Burning at Both Ends

Any­one who has read this blog in the past (thanks, Mom!) knows that I’m a fan of Net­flix as well as the Fox Net­work show Arrest­ed Devel­op­ment. Today, Net­flix announced that it is going to be bring­ing back Arrest­ed Devel­op­ment in 2012 exclu­sive­ly to their stream­ing video ser­vice; firm­ly plac­ing them in the cat­e­go­ry of a pre­mi­um cable chan­nel. I’m also a fan of Apple and Ama­zon, who along with Net­flix, are busi­ness­es which rep­re­sent the future of the enter­tain­ment indus­try and media con­sump­tion, though in sig­nif­i­cant­ly dif­fer­ent ways.

Jon Gru­ber stat­ed the oth­er day that he did­n’t think Net­flix was capa­ble of cre­at­ing hard­ware to sup­port an “end-to-end solu­tion.” I don’t dis­agree that there’s essen­tial­ly no chance Net­flix will move beyond the app busi­ness and into actu­al hard­ware1. But I dis­agree with the notion that Apple and Ama­zon are pro­vid­ing end-to-end solu­tions. In fact, what Apple and Ama­zon are real­ly pro­vid­ing are mid­dle-to-one-end solu­tions. That is, they take con­tent licensed from a stu­dio and serve it over their sys­tems to their hard­ware2. Net­flix, how­ev­er, is mov­ing to the oth­er end by cre­at­ing con­tent to serve on their sys­tems to some­one else’s hard­ware plat­form via an app. In doing so, they get a wider installed base with no hard­ware invest­ment (which no one oth­er than Apple has real­ly yet to crack; though the Kin­dle Fire from Ama­zon is just a week old).

Net­flix has dab­bled with being a stu­dio in the past, or at least a financier of inde­pen­dent film. Their fold­ed Red Enve­lope Enter­tain­ment—which backed some real­ly great indie films—was a wor­thy try, but com­pet­ed against some of their bread & but­ter con­tent providers. While that fact has­n’t changed much, the stakes have. When Net­flix made the deci­sion to close their Red Enve­lope Enter­tain­ment divi­sion, the Apple App Store had just launched and the iPad had­n’t even been announced yet. That land­scape has com­plete­ly changed, with pre­mi­um net­work HBO hav­ing a real­ly ter­rif­ic app now that lets sub­scribers watch their shows on demand. The abil­i­ty to watch Game of Thrones any­time, any­where has sure­ly helped HBO’s sub­scriber num­bers and I think this is what Net­flix must have it’s eye on.

The price of Net­flix’s stream­ing ser­vice puts in the range with HBO and now Net­flix has the killer con­tent which will com­pel fans to sign up if they weren’t already sub­scribers. Thus they stand a chance to gain sub­scribers at the expense of pre­mi­um cable providers like HBO, espe­cial­ly among the grow­ing num­ber of cable-cut­ters (you don’t need a cable sub­scrip­tion to watch Net­flix shows; you do for HBO’s).

So, which is a bet­ter busi­ness to be in between hard­ware and con­tent pro­duc­er? I hon­est­ly don’t know, but giv­en the night­mare of con­tent licens­es all these tech com­pa­nies are hav­ing to nav­i­gate, I have a good feel­ing that pro­duc­ing pre­mi­um con­tent might be more as appeal­ing as get­ting into the hard­ware game. Though the mar­kets for iPads is essen­tial­ly the same age as the mar­ket for stream­ing video apps on such devices, the play­ing field among stu­dios looks a lot more leve than hav­ing to tak­en on a jug­ger­naut like Apple’s iOS devices from scratch.

You’re move, Ama­zon.

  1. This is the com­pa­ny that is rac­ing to dump phys­i­cal media, for one thing! []
  2. Note that, in the case of Ama­zon’s print pub­lish­ing, they are con­sum­ing the entire busi­ness between author an read­er. Now that is as much an end-to-end solu­tion as one could have, short of pro­vid­ing advances to authors. []

Amazon UnBox On My TiVo

So, many of you may have heard the news that Ama­zon opened up their Unbox for TiVo ser­vice today. This was way ahead of any­thing I expect­ed, as I just fig­ured it would be sort of like the vapor-agree­ment TiVo had with Net­flix. How­ev­er, the ser­vice was up and run­ning not very long at all after the ini­tial announce­ment, just two months ago. Once again, TiVo some­how man­ages to not only sur­vive, but sur­prise me and just about every­one else.

I signed up for the account ear­li­er today, which took no more effort than going to a page on Ama­zon and enter­ing your e‑mail and pass­word asso­ci­at­ed with my TiVo account1. For the next month or so, Ama­zon is even giv­ing a $15 cred­it for TiVo users who sign up. That’s pret­ty entic­ing for some­thing that is eas­i­er to sign up for than most web 2.0 ser­vices.

Unbox For TiVo

I was actu­al­ly some­what sur­prised to see just how nice the offer­ings were at Ama­zon. Not all of the Unbox store is able to be down­loaded to a Tivo (yet), but I imag­ine that’s not going to take long. It does­n’t appear that any major net­works or stu­dios are real­ly hold­ing out just yet. There are movies, which may be pur­chased or rent­ed, with prices between $8 and $16 to buy and around $4 to rent. I have no idea how long a “rental” lasts on the TiVo, but I’d guess three to four days from the time the down­load begins.

