My take on what's interesting and what's irritating.

Monday, September 12, 2005

Netflix On-Demand Idea

In my previous post, I talked about an idea for a "Netflix On Demand" service. After giving it a bit more thought, I think it could work in a couple of different ways.

  1. A download service owned and maintained by Netflix --OR--
  2. A torrent based service where everyone's downloaded queue is the content for the torrents.

Having Netflix own the distribution channel has the advantages of having them control the content and thus probably allaying the fears of the entertainment industry. Having a torrent service would significantly reduce the bandwidth requirements of Netflix.

Netflix and TiVo announced about a year ago a partnership that was pretty short on details. The implied assumption was that you could download movies from Netflix to watch on your TiVo. While I think this is a good start, I'd rather use Microsoft's Windows Media Center since it more easily supports external storage (try taking your current Series2 TiVo to 1TB!) and could more easily accomodate my download the queue idea.

Windows Media Center has a limited capability with the Movielink and Cinemanow sites integrated into the 10' UI interface. However, Movielink has several limitations I'd like to see Netflix overcome:

  1. Watching a movie more than once. Movielink has the annoying requirement that once you *start* a movie you have 24 hours to finish watching it. I'd like to see a model where, just like the current Netflix, you can watch any move you've got 'rented' as many times and keep it as long as you want.
  2. Only one movie at a time. I want the ability to have multiple rented movies that I can view. If I've got the 3-at-a-time plan, I want the ability to have 3 downloaded movies that I can watch at any time. When I want to watch another movie in my queue (that's already been downloaded) I would have to 'return' (delete) a currently rented to unlock the next movie.
  3. Waiting to watch while a movie downloads. Although both Movielink and Cinemanow offer buffering to start watching movies as quickly as 30 seconds after purchase, the reality is network hiccups can often disrupt the viewing experience. With Netflix, after the first movie is downloaded, the others would immediatly begin downloading. Every movie after the first one would be immediately viewable out of the queue.
  4. Ability to buy movies. Netflix customers can buy 'previously viewed movies'. Instead of buying used copies, I'd like the ability to burn a copy of one of the rented DVD for the same purchase price as the other Netflix customers. I might even buy the DVD case and artwork for a small fee.
  5. Continue the x at a time, queue based system. Continue to offer the current model but apply it to the download model. Having a pre-downloaded queue is the key to the instant gratification and high customer satisfaction.

Advantages for Netflix:

  • Same rental revenue but no rental physical media to deal with.
  • Begin phasing out regional warehouses in lieu of a centralized datacenter as adoption rates go up.
  • If content can be delivered for less than the cost of postage, profits go up.
  • Minimal bandwidth costs in the torrent model.
  • Ability to sell the downloaded movies as an incremental revenue stream.
  • Highly satisfied customers through the instant gratification of watching the movies in their queue.

Disadvantages for Netflix:

  • Cost of bandwidth for distributing 30,000 titles to millions of customers. Apple does it on a smaller scale with the iTMS but this is obviously a LOT more data. Still, with some sort of download management system, movies farther down the queue could literally trickle in over weeks. The bandwidth problem is significantly mitigated by the torrent method.
  • Potential for customers to 'rent' and thus turnover significantly more movies per month. If Netflix pays the studios fees when movies are rented, their costs could go up significantly.
  • Waiting around on TiVo while Microsoft and Movielink figure it out in spite of Netflix.

If I were a development manager at Netflix, I'd kick this project off by doing something like this:

  1. Cost-Benefit Analysis of the Torrent method vs the distribute it yourself method
  2. Get the Netflix CEO to assuage the fears of the movie industry that this won't be another Napster free-for-all
  3. License Janus DRM from Microsoft and work with TiVo to develop an equivalent
  4. Start developing a download manager, MCE plug-ins, TiVo interface and DRM wrappers
  5. Build out datacenter for distributing content (either torrents or content)
  6. Start ripping an arse-load of DVDs
  7. Test it
  8. Release it

As a Netflix customer and future Media Center owner, I'd move to this model rather than the snail-mail DVD system in a heartbeat.




Blogger LoveforMovies said...

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8:22 PM


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