By Greg Mills
In preparing this article, I have come to view Apple TV/Netflix as not a replacement for Dish but as a cheap "pay for view" movie channel option to replace a satellite channel I am currently subscribed to.
I am going to drop one movie channel (US$12 a month) to pay for a subscription to NetFlix ($8.99 + $2.00 for HD). That revelation allowed me to make a personal decision to go ahead and buy the Apple TV device and subscribe to NetFlix. Here is my take on this.
As was anticipate by many in the Apple fan base, Steve Jobs recently announced a new and improved version of Apple TV last week. The new device is much smaller and more powerful than the previous version, but still does not support full 1080HD. It steams up to 720p video from either Wi-Fi or ethernet, so connecting it to the web is easy.
You can stream content from a computer through Wi-Fi to the AppleTV box or directly connect the Apple TV box to the web, through Ethernet. You can get content from Apple, NetFlix or other internet sources like YouTube, which plays the content on your HDTV though a HDMI connection on the back of the Apple TV box. So far, so good.
What I don't like about the current version of Apple TV is most of what I didn't like from earlier versions of the same device. It does not support full 1080HD and isn't a replacement for my Dish DVR. In my mind Apple TV ought to be a DVR -- and it just isn't.
At the end of the day, consumers will find the best deal and the numbers don't add up for me to drop Dish entirely and go to Apple TV as a full replacement for Dish, no matter how big a fan I am of Apple. The notion of having to pay 99 cents for free TV episodes is nuts. I can use my Dish DVR (which, by the way is awesome) to save TV shows for later viewing at no additional cost. Apple is not competing with that content value model compared to cable or satellite TV. The notion that people aren't going to freely spend 99 cents a pop to view free content, which is easily available from other sources, at a low monthly flat rate, is a concept billionaires can't quite relate to.
I pay Dish around $65 per month to watch any of 200 channels anytime I want for as long as I want, without an extra charge, unless I download a recent pay for view move. For that money I also get HBO and the Stars movie channels. If we figure only four weeks per month for easy math, that would get me a $16.25 a week budget if we cut Dish loose and went with Apple TV. At $3.99 to rent a movie which I can only see during the 24 hours I begin to watch it, that gives me four movies a week with 25 cents left of my budget. At 99 cents per TV show we could watch two one-hour programs per night, if they are carried by iTunes -- and all of the networks aren't yet on board. However, I figure they will be Jobbed into going along with Apple sometime soon.
TV shows will not all be on NetFlix until DVDs of those TV shows are available. This is normally done after the end of a season. Consider that NetFlix is sort of like an electronic BlockBuster where you can get content only if it is already out a DVD. There is a reason BlockBuster is going broke: their business model of consumers going out and renting and then returning a DVD disk or VHS tape is being replaced by downloading content over broadband. BlockBuster was way too slow to change and unable to make the nimble transformation reflect the newer business model. You can't get out of a five-year lease on a storefront converted into a BlockBuster outlet just because your business model has gone out of style. Try telling a landlord that to get out of your lease.
I decided to buy an Apple TV device and get over the Netflix pop-under anger I harbor due to their sneaky web advertising that defeats my Safari pop-up blocker and subscribe to Netflix. I don't think Netflix or even Apple's new server farm will replace the basic cable/satellite TV offerings that are absolutely unlimited and provide so many TV channels. But, they will offer me a good price on a pay for view option.
What I finally figured out, after talking with both Dish and Netflix, is that one might consider Netflix downloaded over Apple TV as a better movie channel, where everything you download is like pay for view but "all you can eat" at a low fixed monthly price. I invested in an AppleTV device and will drop Starz to pay for my monthly NetFlix subscription and see how it plays out. I will admit sometimes there is nothing good we have not already seen on the cable movie channels, so we can augment that with the new AppleTV/NetFlix channel.
Ok Steve, you win. What else do you have up your sleeve? I will bet my new Apple TV Apple buys or puts NetFlix out of business by this date next year. Any takers? The NetFlix market cap is about six billion dollars so Apple could snap them up and, in one stroke, make the new server farm profitable. On the other hand, Apple might just out flex NetFlix and run them out of business.
(Greg Mills, is a Faux Artist in Kansas City. Formerly a new product R&D man for the paint sundry market, he holds 11 US patents. He's working on a solar energy startup, www.CottageIndustrySolar.com using a patent pending process of turning waste dual pane glass into thermal solar panels used to heat water. Greg writes for intellectual web sites and Mac related issues. See Greg's art web site at www.gregmills.info ; His email is firstname.lastname@example.org )