Netflix's Roku is Doomed to Fail 32 comments
-
Font Size:
-
Print
- TweetThis
Netflix (NFLX) and Roku Tuesday announced the $100 Netflix Roku. What's a Netflix Roku? It's a $100 box that will let you watch Netflix "Watch Now" movies on demand with yet another new box to clutter up your living room. CNET has a review here. They say they've had a box and have been testing it for two weeks. Interestingly, it looks like Mike K, who runs the top Netflix blog on the internet Hacking Netflix, hasn't had one for the past two weeks. Interesting how everyone is always saying that "Netflix gets blogging."
So why is this a bad move? Easy. Because nobody will buy the box. Well not nobody. They'll sell a couple of them I suppose, but this thing will never really get off the ground in a big way. We've seen this movie before, it was called Akimbo. Remember the Akimbo box that was going to revolutionize how we watched TV? So why will the Netflix Roku box fail? Simple.
1. People don't want more boxes in their living room, they want less. A satellite receiver or cable box, an XBox 360, a home theater sound system, a TiVo, an AppleTV, a DVD player, etc. etc. The last thing people want is one more ugly box cluttering up their living room.2. The content on the box is not very compelling. Do I want Netflix "Watch Now" in my living room? Sure. Would I pay $100 to buy a box that streams old episodes of Columbo or Xena Warrior Princess Season 1? No.
Can I get Juno on the Roku? No. Can I get Michael Clayton, or There Will Be Blood or American Gangster on the Roku? Nope.
Now some people will say that the hot new releases will be on this box, that it's only a matter of time, etc. but I think until we see that, the box is premature.
The funny thing is that there is already a better way to get Netflix "Watch Now" into your living room without having to pay $100 to buy yet another box. It's called the XBox 360. You can already (theoretically) stream Netflix's "Watch Now" service directly to your XBox 360 with your Media Center PC (that is up in your attic or over in your home office and connected via your home network -- not in your living room). I've been trying to get this to work a few weeks myself now but I've been hampered by the dreaded Netflix/Microsoft (MSFT) "good for the consumer" DRM issues.
So why is Netflix screwing around with Roku, when they could be working on and developing a better solution with the XBox 360? My guess is that it's simply shortsightedness. Roku is probably offering them something like $20 per box and Microsoft likely won't pay them anything. The problem is that $20 per box doesn't amount to a hill of beans if you don't sell any boxes.
The better solution is to better improve
the XBox 360 version of "Watch Now" and then let Microsoft's marketing
department push this new "one more reason why people ought to buy an
XBox 360" (that also is a DVD player, game player, extender
which gets all of your TV, photos and music to your living room, and now also plays Netflix content -- think less boxes, not more).
Of course if Netflix pushes this idea then nobody will buy the $100 (and their $20 cut) Roku box.
Of course another way to spin this story is simply that the Roku is the best thing since sliced bread and is the "$100 AppleTV Killer" like they did over at CNET's News "Blog", which got to break yet another story. Good thing Netflix gets blogging!
Related Articles
|
Find People on SA
-
The Seeking Alpha 100
See allThe top 100 stock
market authors
selected for publication
Seeking Alpha 100 » -
Fastest Climbers
Authors with the largest
increase in followers
in the last 7 days-
1
David Fry
-
2
Bill Gross
-
3
Peter Schiff
-
4
TraderMark
-
5
Serge Hagopian
Fastest Climbers » -
1
-
Top Commenters
Top commenters,See all
as ranked by their peers
Top Commenters » -
Top Instabloggers
The 100 most activeSee all
Instabloggers.
Top Instabloggers » -
Top StockTalkers
TopSee all
StockTalkers.
Top StockTalkers »
This article has 32 comments:
Good call on Google btw... better come up with another pseudonym "Thomas Hawk"
BTW, you didn't mention the price of XBox while complaining about one-shot $100 for all you can watch movies.
Smaller monitors are a different story. They would look fine, perhaps great, on a 27" CRT.
The biggest problem here is the selection. I've found very few popular releases in 'watch now.' It seems to be mostly older shows, documentaries, and B-movies.
For me, $100 is cheap enough.
And your belief that customers will pass on Roku when they can simply (theoretically?) stream PC content to their Xbox 360 game console just as soon as they figure out how to hack the Netflix/Microsoft DRM...what the hell was that?? How much money have you got invested in the belief that ANYONE is going to do that??
And your reasoning about "people not wanting more boxes in their living room", stumbles on your strange definition of "people". Maybe the kind of advice your making here actually earns you enough to own a satelitte dish or digital cable (at least you didn't say both!), an Xbox 360, full home theater, TiVo, AppleTV and a stereo system along have a "Media Center PC" doing nothing in an attic (or was it in your home office? I forget...). Unfortunately most "people" don't have the problem of too many $1000.00 + toys cluttering up their living rooms.
