download from Amazon.

I hope Apple takes the high road with this one and continues to allow Amazon to use the images of the iPod in their ads for their Amazon MP3 Store. (Currently Amazon shows a stack of MP3 Players with the iPod right there front and center). I would hope the Apple goes as far as encouraging or even partially funding the Amazon MP3 store ads that feature the iPod on them.

In the end I cant see Amazon taking market share away from iTunes for one simple reason - the Amazon MP3 store is absolutely impossible to navigate! Reminds me of the failed Google Video store - great concept but poor user experience.

chicagostars
Jan 14, 2008, 09:43 PM
I wonder how many of the one billion song codes will be redeemed and how many will go unused.

limecat
Jan 14, 2008, 09:50 PM
Netflix is working on streaming support for Macs using Silverlight. They demoed a preliminary demo app last May. Silverlight 1.1 supports cross platform DRM so that's the main reason why its not out for Macs yet.

http://www.hackingnetflix.com/2007/05/netflix_demos_s.html

Neato.

peestandingup
Jan 14, 2008, 10:10 PM
Netflix is working on streaming support for Macs using Silverlight. They demoed a preliminary demo app last May. Silverlight 1.1 supports cross platform DRM so that's the main reason why its not out for Macs yet.

http://www.hackingnetflix.com/2007/05/netflix_demos_s.html

Neato.
I believe that it will only support Intel Macs. Thats a whole lotta PPC people left out. Intel Macs are still pretty new relatively speaking.

idunnokyd
Jan 14, 2008, 10:50 PM
I believe that it will only support Intel Macs. Thats a whole lotta PPC people left out. Intel Macs are still pretty new relatively speaking.

FYI.... M$ Silverlight does support Safari and Firefox.... well as long as you have OSX:cool:

http://en.wikipedia.org/wiki/Microsoft_Silverlight

bommai
Jan 14, 2008, 10:54 PM
Netflix will be severely handicapped until a set-top box can be used - which may not be until late summer (LG is a partner).

If Apple introduces a compelling product like an upgraded AppleTV, they can turn the table on Netflix.

The iPod was not the first hard drive based MP3 player nor was it the cheapest. However, it was the first one to use a 1.8" HDD and a beautiful user interface.

If AppleTV can be a standalone product that a Joe6Pack can use (as long as he is able to get the home networking going!!) to choose and rent a movie and then watch it in a few minutes - Apple will win. Most users are not movie addicts that they will sit in front of their computer streaming movies one after another. However, if a lot of people get tempted and buy AppleTV and rent movies, Apple makes a ton of money in selling hardware.

donlphi
Jan 15, 2008, 12:13 AM
http://www.macrumors.com/images/macrumorsthreadlogo.gif (http://www.macrumors.com)

As we approach the Macworld Expo Keynote, a few industry news items that may be relevant to Apple...


Netflix Streaming
In face of rumors that Apple would be entering the movie rental arena, Netflix announced (http://www.informationweek.com/news/showArticle.jhtml?articleID=205604459) that they are allowing customers to stream an unlimited number of movies for a flat monthly fee (starting at $8.99). This service offers customers access to over 6000 titles for streaming. Prior to this announcement, streaming downloads were subject to usage caps based on your subscription plan.

Article Link (http://www.macrumors.com/2008/01/14/amazon-pepsi-and-sony;-netflix-streaming/)

So this extra $8.99 doesn't include the regular movie swapping? Interesting...

I think I pay $14 a month for my netflix subscription. First of all, I'm not going to pay $9 more so I can watch movies on my computer. I already pay $140 for my comcast cable and internet. If I can't get the on demand movies onto my TV, I'm not going to do it.

I think Apple did a great job of pushing the Apple TV out a bit. They have also done a good job of kicking out Front Row on all of the new computers. I think Rental is going to be a fantastic addition to the already "user friendly" devices available from Apple.

I think for shareholders, this will be a much bigger market than the ultra portable market.

