
Networks diss iTunes rentals, embrace Netflix instant streaming - evo_9
http://arstechnica.com/media/news/2010/09/networks-diss-itunes-rentals-embrace-netflix-instant-streaming.ars
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TrevorJ
The biggest issue I see in all honesty, is that as of now, itunes fails
completely in terms of user experience when you try to find and buy anything.

itunes is rife with things that make it HARD to buy anything.

The user flow goes something like:

-Wait for itunes to load

-type in your password

-tell it you don't want to turn on feature x or y

-click itunes store

-type something in the search box

-wait while the store freezes for 5-10 seconds

-click on what you wanted

-click on the season you wanted

-find the episode, realize you don't want the HD version

-hunt for the small link to the SD version because itunes decieds for you that you must want to pay more and get the HD version

-re-find the SD version, click 'buy'

-re login in because for some reason it asks you twice

-click the 'yes I really want to buy this popup'

-get hit with a new terms of service that you must agree to

-realize that your download hasn't actually resumed now that you've agreed to the TOS

-re-find the episode and click buy once again

-re-click the 'yes I want to buy this' button

-hunt up the 'downloads' link on the left

-find the item that you want to watch, get hit with another popup talking about how downloaded items will show up here or there when they are done downloading.

-Double click the item you want to see

-hunt for the hidden-till-you-mouse-over-it button to expand the show to full screen

Don't get me wrong I love Apple, I sing praises for them all the time, but I
know they can do _way_ better than this.

Compare this to the zune market on xbox:

-Load the market -search -click buy -click play

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rbritton
Don't forget the times when it just puts up some mysterious error that
requires you to re-enter the store and try again.

The whole thing has become the poster child for feature-creep. Have you ever
tried just browsing the App Store? It's nearly impossible to see anything
other than the few condensed lists it gives you -- there's no true browsing
that I've ever been able to find.

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ianferrel
The interesting thing to me about this is that the media companies seem
happier to take a flat fee than per-viewing fees for episodes, which seems
counter to the general strategy of making people pay every time they watch
something. I can think of for this are:

1\. Their models show that they get more money from the flat fees via Netflix
than from per-rental fees. 2\. They prefer the steadier payments that flat-fee
library access provides to more 3\. They think that $0.99 is a bad price from
a customer psychology standpoint.

This is obviously not an exhaustive list, but I think (3) is an interesting
point. If $.99 is now the de facto "cheap impulse buy" price point, is it
possible that television execs don't want people thinking about TV that way?
When watching a TV show can be compared with a fun little iPhone game or a
single song, does it stop being a compelling purchase?

I think they'd rather that people feel they need a recurring subscription to
television, or pay much more per episode to get a "permanent" archive of it.
Both mechanisms encourage people to overindulge in and overvalue television,
while individual payments for rented shows do not.

~~~
jerf
They may also have learned from the ever-ongoing micropayment failure. When
prices start getting down to $.99, mental transaction costs start to matter
more than the dollar costs.

I'm currently on the $8.99 plan for Netflix and probably wouldn't switch to
the all-streaming plan even if they offered it. At my usage rate, .99/movie
would be cheaper for me. But I would still rather hand over $8.99 a month and
not _think_ about the dollar per streaming movie than to individually watch
every dollar going out.

This is twice as true if that dollar is for some BS "limited time rental", now
I'm watching every dollar go out _and_ I'm watching the clock. I am happy to
pay a bit more to avoid this mental stress.

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andjones
I am curious about why Netflix has succeeded so well with regard to streaming
movies and so much TV content. There are competitors, Hulu and YouTube, but
Netflix seems to be winning. I think there are three possibilities:

(1) They got lucky. Netflix made the good deals early on. After a few of
these, the deals simply snow ball.

(2) Netflix has a captive audience created through their DVD rental service.
Netflix gives us DRM'ed content we can view online and we applaud it because
we already love getting those red envelopes in our mailbox.

(3) Their distribution network is superior and is the best to deliver all this
content.

To me (2) seems the most likely. Perhaps is a combination of all 3.

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evo_9
I think you hit it with #2.

Netflix created a huge following of normal, non-techie folks with their
brilliant distribution 'hack' (aka using regular mail); when people started to
see Netflix on their xboxes and ps3's, they understood what they were about
already and it was easier for them to build up a following on the digital
front.

Imagine if they'd tried to do that first - aka bypassing the whole mail/red
envelop thing - people wouldn't have a clue what they were about or why it was
awesome.

~~~
Qz
I always wondered why they were called 'Netflix' when you only got DVDs in the
mail.

Actually no, I think it was fairly obvious they were intending to stream stuff
online from the start and the mail thing was just the setup.

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gamble
The success of the iTunes music store is huge impediment for Apple in video,
tv, and books. Content owners look at the way Apple dominates the music retail
business, and resolve to do anything rather than let another Apple service
achieve near-monopoly status. The problem is that the results have been sucky
and patchwork, with piracy the defacto winner.

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shortformblog
I think the part that Ars isn't mentioning is that Jeff "devalues our content"
Zucker announced his departure today, so it's possible he may no longer
represent his company's overall position on the topic. To me, the move seems
to reflect a disrespect of Zucker's leadership as much as it does a diss on
Apple.

Also, it's not like any of this hurts Apple anyway. They're a hardware
business first and I have to imagine their margins won't be hurt by ceding a
breakeven TV business to Netflix or Hulu.

Other factors at play: Netflix often sets up lump-sum deals with content
owners instead of per-item deals. And those deals as a whole are way more
attractive than $0.99 rentals for shows which may not even be as popular in
the long-term:

[http://shortformblog.com/tech/netflix-slowly-but-surely-
beco...](http://shortformblog.com/tech/netflix-slowly-but-surely-becoming-a-
movie-studio-cash-cow/)

Fact of the matter is, Netflix writes big checks. Which might make them more
attractive to old-school execs than Apple's model, which is a lot less like
what they're used to than Netflix is.

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enlil
I always wonder were amazon video on demand is in these discussions. I find
that service much more comfortable to use and you can redownload your videos
or even watch them in the browser. I wonder why this is not getting more
attention

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warfangle
I'm curious as to why $.99 is 'devaluing' the rental. Renting a DVD is $5 (or
$5-15 a month), and usually has 3-5 episodes on it. It's a little cheaper, but
not by much at all..

