Apple Versus Netflix: The Digital Entertainment War

Posted by Brandon Hann  /   April 14, 2011  /   Posted in Entertainment, Movies, Technology  /   No Comments

I just talked about this yesterday and it looks like the rumors are already gaining momentum. The debate about whether Apple would try to take on Netflix in their ability to serve up digital content to the masses has the community jumping. The evidence? A huge, brand new data center built by Apple in North Carolina is on the verge of going operational.

This data center is said to rival those of other media companies like Google and Microsoft. Even better, Apple is already planning to build another one! All this information points to Apple’s desire and ability to be the leader of digital entertainment distribution.

iTunes has been widely successful since it first launched in 2001 and it has been the leader in digital music sales for years. However, it’s always lacked in the television and film arena. For television, it’s a no-brainer—competing with cable and broadcast networks who deliver instant programming 24/7 on hundreds of channels is no small feat. However in the film industry, we have been renting movies since 1985 when Blockbuster first opened and then in 1999, Netflix revolutionized this process by bringing movies to your door. Netflix revolutionized this process again by offering most of these same movies in live streaming.Netflix

Apple has the Apple TV and the iTunes store which allows for the “purchase” of movies and even tv shows (mostly those that have made it to DVD collections), but so far, they can’t touch Netflix. In fact, only recently has Apple began streaming their movies through the new Apple TV opting to cut out the ability to download and store movies on the device itself. This major change could very well be the stepping stone Apple needed in their quest to dominate your living room.

Pros and Cons

In Netflix’s corner:
Pros

  • Ability to have physical DVD and Blu-ray discs sent directly to your door
  • Live streaming of thousands of titles (and more coming each day)
  • Multi-device support (Blu-ray players, free phone apps, TVs, etc.)
  • Relatively cheap
  • New pricing plans for streaming service only (no in-home discs)

Cons

  • Not all movies are available via streaming
  • In-home disc count limited to 4 max at one time
  • TV shows limited to those only available on DVD

In Apple’s corner (Potentially):
Pros

  • Live streaming of thousands of titles
  • Possibly cheap? We’ll have to wait and see.
  • Multi-device support?

Cons

  • Might have to buy Apple TV to stream
  • No in-home discs

It’s hard to develop a pros and cons list with a product/service that doesn’t exist yet, but in terms of pure speculation, Netflix slightly leads the pack. The main reason for this is because they have a huge head start. Not only do they have hundreds of thousands of physical media for rental, but they are gaining massive traction with adding new streaming content. Netflix also has their software available on almost every connected device these days. Just about any Blu-ray player and TV comes with the ability to stream movies from your account. Knowing Apple, that alone might be the sole competitive difference. Apple is not known to be too kind when it comes to sharing software.

My two cents

Apple does have the advantage when it comes to customer base. They have millions of users already linked to iTunes via their credit cards, so adding an additional service charge to bring movies into the picture will likely not be a major hurdle for most consumers. Only time will tell of course and for me, it’s dependent on just how well Apple delivers that content. The deciding factor will come down to three things: 1. Title availability, 2. Network speed and 3. Where I’ll be able to watch this content.

Last updated: April 14, 2011