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First of all, I think it’s great that more movie studios are getting on board and understanding that delivering media over the internet is where things are going in the future. I also think it’s great that customers have a choice on where they want to get their media.
What I completely disagree with is that the Netflix(NFLX) business model no longer works. In the video they say that since Apple(AAPL) is offering so many downloadable movies to rent, why would you need a netflix subscription. Since you can rent a movie for 30 days for $3 you don’t need a subscription? That’s such an arrogant stance to take on this whole thing. Let’s do some math.
Using Apple’s iTunes to rent movies, I can rent 6 movies for a month for $18 (the equivalent that I pay for a Netflix subscription). Now with Netflix, there is no limit to how many movies I can rent in a given month, but I can only have 3 out at a time. Well, I can watch about 9 movies in a week. If I did that for 4 weeks that’s 36 movies I get for $18 vs. 6 from iTunes. Still think iTunes is the better deal because occasionally you don’t return some movies for a few days, maybe you have 3 movies for 2 weeks. I still get 6 movies for the same price. On top of that I can watch up to 18 hours of content online from Netflix included in my subscription.
What I see here is a lack of investigation and understanding of consumer wants and needs.
I use iTunes for music, podcasts and some video content, but I have yet to purchase a movie because frankly, they just don’t play on my desktop. Part of the reason is Apple doesn’t really care about how their products run on anything other than Apple computers. iTunes videos are choppy on my system and if you try to run them full screen, the whole app freezes. Even after upgrading video cards and memory and a new processor this is still the case. Their software just isn’t very good on a windows platform.
Netflix on the other hand, runs perfectly. I’ve never had an online Netflix movie crash or lock up. So in my opinion, this battle isn’t decided yet. Apple may have some of the big studios on board but I’m going to stick with what works for me.
No position in Netflix, but I do have some Apple shares.
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