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Can Netflix, Apple and Vudu Compete with Cable Offerings?

We covered the launch of the Netflix Player recently and were not particularly excited about the offering, and those that posted their response after the piece were less than excited as well. AppleTV which came from a company that appeared to be unable to find a flop, turned out to be one, and I’ve been using the Vudu product which works at least as well as the AppleTV does but I wonder if I would abandon my Netflix subscription for it.

At the same time I’ve done a deep dive with Microsoft’s IPTV platform which is sold to DSL providers who then subsidize it and resell it to consumers as part of their competitive response to similar offerings from Cable providers. IPTV does more than any of these boxes currently do, costs less, and typically comes with a set of services that covers setting and repairing the offering for as long as you subscribe to the related service.

This got me wondering. Regardless of the technology provider, can any standalone product effectively compete with a Cable or DSL based solution?

Netflix Player vs. Vudu vs. Apple TV vs. Xbox

Before we start down the competitive path, lets first talk about the key offerings. Vudu and Apple TV are very similar in terms of price and offering. The Vudu library appears larger, and because they aren’t at war with NBC/Universal (Apple may be fixing this), and given both are reasonably easy to use, I’d favor Vudu at the moment. This is because I think the size of the available library is a key competitive differentiator. I find this interesting because typically I whine about the fact that no one seems to get the end-to-end solution the way that Apple does and these Vudu guys seemed to get it right out of the box.

What makes the Netflix Player different than either Vudu or Apple TV is that it is more focused on keeping the cost of the set top box down and it is vastly easier to get someone to pay $100 than over $300. But to get there they had to eliminate the storage capacity the other products have and that means at best you get DVD quality while the others at least have some HD quality shows. I haven’t seen the user interface for this product yet but Roku typically does well here. But with no upscaling(allowing a lower resolution movie to look like HD) and no ability to play HD content, cheap doesn’t do it for me and the goal would be to both hit a sub-$200 price point and provide HD content.

Now the Xbox (and eventually the PS3) does provide movie content and I’ve watched a number of movies on it. However, unlike the other players which come close to providing near instant movie viewing the Xbox typically requires a long time to download the movie before it plays it. I actually have the highest speed Comcast service which can burst up to 15x the speed of my old DSL service and even so, the last HD movie I watched took nearly an hour to buffer and, even then, stalled at the end because the buffer ran out. However, in this case, the movie player comes for free as part of the game system; the only problem is that, if I had kids, they wouldn’t have their Xbox in my living room and my wife prefers I game someplace else.

If I were to choose one of these for Movies myself right now I’d take the Vudu box because it provides the best experience but what if I could get IPTV or some other similar service?

The Cable DSL Advantage

The advantage with IPTV and similar solutions is they are not only set up by the providers, services by these providers, and subsidized, but they are multi-room solutions. The only way to move any of the stand alone solutions between rooms is to physically move the player. Now granted with HDMI there is a single cable (for audio and video) and a power cable and you could try splicing it off to your various TV sets using a switcher, but I’m simply not going to do that. By the way, I’m not doing it for Blu-Ray either which shares that problem.

Now why would I want to watch a movie someplace else? Well because there are times we like to watch movies in bed and there are lots of movies I enjoy (typically with big explosions, aliens, and lots of gratuitous violence) my wife doesn’t want to see in our living room.

If we had kids that liked to watch movies (particularly Disney films) over and over and over again I’d really appreciate an offering that allows them to watch the movie in their room but I’m not going to buy the same movie multiple times just so it can be watched in multiple rooms even though I know that the DVD approach isn’t great either (Kids, particularly young ones, destroy DVDs and you do have to buy several copies). As a side note, I wonder how many parents use Netflix as a way to replace the DVD they bought their kids destroyed.

Finally, these DSL and Cable solutions work with TV programs I’m already paying for and allow me to time-shift or save them. Though, even here, few of these allow me to move content I’ve either purchased or time-shifted around the house due to concerns regarding “rebroadcast” rights. I sometimes thing folks work to hard at making this all more difficult than it needs to be.

Waiting for Perfection

So I clearly think that the Cable/DSL solution is better so, you might ask, why don’t I have it? This is because what is offered in my area truly sucks. I have a choice of AT&T and Comcast. AT&T isn’t providing the bandwidth yet to allow this to work and the TiVo based Comcast boxes aren’t available in my area (and the non-TiVo Comcast products are horrid). So for now I’m using a combination of Vudu, TiVo, and Netflix to satisfy my movie needs and confuse my wife. 

I’m secretly hoping that something like Fuze Media, which just announced they can distribute Blu-Ray playback along with everything the Cable/DSL guys already do, can become more affordable and common. Until then I’m still waiting for perfection.

Rob Enderle
Former Digital Trends Contributor
Rob is President and Principal Analyst of the Enderle Group, a forward-looking emerging technology advisory firm. Before…
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