I still agree with some sentiments in the article, but c'mon, at least do some basic research before you write.
Also, the idea of them hitching their business to a Microsoft product would be monumentally stupid as MS would have no incentive to honor the relationship. What does Netflix really offer MS in that deal? Netflix doesn't own the content and MS could at some point in the future, license that content directly and cut Netflix out without impacting the MS customer base at all. Once that deal is done, they'd have a built in hook to the customer base Netflix would have handed them. Not smart.
Also, you can hook up your PC/Laptop to the TV directly without XBox to view Watch Instantly content. You just have to have the correct cables and some computer savvy. But for those that don't have either will buy this box. It will get traction. Plus, NFLX margins aren't impacted by this box, so all the revenue will go straight to the bottom line.
So, while future hardware releases will undermine this product, from a NFLX point of view, it doesn't matter since the products that will undermine this one will replace the lost revenue and then some!
Inside word from Netflix was that the initial run of Roku Netflix players sold out the initial production. It seems that they are in fact finding a sweet spot with a device that can stream content all for $99 bucks.
You mention making it work with xbox? Thomas, I have a degree in computer science, and an xbox... When I get home from work the last thing I want to do is troubleshoot my living room. I'll take a standalone device any day that does what it's supposed to do well. And the Roku devices appears to be that device for streaming movies. By the way my box shows up on Wednesday according to Fedex.
Enjoy your blogging.
Wonder what Reed Hastings and his team are thinking! They need to try the streaming media quality at EdgeStream who are delivering videos streams in HD today.
First, who has "A satellite receiver or cable box, an XBox 360, a home theater sound system, a TiVo, an AppleTV, a DVD player, etc. etc. " anymore? The first two (satellite receiver w/ built hard drive and Xbox 360) make the TiVo, Apple TV and DVD player redundant. And, really, Xbox? Blu-ray won, get a PS3!
Second, this is not a solution for the high-end customer, but for the ease-of-use customer. How many parents of toddlers would galdly pay $100 to have an endless supply of kids programming at their fingertips, rather than have to hear the same old Barney dvd over and over and over?
Finally, the limited content available now is only indicative of the infancy of the technology. The major distribution companies will realize soon enough that digital is the future of content delivery, and while they do NFLX will be improving their technology so that eventually you'll be watching streaming HD new releases for $14.99/month.
what part of FREE content don't you understand ?
did you notice the HDMI input at the end of the device ?
do you know this is one of many devices with netflix streaming yet to come ?
what a uninformed whinny b*tch you are.
"1. People don't want more boxes in their living room, they want less"
That's your top argument against it, huh?
How do you explain the popularity of the Xbox, playstations, Wii, DVD palyers, etc? I really think people don't care.
I predict that Roku will be very popular, especially with current Netflix subscribers. It is just so simple to use, and there is something awesome about browsing for "free" movies. It has that "x-factor" that a hit product should have.
news.cnet.com/8301-107...
If you want to argue having a game system to do it all, its FAR better to get a PS3, Bluray makes it a no-brainer. PS3 can also play MP3, WMA, DivX and Xvid, and every PS3 has WiFi and a built in user-upgradeable SATA hard drive Like the 360, it plays files off any networked PC. Unlike the 360, it has a real HD movie player.
I have a Roku. I also have a Toshiba A-35 HD-DVD, PS3, Dish Network HD PVR. They are all connected to a Yamaha 863 7.2 Dolby HD receiver and 50" Samsung plasma TV. I love my Roku, I plan to buy another one for the 42" Panasonic plasma in the rec room.
Netflix has a winner on their hands.
Stop hating and try the product your self!
With an LG TV coming out with the equivalent of the Roku embedded, and the possibly of an arrangement with Microsoft to have the Watch It Now stream through the 360, it's clear the Roku isn't Netflix's final solution to beating Apple and Amazon at digital delivery.
That being said, it doesn't hurt to have Pioneers help it figure out the bugs, get a wider base of consumer input on their offerings and generate buzz about their business model. Netflix already has good customer service, a growing subscription #, slowing churn (% customers leaving). Let us not forget that Apple's service is not subscription based, and Amazon is brand new at this.
Netflix will possibly continue to form partnerships with major electronics manufacturers and later possibly distribution companies as the overwhelmingly positive reviews of this digital approach spread from where it is now (tech blogs to MM to early adopters).
