Netflix Set-top Box to Allow for Legal Movie Downloads Off Your Computer

Read Content Producer Jason Cangialosi’s preview of the Netflix Set-top Box.

Now, is it really fair that Blockbuster is having so many problems competing with Netflix? Technically speaking, their online DVD rental services cost about the same amount, movies are delivered in about the same amount of time, and Blockbuster actually rents games online in addition to their DVD’s which Netflix does not. Going down the line comparing Netflix vs. Blockbuster, it seems like Blockbuster should be doing extremely well.

Fair or not, Netflix has a serious advantage over Blockbuster. Their member base is at more than 3 million subscribers, and they’re about to one-up the competition in a fantastic way: movies delivered overnight directly to a box attached to your television.

VP of original programming, Eric Besner revealed the plan, noting that the business model is still being ironed out but some things are pretty sure. One of the “pretty sure” things is the way that the Netflix movie set-top box will work (reportedly – it’s not been released yet).

Members will continue to pay a flat fee for their subscription service in return for movies that are downloaded to their home television. The fee for current services starts at $5.99, and goes up depending on the plan you choose – the most premium plan allows you to take out an unlimited number of movies every single month.

Instead of waiting the 3-5 days on a DVD to come in the mail, though, Netflix users have even more ease. The movies in your queue (up to the number allowed by your subscription plan) are downloaded overnight to the Netflix box and all you have to do is choose which movie you want to watch from the list plugged right into your TV.

No more walking to the mailbox to pick up and return your DVDs – which is really cool in itself – you will now be able to plop right down on your couch and bask in all the movie goodness. When you’re done with a movie, you just add a new one to the online queue at the Netflix website like you do right now.

A box-top model isn’t a revolutionary concept, by any means, but it is certainly a big step towards changing the way that Americans rent, view, and buy their movies and other entertainment.

Recently Nielsen Analytics performed a panel survey that studied how the availability of ABC TV shows on iTunes affected the audience of shows on ABC. Larry Gerbrandt, senior VP and general manager of Nielsen Analytics, said that being able to download the shows has definitely not hurt ABC’s market share – in fact, they’re getting more viewers for their shows than ever before.

Disney senior VP and general manager of PayTV, Dan Cohen, said that they clocked 11 million streams (or views) of the four ABC shows it put online in May. One month, eleven million users. That’s pretty amazing for an experiment, and it goes towards boosting Netflix’s confidence in their new business idea.

Online Movie Rental Competition on the Horizon

Fantastic idea or not, though, Netflix is about to face some serious competition and will want to get this show on the road quickly. The company is currently estimating that the box movie service should be available by the end of the year – but following closely on their heels are Internet giants Amazon and YouTube.

Right now, there is something of an Internet Urban Legend going on about Amazon and what is being called the “Unbox”. Documents are quickly papering the digital walls indicating that Amazon is pretty close to unveiling Amazon Unbox Video and fiercely compete with YouTube, Grouper, Google Video and âÂ?¦ you guessed it, Netflix.

What will Unbox do?

Amazon customers will be able to purchase or rent videos, TV shows, news programs, sports programs and full films – and they’ll be able to download their purchase immediately to their computers.

Now, do remember the Internet Urban Legend thing I mentioned, because Amazon is remaining officially silent about the entire project � very silent. However, leaked documents (the fuel for our beautiful little urban legend) say that Amazon plans to charge about $2 for television shows and right under $11 for feature films.

Bear Stearns’ analyst Robert Peck has been quoted as saying that “It appears Amazon is close to this long-awaited service, which should boost margins if it gains traction and may ultimately replace any idea of a Netflix type business.”

Ohhhh boy so things are getting fun now! Not only is Blockbuster shuddering at the news that Netflix may be releasing a TV set top box that will download movies overnight, but Netflix themselves might be shuddering at the prospect of Amazon hopping on the legal movie downloads bandwagon.

One of the main selling points that Amazon (maybe!) offers with their Unbox over Netflix is that they only charge customers when they actually order a video. Netflix, on the other hand, continues to charge a flat subscription fee regardless of how quickly their customers can return movies via post âÂ?¦ so weeks can go by between getting a movie, watching it, and returning it. But the customer is still charged – with the Unbox, the customer wouldn’t be.

Since neither of these services have been released yet, speculation will continue to grow until something official is seen. With the fact that

Hollywood studios are growing more comfortable with download distribution (they’re getting great with the piracy controls), services like these are likely to become wildly popular. Downloads create massive savings for movie producers who don’t have to pay the fees for physical DVD goods and rental sites like Netflix don’t have to figure in the cost of shipping.

It looks like the world of entertainment is heating up, and I’m happily enjoying the show!

Read Content Producer Jason Cangialosi’s preview of the Netflix Set-top Box.

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