You can watch your own movies, but they need to be in a format playable by iTunes. You just have to copy or save them to the movies folder, and then the apple tv connects to your computer to stream them.
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Clarification: the movies folder in iTunes, not the Movie folder on your mac. Unless they changed that and I missed it.
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Actually, Apple put a lot into the development of the Netflix app on ATV, which is what makes is vastly different from even other versions of Netflix apps that were around at the time. Apple demanded it follow their same flow and design as the rest of the ATV. That was also before they began adding other apps....
I agree on the streaming subscription pricing.
I feel like all these ala carte subscriptions really cost more than cable in the end. It's a rough balance. I'm waiting for cable to ditch their music channels for an on demand service in the future....