Analyst Speculates Apple Prepping Video Subscription Service to Challenge Netflix

[Gasu E.]

I really can't see Apple getting more content at the same price as Netflix, or the same content at a lower price.

Granted Netflix can't sustain their pricing model forever, but Apple doesn't have many instances of making "better" and "cheaper" at the same time.

Netflix streaming content isn't that great. I subscribe, and I am happy for what is does, but it is more notable for what it does not. It wouldn't be that hard for Apple to duplicate the current Netflix streaming library, and offer that as a subscription as Netflix does. The big win for Apple is that they could ADDITIONALLY provide spontaneous limited-time downloads of new stuff on a pay-per-view basis.

Now, I know some of you would respond: "well, for $2 more per month I can get 1 DVD out at a time, which lets me watch XXX movies per month." Yes, that works for some people, but this requires a good deal of planning-- managing your queue, mailing and so forth. In my case, as I'm sure it is with many others, i have a family--wife, kids-- and I don't know exactly what my plan will be for the next few weeks. My personal Netflix DVD queue has a lot of Sci-Fi, but if I'm watching with my wife, we might go for a romantic comedy. Or we might just make a last minute decision to go out and skip the movie altogether. So a service that allows for more spontaneity than Netflix, at a few dollars more per month, would have massive appeal.

 

[MacManTexas56]

Only question. Why?

Some say Apple need to buy Netflix. Have those of you even considered what Netflix charges for monthly streaming?

$8

Apple will never let customers eat that much for so little. The day Apple buys Netflix, DVDs would stop, and streaming would go up to $30 a month.

Promised.

and look at the crappy content that they have for streaming. everything is super old. hopefully if apple does this, they would have new content and people wouldn't mind paying more bc the content is better.

 

[Gasu E.]

IMO Apple built this giant datacenter in order to launch its own search engine to compete with Google. Why ?

1) When Google launched Android, S. Jobbs became furious, saying that Apple respected Google and didn't try to go on the search market. He was calling for revenge. Soon after, Apple started to build this data center.

2) Google is now a strong competitor to Apple, and Apple isn't free to not use (yet) Google's services, like their search engine, Google Maps and so on. Clearly, Apple can't consider that with an happy heart.

3) This new datacenter is really much too big for just handling the few things rumors talked about : MobileME, video, etc. It's obvious they are watching bigger.

How do you monetize Revenge?

 

[JulienNantes]

How do you monetize Revenge?

With iAdd. This would be the whole point : winning the search engine market to get the internet advertizing market out off Google.

Which brings me to this fourth clue :

4) It makes sense if Apple will turn iAdd into a success.

 

[G4DP]

Would it be magical and revolutionary?

Oh wait it been done for years, silly me.

 

[bobsentell]

IMO Apple built this giant datacenter in order to launch its own search engine to compete with Google. Why ?

<snip>

I think they built a giant datacenter to stay in front in the cloud race. With Amazon introducing a cloud service, HP pushing hard for cloud services, and even Microsoft singing the praises of cloud services, I think Apple see the future for selling its products will involve deep cloud integration. In order to do that, they need a cloud. Ergo, datacenter.

 

[reden]

Is this the same analyst that speculated Apple was launching the iPad 3 this year?

 

[MacManTexas56]

Netflix streaming content isn't that great. I subscribe, and I am happy for what is does, but it is more notable for what it does not. It wouldn't be that hard for Apple to duplicate the current Netflix streaming library, and offer that as a subscription as Netflix does. The big win for Apple is that they could ADDITIONALLY provide spontaneous limited-time downloads of new stuff on a pay-per-view basis.

Now, I know some of you would respond: "well, for $2 more per month I can get 1 DVD out at a time, which lets me watch XXX movies per month." Yes, that works for some people, but this requires a good deal of planning-- managing your queue, mailing and so forth. In my case, as I'm sure it is with many others, i have a family--wife, kids-- and I don't know exactly what my plan will be for the next few weeks. My personal Netflix DVD queue has a lot of Sci-Fi, but if I'm watching with my wife, we might go for a romantic comedy. Or we might just make a last minute decision to go out and skip the movie altogether. So a service that allows for more spontaneity than Netflix, at a few dollars more per month, would have massive appeal.

yeah we used to do netflix for a few years. when we got dvds most of the time they would sit for weeks or months so the service didn't make sense. Some of the time we would get the movie in the mail and decide that's not what we wanted to watch.

If you have plenty of content that you can stream at any moment it gives u more flexibility in what you want to watch.

Now we do streaming only and only pay for what we watch. We have an appleTV and a Roku so we can get content from amazon video on demand as well.

 

[canyonblue737]

exactly. this analyst doesnt know what he's saying. Apple would never off a competing service in a hardware product if they planned to compete against it.

this story is bunk

I think I agree for other reasons but you aren't correct... iBooks was offered day 1 on the iPad. SO WAS Kindle for iPad.

 

[Rodimus Prime]

Limited only to Apple devices would mean it would be DOA. Sorry but being limited to costly Apple devices is a huge issue over all on why I do not buy movies from Apple Store and sure as hell would not stream this.

Netflix to my 360 I like because that reduces me having to buy some other device. Netflix works with other things I want/need and does not require me buying some special box to watch it on my TV.

 

[SFStateStudent]

Competition should drive the price down of the over-inflated Netflix...

 

[marksman]

I really can't see Apple getting more content at the same price as Netflix, or the same content at a lower price.

Granted Netflix can't sustain their pricing model forever, but Apple doesn't have many instances of making "better" and "cheaper" at the same time.

Have you heard of that tablet device Apple makes? The iPad or something like that?