I hope nobody is let down when they don't get their macbook air for Christmas.

uNext
Jan 15, 2008, 01:28 AM
i love amazong unbox on my tivo if amazon offers this then it will just make my tivo that much better.

Regarding apple and their business model.
I cant believe people are willing to pay for per movie instead of all you can eat. That is both in music and video i see subscription based offers so much more appealing.

I mean when your done listening to music and your tired of the cd it gets put away never to be heard off it just turns into accumulated junk. Same with movies both in real life and on the computer taking up harddrive space.

I hope something big is announced tomorrow im tired of paying comcast 200+ per month. if i can limit it to 9 bucks a month and all i can watch that will save me a ton of money.

I for one welcome subscriptions....you never really own anything you buy
try to distribute something you bought pubicly and see how fast you get sued.

vixapphire
Jan 15, 2008, 02:00 AM
Yes, it's simple. Microsoft licenses out the DRM technology for playback with Windows Media Player, and Apple does not for QuickTime. Thus, you're up to your own for playing back DRM'd media on Mac OS X.

funny, windows media player works on a mac. on mine, anyway. for the past several years. go figure...

vixapphire
Jan 15, 2008, 02:03 AM
Its disappointing that Netflix (streaming) isn't available on the Mac. I would much rather spend ~$10 a month then the $70+ a month I am already spending for all the premium channels on Comcast.

If they open up iTunes rentals to the AppleTV with *good* quality I will be all over it. I already own an AppleTV hooked up to a 61" HD TV. So, the quality needs to be at least DVD level, which I know is a tall order.

Out of curiosity, and as someone who's not the biggest tv watcher in the first place, how is it a "rental" if you're downloading it to the drive on your apple-tv? does the movie stop working after a few days, or self-delete? aren't you really buying a copy of it via download? how would it be different than the tv show episodes one can by from itunes now (which aren't to my knowledge classified as "rentals")?

vixapphire
Jan 15, 2008, 02:05 AM
Yes, but Netflix uses DRM which cannot be played back on the Mac yet, only Windows.

that really is lame of them. all of them. they should learn to play together nicely.

vixapphire
Jan 15, 2008, 02:06 AM
It hasn't been updated or supported in several years and it does not work with protected WM content.



Are you nuts! Last year it was not cell phones, it was the iPhone, Apple's biggest product since the iPod. Also, have you not heard about the ultraportable rumors going on for months?

hey, you're right! the iphone isn't a cell phone at all; it's... GOD!!!:rolleyes:

FX120
Jan 15, 2008, 02:33 AM
I can't help but see this as Amazon using the billion songs as a loss-leader to generate interest in its store. Granted, in this case, it's clear that Pepsi is helping out, but anyway you cut it, it's the same principle. Pepsi gets advertising out of the deal, so it's at least reasonable from that perspective, but Amazon has to be taking some of the hit as well.

A number of big-box stores will take a hit on DVD sales to get customers in the door and in the mood to spend. This seems to work pretty well for retailers.

But I can't, off the top of my head, think of any instance where taking losses on a product to boost market-share has been particularly successful at generating repeat business in that product-arena after you jack up the prices and begin turning a profit. It seems just the opposite. Consumers turn elsewhere.

I don't have numbers to back this up, but my general impression is that loss-leaders only work when one product's losses subsidize a different product's sales. And perhaps that's Amazon's angle: "Shop at Amazon; get a free song; buy something else while you're here."

That might be a great promotional idea, but in the long run for a music store, I don't see it working.

Here's a bad analogy:

A lot of bars in the D/FW area will have big opening parties. They advertise free booze every Tuesday for a month or something. They get slammed every Tuesday for a month, report a huge volume of "business", and that, generally speaking, the grand opening gala was a smashing (or is that smashed?) success.

