NetFlix + TV = Killer App

Drive-In Movie Theater Screen
Originally uploaded by KB35.

Just so we are clear it seems pretty obvious that AppleTV is cool and obviously a required product for something like the Video iPod, and iTMS. But just because it seems obvious does not make it the instant hit that the very cool in I want one to rub it all over my body kind of way the iPhone is. Especially now that DVR and OnDemand are fairly ubiquitous.

What would push the AppleTV over the top and make it click in the mind of the consumer. I think it would be a partnership with NetFlix. Why would you rent movies when you can download them for a small price? Well because people do not necessarily want to own the movies, they rather rent them. NetFlix has just launched a streaming service for about 1000 movies so far. $5.99/month will allow you to watch 6 hours of streaming video. $17.99/month will allow users to view 18 hours. The price of a movie for an iTMS download is $9.99. For half the cost of one month of service you can get a two hour movie you can watch over and over again. Instead of receiving 8 times as much new content in that month.

But if Apple were to partner with NetFlix and allows NetFlix movies to be streamed to the AppleTV then iTMS users could rent thier video instead of having to buy it and NetFlix users could get to watch their streaming movies on TV. Apple wouldn't take much if any profit on the monthly fee, because it helps sells AppleTVs. Just like the iTMS helps sell iPods.

Preposterous you say. Apple would never partner like that when they could do it themselves. I'd counter by saying they already did with Audible. Apple could've easily sold audio books by itself on iTMS, but by partnering with Audbile they do not have to reinvent the wheel. Same idea applies to Netflix. Apple wouldn't have to set up a streaming service they would just have to create a way for iTMS to link to NetFlix's service and NetFlix doesn't have to create a box that streams content to the TV.

Of course the biggest factor would be the current size of data pipes getting into homes, but bigger and faster pipes are coming online all the time. Thus this would not be a problem in the near future.