 

[toddybody]

Ya. Just like Apple went pro-consumer with $.99 songs instead of buying the entire CD. Apple is not good for the consumer. Nopes. Trust me, its not.

Totally, cause Apple's video content pricing mirrors it's song's. Oh wait?! Apples and Oranges dude...lets make a really simple example

Netflix: 7.99 Unlimited Streaming*
Glee Season 1*
BSG Seasons 1-4*
Dexter Seasons 1-2*
(You get the idea)

Apple: Pay Per View
Glee, Season 1 = $22.77
BSG Seasons 1-4 = $72.27
Dexter Seasons 1-2 = $60.39
(You get the idea)

Yeah, pro-sumer... LOL

 

[Diveflo]

- their servers are located in the USA, so I don't know if it's enough to serve streaming media worldwide. Do they currently have servers in other countries for the international iTunes Stores?

Technical issues aside, however, it all boils down to selection and price.

I'm renting a lot of content through the iTunes Store (Apple TV) with an US account and it works like a charm (I'm from southern Germany). HD content can be watched as advertised almost instantly. So either their US servers have enough bandwidth or there really are servers in Europe.

 

[Mrawr]

Why did Apple add iPod / iTunes support to a Motorola phone and then the next year introduce their own phone? Apple has the morals of an alley cat.

Apple support on a Motorolla device, not the other way around. At least to my knowledge, they didn't take that support away. I can't see Apple allowing users to continue to stream Netflix on ATV2 if they introduce a service that directly competes.

Maybe you're right, though. I won't be a happy camper though... Take away Netflix and my ATV2 is an overpriced movie trailer player.

 

[LagunaSol]

Apple should just buy Netflix.

Why would Apple want a bunch of warehouses full of DVDs?

 

[richardhunt]

All this at a time when ISP's are moving to metered broadband in the US. I have yet another excuse to move to a "business class" service, until those get capped.

 

[manu chao]

Apple advantages:
- could be launched in a lot of countries (probably everywhere there currently is an iTunes Store)

Even though the iTunes Store exists in a lot of countries, far from all countries that have the store also have movies on offer. In Switzerland for example, movies only started to being offered last year. In Germany that happened in 2009.
Checking the first six letters of the alphabet (ie, countries starting with a,b,c,d,e,f), only six out of 23 offer movies.

 

[BJMRamage]

Apple creates NetFlix-like Service.
Adds it to Mobile Me.
Adds 25gb cloud storage to Mobile Me.
Keeps Mobile Me same price.

$100 per year gets you streaming video (netflix-like) - cloud storage – revamped MobileMe.
ONLY compatible with iPods/iPhones/iPad/AppleTV.

This gets people to buy more Apple products, gets them into a recurring subscription model pleases those that wanted more with Mobile Me.
Keeping the price the same, they sell more AppleTVs, and phones/pods.
They added Netflixe to AppleTV to get more people to buy them….then they will offer this deal.

 

[manu chao]

I'm renting a lot of content through the iTunes Store (Apple TV) with an US account and it works like a charm (I'm from southern Germany). HD content can be watched as advertised almost instantly. So either their US servers have enough bandwidth or there really are servers in Europe.

Apple (as any company of any significant size offering things to download) uses CDNs all over the world which act as sort of regional and local caches. These CDNs are likely to be operated by third-parties.

 

[SmileyBlast!]

Netflix advantages:
...

Apple disadvantages:
...
- their servers are located in the USA, so I don't know if it's enough to serve streaming media worldwide. Do they currently have servers in other countries for the international iTunes Stores?
...

Yeah, We need to see confirmation that there are similar Data Centers being deployed around the world. I guess Europe would be next. But the Apple TVs do seem to cache the stream for a bit before playing the video so maybe that alone can compensate for the lag users would otherwise experience by streaming from North Carolina Servers. If the Buffer can hold a few minutes and you have a good internet connection then you should get a great viewing experience.

 

[grmatt]

Hmmm... My Theory

Really just putting two and two together. What was the one thing the many people liked better about the Zune than the iPod? Zune Pass (subscription-based music downloads). Essentially, just from a technical standpoint, Zune Pass was to music, what Netflix is to movies/tv.

Apple could indeed be combining the two into a subscription-based music/movie/tv service.

 

[Westside guy]

Competition is good - but I can't see myself giving up my Netflix subscription just to purchase the same services from Apple. They'd have to blow me away with features (or title availability) to get me to switch.

I'm paying $8.99 a month right now for unlimited streaming and one DVD a month (which generally just sits by the TV for weeks at a time - but that's another subject). Even if Apple somehow managed to undercut Netflix on price - it's already low enough that a chance to drop it further isn't a significant factor for me.

 

[Blakjack]

Apple support on a Motorolla device, not the other way around. At least to my knowledge, they didn't take that support away. I can't see Apple allowing users to continue to stream Netflix on ATV2 if they introduce a service that directly competes.

Maybe you're right, though. I won't be a happy camper though... Take away Netflix and my ATV2 is an overpriced movie trailer player.

if Apple were to build ther own TV, They wouldnt build an ungodly amount at first, would they. wouldnt they test the waters a bit. With the better content and a subscription not too much higher than NETFLIX, I think they would have a monster.

 

[spazzcat]

Totally, cause Apple's video content pricing mirrors it's song's. Oh wait?! Apples and Oranges dude...lets make a really simple example

Netflix: 7.99 Unlimited Streaming*
Glee Season 1*
BSG Seasons 1-4*
Dexter Seasons 1-2*
(You get the idea)

Apple: Pay Per View
Glee, Season 1 = $22.77
BSG Seasons 1-4 = $72.27
Dexter Seasons 1-2 = $60.39
(You get the idea)

Yeah, pro-sumer... LOL

You know Apple doesn't set the prices?