and announced a partnership to develop and market a set top box that downloads content direct to the TV. This solution removes the need for a PC and joins similar efforts from . The service is expected to be available this fall. The set top box solution will be HDTV compatible, but the announcement was not clear as to whether the downloads will be in HD. Netflix currently has 7 million subscribers, most of whom rent from Netflix’s 90,000 DVD titles via the U.S. mail. In addition, Netflix reports about 1 million members take advantage of their existing PC download service which offers about 6,000 titles. There have also been recent rumors that will announce a similar strategy later this month.

Direct to TV downloads is a growing phenomenon – one that may have serious competitive implications for triple play providers. The jury is still out on whether consumers will adopt the service en masse. There are considerable challenges to overcome, including adding yet another set top box (and remote control) to the equation. Some analysts argue that video downloads will only work if the service gets integrated into an existing STB/DVR, or the existing STB is replaced with an “all in one” STB which includes video download capability. Service providers including cable and telco are studying how/whether to incorporate video downloading. Some like AT&T (through their service) already do so. It would seem that existing providers have the upper hand if they incorporate video downloads into their existing subscription TV model. Solutions like the announced Netflix/LG partnership may be able to build a niche following, but I think they would have a very difficult time supplanting large numbers of cable and telco video subscribers. Time will tell of course and predicting consumer behavior is an inexact science to say the least.

Join the Conversation

Leave a Reply

Your email address will not be published. Required fields are marked *

Don’t Miss Any of Our Content

What’s happening with broadband and why is it important? Find out by subscribing to Telecompetitor’s newsletter today.

You have Successfully Subscribed!