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Apple And Netflix In Download Movie Race

NetflixThrough different business models, both Apple and Netflix are racing to provide downloadable movies, Variety reported.

Apple, though it's iTunes Music Store, has conquered the digital music business and has taken the lead with downloadable TV shows. Now, it's looking to feature films.

Seemingly an easy transition due to the increasing popularity of the site, the main sticking point between Apple and the major movie studios right now is simply the price.

Initially, Apple proposed selling all movies at a flat price of $9.99 per film. However, the studios flatly rejected the offer because they would lose the ability to set higher prices for more popular films and they would risk straining relationships with major retail chains such as Wal-Mart or Best Buy.

Meanwhile, movie rental powerhouse Netflix is planning to introduce a proprietary set-top box with an Internet connection that can download movies overnight.

Netflix VP of original programming Eric Besner said the business model is still being worked out, but the download service likely would be offered in return for the subscription fee members pay for conventional DVD rentals. He also said the new service could launch as early as this year.

Users would add movies they want to watch to their rental queue online (as they do now) and those movies would then be downloaded to the boxes overnight rather than shipped through the mail.

There was no word on what fees would be associated with the Netflix rental set-top box or how many movies would make up a rental "package."

The main difference between these two models seems to be rental versus purchase. As with most folks, I rent far more movies than I purchase. I also don't have the digital storage space to download and save more than a handful of movies at a time - not to mention the fact that the iTunes digital encoding is proprietary and would probably not work in a regular DVD player if burned to a disk.

Call me old-fashioned, but I still enjoy browsing my own personal DVD shelf to see whatever catches my fancy on a given night. Browsing a folder on my desktop is much less satisfying. While I'm intrigued by the Netflix set-top box because it will deliver my rentals to me even faster without pesky shipping envelopes, I'm less inclined to purchase many feature films online. With that said, though, I'm sure to eat my words later. iTunes is just so easy to use - and oh so addictive. -- Shannon Nolley

Posted by Shannon on June 19, 2006 8:24 PM
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