Networks diss iTunes rentals, embrace Netflix instant streaming | Hacker News Reader

Networks diss iTunes rentals, embrace Netflix instant streaming

arstechnica.com

14 pointsevo_916 comments

The biggest issue I see in all honesty, is that as of now, itunes fails completely in terms of user experience when you try to find and buy anything.

itunes is rife with things that make it HARD to buy anything.

The user flow goes something like:

-Wait for itunes to load

-type in your password

-tell it you don't want to turn on feature x or y

-click itunes store

-type something in the search box

-wait while the store freezes for 5-10 seconds

-click on what you wanted

-click on the season you wanted

-find the episode, realize you don't want the HD version

-hunt for the small link to the SD version because itunes decieds for you that you must want to pay more and get the HD version

-re-find the SD version, click 'buy'

-re login in because for some reason it asks you twice

-click the 'yes I really want to buy this popup'

-get hit with a new terms of service that you must agree to

-realize that your download hasn't actually resumed now that you've agreed to the TOS

-re-find the episode and click buy once again

-re-click the 'yes I want to buy this' button

-hunt up the 'downloads' link on the left

-find the item that you want to watch, get hit with another popup talking about how downloaded items will show up here or there when they are done downloading.

-Double click the item you want to see

-hunt for the hidden-till-you-mouse-over-it button to expand the show to full screen

Don't get me wrong I love Apple, I sing praises for them all the time, but I know they can do way better than this.

Compare this to the zune market on xbox:

-Load the market -search -click buy -click play

Don't forget the times when it just puts up some mysterious error that requires you to re-enter the store and try again.

The whole thing has become the poster child for feature-creep. Have you ever tried just browsing the App Store? It's nearly impossible to see anything other than the few condensed lists it gives you -- there's no true browsing that I've ever been able to find.

The interesting thing to me about this is that the media companies seem happier to take a flat fee than per-viewing fees for episodes, which seems counter to the general strategy of making people pay every time they watch something. I can think of for this are:

1. Their models show that they get more money from the flat fees via Netflix than from per-rental fees. 2. They prefer the steadier payments that flat-fee library access provides to more 3. They think that $0.99 is a bad price from a customer psychology standpoint.

This is obviously not an exhaustive list, but I think (3) is an interesting point. If $.99 is now the de facto "cheap impulse buy" price point, is it possible that television execs don't want people thinking about TV that way? When watching a TV show can be compared with a fun little iPhone game or a single song, does it stop being a compelling purchase?

I think they'd rather that people feel they need a recurring subscription to television, or pay much more per episode to get a "permanent" archive of it. Both mechanisms encourage people to overindulge in and overvalue television, while individual payments for rented shows do not.

They may also have learned from the ever-ongoing micropayment failure. When prices start getting down to $.99, mental transaction costs start to matter more than the dollar costs.

I'm currently on the $8.99 plan for Netflix and probably wouldn't switch to the all-streaming plan even if they offered it. At my usage rate, .99/movie would be cheaper for me. But I would still rather hand over $8.99 a month and not think about the dollar per streaming movie than to individually watch every dollar going out.

This is twice as true if that dollar is for some BS "limited time rental", now I'm watching every dollar go out and I'm watching the clock. I am happy to pay a bit more to avoid this mental stress.

I am curious about why Netflix has succeeded so well with regard to streaming movies and so much TV content. There are competitors, Hulu and YouTube, but Netflix seems to be winning. I think there are three possibilities:

(1) They got lucky. Netflix made the good deals early on. After a few of these, the deals simply snow ball.

(2) Netflix has a captive audience created through their DVD rental service. Netflix gives us DRM'ed content we can view online and we applaud it because we already love getting those red envelopes in our mailbox.

(3) Their distribution network is superior and is the best to deliver all this content.

To me (2) seems the most likely. Perhaps is a combination of all 3.

I think you hit it with #2.

Netflix created a huge following of normal, non-techie folks with their brilliant distribution 'hack' (aka using regular mail); when people started to see Netflix on their xboxes and ps3's, they understood what they were about already and it was easier for them to build up a following on the digital front.

Imagine if they'd tried to do that first - aka bypassing the whole mail/red envelop thing - people wouldn't have a clue what they were about or why it was awesome.

I always wondered why they were called 'Netflix' when you only got DVDs in the mail.

Actually no, I think it was fairly obvious they were intending to stream stuff online from the start and the mail thing was just the setup.

As a Netflix subscriber, your (3) is probably the closest. My wife and I signed up for Netflix because we didn't want to pay for cable. Netflix's streaming service was the first to offer an easy path to get content to the TV. Roku's player is why we keep paying for Netflix.

I think (2) is dominant. Netflix has outstanding customer service, which made my wife and me incredibly loyal and happy customers. DVD scratched? They'll generally instantly mail you a replacement and tell you to just mail the scratched one back when you get a chance. Something got lost in the mail? No problem, they bite the cost, not you.

We use their streaming service more than physical DVDs these days, but we definitely remember how we were treated as early customers.

Seems pretty straightforward to me: Hulu has a much smaller catalog than Netflix, and is watchable on a lot less hardware. The only content they soundly trounce Netflix in is "current" TV shows, but how many people a) prefer watching TV on their computer over paying for cable TV + a DVR, AND b) prefer paying Hulu for that privilege over just torrenting everything?

I don't see how Netflix is competing with YouTube at all.

They also have pretty stringent anti-piracy technology through Silverlight. Much harder to grab content compared to Hulu or Youtube.

iTunes has a captive audience too.

The main difference is the size of the catalog (netflix wins), and the pricing structure. People seem to like Netflix's all-you-can-eat for a flat fee structure.

The success of the iTunes music store is huge impediment for Apple in video, tv, and books. Content owners look at the way Apple dominates the music retail business, and resolve to do anything rather than let another Apple service achieve near-monopoly status. The problem is that the results have been sucky and patchwork, with piracy the defacto winner.

I think the part that Ars isn't mentioning is that Jeff "devalues our content" Zucker announced his departure today, so it's possible he may no longer represent his company's overall position on the topic. To me, the move seems to reflect a disrespect of Zucker's leadership as much as it does a diss on Apple.

Also, it's not like any of this hurts Apple anyway. They're a hardware business first and I have to imagine their margins won't be hurt by ceding a breakeven TV business to Netflix or Hulu.

Other factors at play: Netflix often sets up lump-sum deals with content owners instead of per-item deals. And those deals as a whole are way more attractive than $0.99 rentals for shows which may not even be as popular in the long-term:

http://shortformblog.com/tech/netflix-slowly-but-surely-beco...

Fact of the matter is, Netflix writes big checks. Which might make them more attractive to old-school execs than Apple's model, which is a lot less like what they're used to than Netflix is.

I always wonder were amazon video on demand is in these discussions. I find that service much more comfortable to use and you can redownload your videos or even watch them in the browser. I wonder why this is not getting more attention

I'm curious as to why $.99 is 'devaluing' the rental. Renting a DVD is $5 (or $5-15 a month), and usually has 3-5 episodes on it. It's a little cheaper, but not by much at all..

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