The problem is that after a month, they've lost a huge amount of money. Now they have to start charging. I don't go to these places after the free booze dries up, for a couple of reasons:

1. You pay the "New! Chic! Happening-Place! Tax." Drinks are pricier than other places that have been around longer.

2. I can't stand "New! Chic! Happening-People!"

As far as the (lack of) DRM incentive goes, I think a couple things can be briefly pointed out in gross generalizations:

1. The vast majority of consumers don't mind Apple's DRM. Either they don't run into the limitation very often, or they don't care about them. If they did, iTunes wouldn't be successful.

2. An even greater majority of consumers fail to make their purchase decisions on "Principle." If they did, retailers like Wal-Mart wouldn't be in business.

The idea of what the consumer wants vs. what a retailer is offering is hugely complex, and I won't attempt to address it all now. Just boiling the idea down to its barest concept marks this as a losing proposition for Amazon and the companies that partner with it to distribute music.

I still belive to this day one of the only reasons the iPod and iTunes really became sucessfull is due to Pepsi and Apple, and their billion free song giveaway. Prior to that, I only really ever saw iPods being used by hardcore Apple users who had the money to spend on a $400 player, afterwards, the first gen shuffle and mini were everywhere. Hell, I hate iTunes and even I downloaded it and installed it because I won a few free songs.

It worked for Apple.

kironin
Jan 15, 2008, 02:47 AM
So this extra $8.99 doesn't include the regular movie swapping? Interesting...



No, you have it wrong. It does include DVD's. The way it was reported here is not clear. What is meant is you have to have at least the $8.99/mo membership to get unlimited downloads. It's not an extra charge.

$8.99 is the membership service of 1 DVD checked out at a time/ unlimited per month. That's the membership I have and before now I was limited to 9 hours per month and contrary to what some else said I have been hitting that limit every month so this is good news!

I just got an email from Netflix informing me that my download streaming in now unlimited. My account no longer shows a countdown on streaming time left. Awesome!

If there is new movie release I want to see I just pop it to the top of my queue and it's the next DVD I get.

$4 movie download rentals ? AppleTV blows. what a ripoff.

MacViolinist
Jan 15, 2008, 04:40 AM
I still belive to this day one of the only reasons the iPod and iTunes really became sucessfull is due to Pepsi and Apple, and their billion free song giveaway. Prior to that, I only really ever saw iPods being used by hardcore Apple users who had the money to spend on a $400 player, afterwards, the first gen shuffle and mini were everywhere. Hell, I hate iTunes and even I downloaded it and installed it because I won a few free songs.

It worked for Apple.

You are most certainly entitled to your belief. But before you go believing stuff, the facts might be useful in tempering that faith of yours.

Apple/Pepsi didn't give away a billion tunes. Apple/Pepsi tried to give away 100 million songs and failed to do so. The actual numbers from the promotion were in the range of 5 million. Apple had to give away actual hardware a year later to make the promotion stick.

Besides that, you still fail to address my primary point. My point is that companies, in general, sell items for a loss only to subsidize the sales of different products.

You can't really say that Apple uses iTunes as a loss-leader for iTunes. If, in fact, Apple does take a hit on iTunes sales, it serves only to subsidize the hardware sales of the iPods . . . a different product, on which Apple, Inc. makes a very tidy profit.

Digitalclips
Jan 15, 2008, 06:07 AM
It is amazing how many major companies are willing to drastically alter their business models (in many cases they must be last minute knee jerk reactions and perhaps not always well thought out) because of the actions of Steve Jobs.

mrgreen4242
Jan 15, 2008, 08:31 AM
Seriously. Still waiting on this. Netflix claims it's because Apple makes obtaining the DRMs difficult, somehow, and the studios have only approved the use on Windows machines. Does anyone with any knowledge on the topic want to explain to me how this makes sense?
Apple needs to start licensing FairPlay. I suspect that some government somewhere will force them too sooner or later. It's dumb not to. They don't make much/any money off of the iTMS store anyways, so if they can make even close to what they do per download from a licensing fee then they should be happy, since FairPlay only works with Apple hardware (or iTunes on a PC) anyways.

