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When the computer becomes an appliance

Submitted by on Monday, 1 February 2010 2 Comments
I bought a computer two weeks ago.

That in and of itself isn't earth-shattering. I seem to buy a computer every few months of late.

What's different, though, is that the newest computer never will be used to write an email or an article. It rarely will surf the Net. It might see action occasionally as a telephone once Dad is able to get sporadic Web access, because it's the only station in the house that has a Web cam. I wasn't necessarily in the market for a computer with a Web cam - it just happened that the laptop with the best combination of power and price came with one.

The new computer's primary purpose, though, will be as an appliance. Its job description: Stream Netflix movies.

Turns out I'm part of a trend, one that saw Netflix grow by a million customers in the fourth quarter of last year, according to the Wall Street Journal, and has Amazon again considering a deal to buy Netflix. It's a trend the has Microsoft looking to shift Xbox more toward video, Hulu considering a membership fee, major studios looking to cut a deal with YouTube and other providers such as Boxee pondering on-demand or subscription services.

Our choice was easy: Pay $4.99 for one movie on demand through our satellite provider or $8.99 for unlimited monthly DVD rentals and streaming through Netflix. The closest video store is 40 miles away and the popular titles disappear quickly from the few rental kiosks on post.

Still, a rental-only Netflix would not have been enough to seal the deal for us. Though we're close enough to a distribution center to get three-day turnaround on DVDs through the mail, three days is too long for kids accustomed to riding to a video store and picking up a movie. The streaming movies are more than enough to keep them occupied during the wait for DVDs to arrive in the mail.

Streaming - specifically, its price point - also is where Netflix has the edge over Blockbuster. Though Blockbuster does stream new releases that Netflix doesn't, they cost $3.99 each. Do that three times a month and you've passed your Netflix bill. Blockbuster does offer some titles for free, but the selection is very limited.

Notably missing from either the Netflix or Blockbuster stream: most Disney titles. Disney will let people who have purchased movies stream from Disney's site, but the 12 titles available primarily are new releases. Maybe Disney thinks it's big enough to draw viewers to its site and bypass companies such as Netflix.

I suspect that plan will work as well as it has for record companies who thought they could sit out YouTube and draw music fans to their own little corners of the Web. Many of those same labels now have YouTube videos with convenient links to sites where listeners can purchase MP3s.

Film studios have said they're eager to get their movies online as long as they can collect "a reasonable fee." It would seem that any fee they could get would be more reasonable than leaving their titles to the mercy of pirates - and I'm not talking about the Capt. Jack Sparrow variety that currently has to be rented, not streamed, on Netflix.

Those familiar with studio discussions have indicated that "reasonable fee" will be around $3.99. Though that's cheaper than an in-store cost of $5.40, it doesn't seem to be much of a discount considering they're not going to have to pay a distributor to build a store where the distributor will have to pay people to whom an ever-dwindling number of customers will pay money to take home DVDs.

All this haggling over fees is reminiscent of the newspaper industry and its fixation with paywalls as the solution to all its problems. The real problem for newspapers, as it is for the movie studios, is that technology has changed, customers have changed and you're not changing quickly enough. Don't believe me? Just look at Netflix's growth over the past year.

It's going to be interesting to see how this all shakes out. Meanwhile, our newest computer will remain attached to our newest TV, never experiencing the thrill of word processing or the excitement of photo editing. Its only job is to serve us movies.

Copyright 2010 Debra Legg. All rights reserved.

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2 Comments »

  • Sandra Foyt said:

    We’re part of the Netflix revolution too, but we use a blueray DVD player to stream movies & a laptop to queue them. But, I still will occasionally go a for a pay on demand when there’s something I just have to see right this minute. Fortunately, that’s rare!

  • Debra said:

    I was thisclose to paying for “The Hurt Locker,” but Netflix finally coughed it up. Usually, it doesn’t bother me to wait either but my husband had already seen “The Hurt Locker” and kept trying to tell me about it!