Movie rental giant Netflix (NFLX) and Korean electronics manufacturer LG have teamed up to make devices that will bring streaming Internet movies from Netflix into the living room. Some of our first questions:
1) What will the devices look like? Most reports refer to the initial device as a set-top box, which could also include a HD-DVD and Blu-Ray disc drive. But since all you need to play Web video is an Internet connection (wireless or wired) and a screen, why wouldn’t LG also build it directly into its high-end HDTVs, too? The WSJ says a video game console partner is also lined up. Which will it be?
2) How much will they cost? LG’s current edition of that device — without Netflix support — is $800. With Apple’s movie rentals around the corner and a $300 Apple TV, that sum won’t fly. If the device will play hi-def DVDs, LG might be able to get away with a $400 price tag. But if Netflix wants to stir things up, it should offer two options: one with the hi-def, dual-disc drive for $300, and one without it for $150.
3) Can I save movies for later — or move them to another device? People are used to storing stuff on DVRs and taking it to go on their iPods. While Netflix movie rentals will be free, will they also be portable? (Regardless, they won’t work on Apple’s iPods or Macs, because of Microsoft’s proprietary DRM.)
4) How long until HD? Cable operators already offer hi-def movie rentals on demand, which means they have a leg up on any streaming rental service with inferior quality videos. “The Netflix streams will not initially be in high definition,” the Times says, but offers no hints at a road map.
5) How will Apple, Amazon, etc., respond? Steve Jobs has a few days before his Macworld keynote next Tuesday to figure out how to better frame his movie-rental announcement. Will Apple rentals be cheaper? Longer lasting? Higher quality? Will he slice prices and make the entry-level Apple TV $200? More here in our initial “winners and losers” analysis.
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