Netflix streaming is available on the Mac.

I have been watching the Sci-Fi series The Surface recently using my MacBook and VMWare Fusion. It works fine.

That does not count. I do it with Parallels and it's a PITA work around.


Watching on Netflix's really bites compared to Hulu. Though Hulu is advertiser supported, Hulu has better quality, is Mac-compatible, and is a much nicer experience even if you are using Windows. Except Hulu is for TV shows only, right? While there are some TV shows that are on DVD available from Netflix streaming, it's a movie service.

No I'd call it a "preemptive knockout punch." They've killed a competitor before the fight even started.

I'd say it is such a bad deal for Apple that I'd not be surprised if Apple didn't pull the movie rental announcement from the Keynote. What an embarrassment to have to stand on stage of talk about $4 per 24 hours the day after Netfliix announces "unlimited" viewing.

$4 is pricey, and the terms are restrictive, but I wouldn't say that Apple's out of the game by any stretch, yet. The trouble with Netflix is that the only way to watch it (right now) is on your PC, running XP/Vista, in Internet Explorer. Blech. I know they have a box coming EVENTUALLY but it's not here now, and I'm not going to buy one unless they are really, really cheap and they improve the selection. On the other hand, I already have an iPod and a cable to plug it into my TV. If Apple would offer anamorphic downloads 640x480 would actually look pretty damn decent on a TV.

I also really, really hope they come up with a lower priced rental or even better an unlimited service for iPod screen sized video. (Well, iPhone screen sized). The studios shouldn't be nearly as worried about piracy and cutting into DVD sales with 320x240 or 480x320 content as with near DVD quality stuff. I'd pay $10-12 a month for unlimited access to iTunes video content (TV and movie) that is scaled way down to 480x320 @ 750kbps. Especially if I could access that account wirelessly with an iPhone/touch...

So this extra $8.99 doesn't include the regular movie swapping? Interesting...

I think someone might have mentioned this already, but you get unlimited access with any unlimited DVD plan, which start at $8.99 per month for 1 DVD at a time with unlimited exchanges.

On another note, I read this headline over at Digg yesterday and thought hat Netflix was ending their throttling policies... I was disappointed to see it was this. No Mac support, pretty poor selection, not very convenient to view... it's a service that just isn't there yet. Glad they are trying, though, and they seem to be on the right track with the unlimited usage and the set top box partnerships, rather than trying to get you to buy their special hardware.

I suspect that once there's a few options out there for STBs (built into next gen DVD players, maybe a game console, etc) they'll start to have a user base worth marketing at studios and they will negotiate a new library of streaming content that you'll pay extra for. You can get the older/lamer titles free with your Netflix membership, or pay an extra $5 or 6 a month to access the new (less than two or three years old) releases.

mrgreen4242
Jan 15, 2008, 08:34 AM
It is amazing how many major companies are willing to drastically alter their business models (in many cases they must be last minute knee jerk reactions and perhaps not always well thought out) because of the actions of Steve Jobs.

I wish people would saying/thinking this. This has nothing to do with Apple or Steve Jobs. They've been offering a streaming service for about a year now, they announced a set top box deal with LG a month ago, and the upgrade to unlimited viewing will only affect a tiny percentage of their users... there's not enough content for most people to come anywhere near their old monthly cap. I'm sure SOME are, but most aren't anywhere near it.

DakotaGuy
Jan 15, 2008, 09:51 AM
Netflix is working on streaming support for Macs using Silverlight. They demoed a preliminary demo app last May. Silverlight 1.1 supports cross platform DRM so that's the main reason why its not out for Macs yet.

http://www.hackingnetflix.com/2007/05/netflix_demos_s.html

Neato.

Yes I think they will go with the Silverlight solution and then we should have Netflix on our Macs as well. Does anyone know when they plan on having this available? Before summer?