I saw quite a few shows that I enjoy (although I not­ed that it seems the iTunes store cur­rent­ly has more offer­ings, with some of the pop­u­lar ABC shows being a big hole at Ama­zon right now). I end­ed up just down­load­ing an episode of Arrest­ed Devel­op­ment since I have the DVD’s and had even record­ed some episodes on the TiVo a while ago (all of Sea­sons 1 and 2 are avail­able, I chose Episode 4 “Good Grief” from Sea­son 2). I fig­ured this would allow me to be able to make a fair com­par­i­son for qual­i­ty. Pur­chas­ing was pain­less with Ama­zon’s patent­ed2 One-click pur­chase. All I had to do was select which TiVo box to send the down­load to from a pull down menu (it had found both of them by name from my account after I pro­vid­ed my infor­ma­tion; yes, we have to Tivo box­es. Don’t judge us.). I select­ed our “Sun­room” unit so I could watch the show while on the tread­mill (seri­ous­ly, stop judg­ing me. I mean it.). Ama­zon states that the down­load begin and appear in the “Now Play­ing” list on the TiVo unit select­ed with­in 15 min­utes. Well, it was more like 30–40 min­utes. Fur­ther, it took anoth­er hour or so for it to be avail­able to watch3, and this was only a 22 minute pro­gram. I’m assum­ing that increas­es to a few hours for a fea­ture film (rental or pur­chase).

screenshots of Amazon Unbox on my TiVo

Screen­shots of the TiVo menus under the “Now Play­ing” sec­tion of the TiVo.

Quality in the Unbox

I did­n’t have a lot of expec­ta­tions for the qual­i­ty of the video to be hon­est. How­ev­er, I was glad to see I had under­es­ti­mat­ed the qual­i­ty some­what. It was at least as good as the “high” qual­i­ty record­ing set­ting on the TiVo itself. Of course, we only have stan­dard def­i­n­i­tion TiVos on our SD tele­vi­sion sets. All the same, I don’t think it is going to dis­ap­point the aver­age Series 2 Tivo own­er.

Now, you are not able to trans­fer the show to anoth­er TiVo or to a TiVo Desk­top serv­er on your net­work. I’m not going to say it’s impos­si­ble to get the video file off of there, but the effort such a thing would require would­n’t be at all worth it. There does­n’t appear to be any time lim­it or expi­ra­tion date on pur­chas­es pro­grams or movies, though. Again, I’m not sure how the rental option works.

Screenshot of Unbox Video

G.O.B. per­form­ing mag­ic is mag­ic to me. While this screen pho­to is pret­ty bad, the actu­al qual­i­ty of the pic­ture is real­ly good; stan­dard def­i­n­i­tion with no notice­able arti­facts or com­pres­sion issues.

Some Potential in the Unbox

I’m going to say it: this is the first true imple­men­ta­tion of con­sumer-friend­ly IPTV. It for sure isn’t the first or even the most ide­al method of hav­ing con­tent brought via the inter­net to your tele­vi­sion. How­ev­er, pro­vid­ed one has both a net­worked TiVo and an Ama­zon account, it is remark­ably easy to use (in typ­i­cal TiVo fash­ion). Short of set­ting up a secure home net­work, which isn’t always the eas­i­est thing in the world, vir­tu­al­ly any­one could be watch­ing down­loaded con­tent from the com­fort of their liv­ing room in no time. TiVo and Ama­zon beat Apple to the mar­ket on this one and only time will tell if they can gain and keep some of the mar­ket share as a result.

Is this the Net­flix or the iTMS killer? Prob­a­bly not. Ama­zon, while known for hav­ing pos­si­bly the largest media cat­a­log on the plan­et, may not yet have access or agree­ments in place to pro­vide all that media to the con­sumer int his fash­ion. As we have seen time and time again, that is prov­ing to be the killer step in the race to pro­vide con­tent in this mar­ket. Cer­tain­ly, TiVo and Ama­zon have put togeth­er an fair­ly impres­sive offer­ing here, though. If they could have a set month­ly fee for rentals and open up more of Ama­zon’s vast cat­a­log, I imag­ine Angela and I would eas­i­ly choose this over Net­flix (sor­ry, as much as I love Net­flix, their agree­ment with TiVo for this exact same ser­vice fiz­zled). I have no doubt that the Apple TV will eas­i­ly rival TiVo in qual­i­ty of inter­face and ease of use. The prices for the con­tent to buy are the same between Ama­zon and iTMS right now, but Apple has yet to do any sort of rental ser­vices. Is IPTV rental, or what we once called pay-per-view and Com­cast now calls On-Demand, some­thing con­sumers real­ly want? If it is seen as pay­ing an month­ly fee to have lim­it­less access to a near­ly bot­tom­less library of video enter­tain­ment, the quite pos­si­bly it is.

I had essen­tial­ly no expec­ta­tions of the Ama­zon Unbox for TiVo ser­vice and so I was hon­est­ly pleased to see just how easy it is to use and the lev­el of qual­i­ty it has. There are no doubt DRM demons wait­ing to spoil my fun here. Fur­ther, in a mar­ket where con­tent is every­thing, get­ting media own­ers to allow them to use this is going to be the real race. Who­ev­er ends up on top, hav­ing both Ama­zon and Apple in our liv­ing rooms is going to help con­sumers in the end.

  1. Of course, I already have our TiVo’s con­nect­ed to the home net­work which has a broad­band con­nec­tion. It would cer­tain­ly take some­one with a brand new TiVo more than the 30 sec­onds it took me. []
  2. World’s lamest patent? Prob­a­bly. []
  3. Unlike trans­fers between TiVo units over a home net­work, you can­not begin watch­ing a Unbox down­load until it is entire­ly fin­ished. Frankly, I’d say this is a wise thing since inter­net down­load speeds can be wonky on a file this large and it is very frus­trat­ing to have a video pause for some net­work lag. []