Netflix to steal Vudu's set-top magic?

Could Netflix be about to launch a set-top box?

Netflix to steal Vudu’s set-top magic?Dave Zatz over at Zatz Not Funny thinks so, after the movie rental company that’s best known for putting DVDs in the post, updated its trademark filling to explicitly reference a set-top box that can download and deliver video content from the Internet directly to a television.

Zatz notes that this isn’t first time that talk of a Netflix set-top box has surfaced, which begin last April with the recruitment of Anthony Wood to the newly created position of VP of Internet TV. According to the press release issued at the time, Wood would be “responsible for all aspects of product development related to the company’s strategic intent to deliver movies directly to subscribers’ televisions via the Internet.” Prior to joining Neflix, Wood was CEO of Roku, the company behind the SoundBridge line of audio streaming devices, and before that he was founder of ReplayTV — no less — credited with being the creator of the digital video recorder (DVR). In other words, Wood has some serious hardware pedigree.

In late June, Engadget said they’d received a tip-off from somebody claiming to have attended a focus group where they were asked to test a Netflix set-top box, which was to carry a price of between $50-100.

However, when Variety ran a story the following month based on a quote from Netflix VP of original programming Eric Besner, which appeared to confirm a set-top box was in the works, a Netflix spokesperson was quick to shoot down the report.

The company has, however, confirmed that it is investing $5 to 10 million this year in developing its approach to online movie delivery.

Adding it all up: Woods appointment, the R&D budget, an updated trademark application, along with the unconfirmed Engadget and Variety reports, it looks almost certain that Netflix is about enter into the set-top box arena.

VuduIf or when this happens, where will it leave Vudu (see our full review), the latest and most hyped service that delivers online movie rentals directly to a dedicated set-top box connected to a television.

Based on a couple of assumptions, in a pretty poor position.

While Vudu appears to have the technology (aside from a lack of WiFi, the Vudu hardware, UI and delivery infrastructure is sound), it’s lacking in terms of content (missing many major releases) and price-point. The box itself costs nearly $400 and rentals work out more expensive than a Netflix or Blockbuster account.

In contrast, if Netflix can get the box down into the $100 price zone (subsidized by a minimum membership contract), keep to its current pricing model and offer the same wide ranging catalog of content as it does for its postal service, it could be the first set-top box movie rental service to really takeoff.

Of course, they are quite a few ifs.

last100 is edited by Steve O'Hear. Aside from founding last100, Steve is co-founder and CEO of Beepl and a freelance journalist who has written for numerous publications, including TechCrunch, The Guardian, ZDNet, ReadWriteWeb and Macworld, and also wrote and directed the Silicon Valley documentary, In Search of the Valley. See his full profile and disclosure of his industry affiliations.

6 Responses to “Netflix to steal Vudu's set-top magic?”

  1. G says:

    Steve – Netflix went this route a couple of years ago with TiVo- a lot of announcements – then the hype just fell by the wayside. Among other things – release windows were a sticking point – much of which will get some clarity after 2010 (when Starz will have to re-negotiate IP rights – as in internet protocol).

    Interesting this is popping up again….

  2. Steve O'Hear (editor) says:


    Thanks for this. I’d forgotten about the TiVo link.

  3. David Mackey says:

    I’m not sure why companies are so insistent on creating stand-alone set-top boxes. Why not just make a wireless receiver that hooks into the TV and utilizes the PC as the real heart? I’d much rather that than yet another device to stack along with the (nearly extinct) VCR and (not so extinct) DVD player.

  4. Bruce says:

    My Xbox360 does this already.

  5. JonO says:

    The Vudu is now priced at $249…

  6. xboxer says:

    The Netflix box should be out by this Xmas and will include the entire catalog 85,000+ including

    HO HO HO

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