July 2008

From xbox.com:

“At E3, Microsoft and Netflix, the world’s largest online movie rental service, today unveiled an exclusive partnership to offer the ability to instantly stream movies and TV episodes from Netflix to your television via Xbox 360┬«.”

Netflix recently introduced its Watch Instantly program that allows subscribers to view selected (that is, the titles already converted) titles instantly on their PC. A plan costing as little as $8.99/month allows unlimited viewing during that month.

Well here is the trump card Microsoft was holding as it took egg in the face over the loss of the HD-DVD/Blu-Ray war. This is not another Xbox vs. Playstation post nor is it an HD-DVD vs. Blue-Ray treatise – it is a celebration of the fact that at long last a massive high-definition video-on-demand solution exists backed by two of the respectively largest players in the world.

Yeah it’s too bad it’s an exclusive grab for Microsoft because it means not everyone will be happy; investors in Playstation will punch all sorts of holes in it, and lots of finger pointing will happen. But every time I go to NAB show and see the big TV players scrambling for what is going to happen next and we all wonder when Broadband random-access, full resolution, full-length programming video will be available (yes Vimeo.com is cool and looks nice but really, do you want to watch 3 minute programs for the rest of your life?) well its now. Actually, it is technically this holiday season (2008).

I was already radically changing my movie-viewing habits by staying home to purchase whatever might already be up on the respectively meager offerings from XBOX LIVE Marketplace – it was worth it for instant on-demand on my 46″ HDTV. But with the introduction of Netflix and an $8.99 a month subscription to Netflix (with a $7.99 monthly Xbox Live Gold membership) – thus a total of under US$20 – I have access to tens of thousands of titles for unlimited use directly through my Xbox 360 with HDMI out to my HDTV.

But hundreds of questions arise as we contemplate the implications of this announcement. With Sony launching its video-on-demand (VOD) service on the Playstation 3, with portability to the PSP, are we caught once again in a format war – this time between Sony Playstation 3 and Microsoft’s XBox 360?

What will the new console-based VOD universe mean for distributors?

How will actors, producers, film composers/musicians and the rest collect royalties?

What will differentiate legitimate films from indie YouTUbe fare? Surely studio releases will qualify as “legitimate” films and television, but what differentiates them? As a film studio, Sony and all of its subsidiaries has a direct interest in the films in makes available, whereas Microsoft simply wants to push as much traffic through so that it can participate in the home entertainment lexicon.

One may argue that the audience that doesn;t yet own an Xbox, may not be so excited about having to commit to the platform just to take advantage of the exclusive Netflix opportunity. But look at the inverse – with the Xboxers super happy with this seemingly limitless and convenient option, the advertisers and studios should be asking – how will they get the Xbox/Netflix viewers if they aren’t in that catalog?