The lack of HD content should be resolved, but whether or not new movies will be added is paramount to penetrating the younger crowds. Most mature audiences don't NEED to see the latest release in order to justify paying $5-$20 for a service that delivers this much content. I can't see why the major movie studios would agree to a subscription model for newer movies when movie downloading isn't ripping apart their dvd sales #s. UNLESS:
Apple's new model gained acceptance because mp3s were so easy to download. But free MP3s had been around since the early 90s (I was one of those kids in AOL chat rooms and IRC rooms downloading off of bots). What changed was Napster and bandwith. Bandwith might grow with the purchase of the C-Block, with reduced rates, 3g networks, but also might shrink with the fight against net neutrality and price discrimination. For anyone with 45 minutes on their hands and semblance of internet savvy, she can learn to download torrents of HD movies, rip them to a dvd and watch them on her tv. Were this to spread or get more popular via a Napster-clone-cum-Medi... combo....well you get the point.
Holding the stock down now is primarily consumer spending, which will shrink with increased energy prices, increased unemployment, decreased lending, falling house prices. Netflix growth rates will stagnate and the stock wont generate much more buzz until a new device comes out, prolly around xmas. So I can't necessarily say, go ahead and Buy It Now. It's a long term hold for me because I'm optimistic about their opportunities.
Well old movies may be something that I enjoy watching. Already had a run of TORA TORA TORA, DOCTOR DOLITTLE, JUMANJI, BRIDGE ON RIVE KWAI and I have a set of them waiting to be watched. Some of these titles you may not even find at your local blockbuster.
The only problem with this device is that you need to add the movies to your instant queue from a computer and the roku device does not have that feature. I am just waiting for somebody to make this 99 Dollar device to boot linux and get me the best of linux world to this device.
It is definitely something that is useful that I have the option to select a movie that I want to watch depending on my mood. A war movie at 01:00 AM without commercials.... Well the ROKU serves the purpose
I just watched 3 entire seasons of "The Office" for free on my laptop. I've been a Netflix member for a while and was already happy with it. The download service is icing on the cake.
And, forget the X-Box and all that nonsense. If you have a laptop and a decent TV, then you can go directly to the VGA connector on the back, and the TV will be a monitor. The Netflix streaming isn't HD, but is still pretty good (fast internet connection helps) and can come across with a 16:9 aspect ratio. The Roku box is for people who don't want to hook their PC directly to their TV. It's a relatively inexpensive and non-recurring cost to get a full time internet connection to the TV. What's wrong with that?
eastbay.bizjournals.co...
Netflix set-top boxes sold out
In less than three weeks, Netflix Inc.'s new set-top boxes have been cleared out, and the Los Gatos company said it is pressing its supplier to speed up production.
The set-top system, made by Saratoga-based Roku Inc. and introduced on May 20, allows Netflix customers to order movies online and watch them on TV using Wi-Fi technology.
Netflix (NASDAQ: NFLX) chief executive Reed Hastings declined to say how many of the $100 devices have been sold but did say the company's goal is to make its service "ubiquitous" on a wide selection of devices by 2010.
Netflix, which distributes movies to subscribers through the U.S. mail, is working with three other consumer electronics manufacturers to build its software into products such as DVD players and game consoles, Hastings said.
Privately held Roku said its backlog will take six to eight weeks to clear up as more units arrive from Asia.
Analysts say one prospective Netflix partner is believed to be Redmond, Wash.-based Microsoft Corp. (NASDAQ: MSFT), which would adapt the Xbox game console to show streaming movies. Hastings, a Microsoft director, said other partnerships will be announced later this year.
Silicon Valley / San Jose Business Journal
So I'm buying one as it's cheaper than a spare laptop and it has a remote!There goes yout theory. ;-)
Not only has the box been selling like hotcakes, per a pervious poster's link to CNET, but it was featured in GQ as one the best products out there right now.
Oh yeah, then there's that amazon deal that just happened. What, some 40k videos I can buy instantly on my TV, including movies that just came out? I don't think Comcast's on demand even has this; they're not allowed to.
This box just arrived in my apartment. I had it set up and streaming in less than 10 minutes.
I ditched cable when my roommate moved out and my girlfriend moved in. I've got a Mini hooked up to the 27" that gives us our Hulu fix, a PS3 for Blu Ray/DVD, and now this. We are _SET_.
I'm convinced this is the future. Just a single-purpose dumb box that streams video right off the tubes. Its a beautiful site to behold.
Granted, you can't watch brand new releases but that is something that Netflix is working on. Also the ROKU is scalable and can offer more features than just Netflix. I won't be surprised to see cable content available in an on demand format. On-Demand is where the future is headed and Roku is making a great start.
How long will we be held ransom with cable TV? This box is a great start towards ala cart viewing. Thomas Hawk is going to eat his hat.