Wednesday, May 28, 2008

Apple vs. Netflix: How do they stack up?

May 20, 2008
Apple vs. Netflix: How do they stack up?

The big gadget news Tuesday morning was Netflix’s entry into the set-top box market, with the inevitable comparisons to Apple TV.

So how do the two devices stack up? Technically, it’s an apples and oranges comparison. One box is a special purpose computer with a small (40 GB) or big (160 GB) hard drive built-in. The other is designed only to stream video to a TV.

But to consumers looking to watch their favorite movies and TV shows on demand, technical differences will mean less than the cost of the device, the cost of the service, and whether the titles they want to see are available for download.

In terms of content, Netflix (NFLX) seems at first glance to have a big edge, with 10% of its 100,000-title library available for download. Unfortunately, that 10% is mostly older movies (5 years or more) and TV shows, with some Indy flix thrown in.

Apple (AAPL), by contrast, has a much shorter list — in early May it finally delivered the 1,000 movies Steve Jobs promised back in January. But thanks to its latest round of deal-making, many of those titles are new releases, available the same day they come out on DVD.

Apple also has an edge in terms of quality: 720p versus 480i; Dolby versus mere stereo. Also, some of the Netflix titles that should be wide screen aren’t properly formatted.

But the price is right on Netflix. The player, made by Roku, is less than half the price of the entry-level Apple TV (and a lot less than the $329 high-end model). And if you’re already a Netflix member paying monthly dues, you get unlimited downloads for what feels very much like free.

Given the new competition, it will be interesting to see whether Apple rethinks its current pricing scheme: $2.99 to $3.99 to rent, $9.99 to $14.99 to own.

Filed under Apple, Apple TV, Netflix

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