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All Netflix Clients Are Not Created Equal


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All Netflix Clients Are Not Created Equal
Colin Dixon, Senior Partner, Advisory

 

May 11, 2010

It is getting hard to find a connected TV platform that does not feature a Netflix streaming client. The Company is clearly intent on ensuring that Netflix customers are able to access the service from whichever TV-connected device they may purchase. As of May 2010, the Netflix client is available on 12 different TV platforms, including the top three game consoles, TVs and Blu-ray players from Vizio, Insignia, LG, Panasonic, and Sony, as well as TiVo DVRs.

As if this is not enough, Netflix is going mobile. The iPad app is winning praises from users (and in some cases being touted as reason enough to purchase the device) and will soon hit the iPhone. As well, it appears that Android users will soon be able to enjoy the service, as Netflix is currently hiring Android developers.

Is it just a matter of time before the Netflix client is available on every connected video device? The answer to that question is a resounding “NO.”

Multiple Devices = Multiple Client Applications

Developing and maintaining this growing variety of clients places a huge burden on the engineers tasked with building them. For example, the Xbox 360 client has its own unique development environment, one very different from any of the other platforms on which the Netflix client runs. From the interface to the encryption technology, everything about this Netflix client is specific to the Xbox. Sony’s PS3, however, is based on technology from RCDb and delivered on a Blu-ray disk. The PS3’s encryption and streaming platform are also different from Xbox. In fact, I suspect that little if any PS3 code is shared with the Xbox client.

Different consumer electronic devices may share software components such as a Linux operating system, Widevine encryption, or even the Netflix streaming technology. However, this does not mean that one version of the Netflix client will run on all of them. Far from it. The client has to be custom-made for each of the devices on which it runs so that the client can accommodate different screen interfaces and hardware capabilities. This means that each client must be individually coded, tested, improved, and maintained.

All of this adds up to an enormous engineering effort and, consequently, Netflix must be amassing an army of application developers.

For Netflix — and any company seeking to deliver multi-screen video services using the Internet — the situation is becoming untenable. Aside from the fact that all of these different clients are confusing to customers, there is simply no way in the long term that any single company can support all these different versions of the software.

Multiple Client Applications = Slow Innovation

In an ideal world, the entire CE industry would agree on a set of standards that each device would support, thus making life much easier for content providers such as Netflix. These standards would cover two general areas:

  1. An application standard for content providers to create an interface that lets a user browse and play media, and
  2. A video standard for delivering streamed movies and shows.

With wide-scale support for these standards in place, a content provider would have to build only one application that would run on all the relevant CE devices. As well, the provider would only to have stream video in a single format and have it play on all devices.

Given the clear and convincing appeal of this concept, one would expect to see CE manufacturers moving in this direction, right? Not a chance. In fact, they are moving in precisely the opposite direction. CE manufacturers are working to differentiate themselves with their own proprietary portals and app stores.

For content companies like Netflix, this is bad news. Given the lack of standards in this space, they must continue to invest in building and supporting many different versions of their client software. Worse still, new features can only be added one client at a time. For example, the Xbox client has been able to browse the entire Netflix streaming library for nearly a year. Roku is only just introducing this feature. This is a huge problem for a company like Netflix, which prides itself on service innovation. As well, new client support will be very slow in coming, with many minority platforms never supported at all.

Perhaps Netflix, with its nearly 14 million subscribers, has the muscle to force manufacturers to reconsider the value of standards. Until then, if you want to enjoy the latest Netflix streaming innovations, pick your CE platform very carefully.



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Comments

 

Brian Mahony said:

Colin, I think you might be putting a bit too much weight on CE OS environments and UIs and not enough on content and business model. Netflix works well and has grown in popularity because it is simple, has a vast library, and is cheap (DVDs by mails and "all you can eat" streaming for $9). CE vendors are coming to them to add Netflix as a jewel in their offering, not the other way around. Netflix is happy to oblige as they make money with more subscribers. This just makes too much sense. Netflix business model doesn't need a lot of nifty "features" to work.

-Brian Mahony

May 11, 2010 7:16 PM
 

Andy Tarczon said:

It's hard to believe that a system as young as the Netflix Watch Instantly service already has "legacy" code issues.  Colin points out the 12 TV platforms, but this breaks down to over 50 separate devices that can be connected.  

If we look at the bevy of 1.0 Client platforms in the market (those that cannot update their queue from the device), then we start to get a sense of the headache Netflix will have managing feature roll-outs like subtitles, content encodes for various platforms, and client development.  

Netflix is well-positioned as a supplement to the paytv experience, but do they now risk becoming prone to the long planning and roll-out cycles of the MSOs?

May 12, 2010 8:53 AM
 

Steve Hansberger said:

Brian and Colin,

You are right that NetFlix has become a check-box must-have feature, and does not need all the features to succeed.  But there is also truth to what Colin is saying.  How can CinemaNow and Vudu/Wlamart also challenge the entire connected CE universe and connect to 50 or 80 or 100 or more devices?   Not only are the clients different, the chips underlying, the OS, DRMs,  theremote control interace, consumer  UI's etc are always being revised in the fast paced technology leap frog race.  How can anyone keep up?  

NetFlix appears to be the best suited by far, and has to have Apple scared, because the subscription model they have kills PPV and transactional in terms of value proposition and consumer appeal and their success in OTT surpasses everyone by miles.

NetFlix can do it precisely because they are better at managing the complexity of the technology, and it creates both a barrier to entry to others and a clear differentiating feature for  NetFlix itself, who else can lay claim to a quality consumer experience on Windows, Mac, soon Android, and embedded on so many different devices?  

Even if it is extremely difficult to manage, for NetFlix it is clearly not untenable to run on all the game consoles, PCs, BDP's , Roku and iPads/Pods.  This creates the future of the first video service that runs on almost all the key devices and screens that matter.

This makes  NetFlix  the first real potential OTT candidate for any content on any device and  the first successful virtual MSO in the years to come.

May 14, 2010 2:01 AM

About Colin Dixon

 

Colin Dixon
Senior Partner, Advisory
Formerly: Senior Executive at Microsoft/Web TV, Liberate and Oracle

Colin Dixon is the senior partner for TDG’s advisory services. He is a Senior Technology Consultant with a background building and managing all aspects of a technical business. His extensive experience includes new media, communications, networking and network management - industries where he has a proven record of developing and delivering top quality products and services on time to meet market needs.

Colin has held senior executive positions at Microsoft/WebTV, Liberate and Oracle where he was responsible for technology and business teams delivering to the Cable, Satellite and IPTV industries. Over the last 15 years, he has led various corporate departments including engineering, business development, product and program management and marketing.

Colin is a published author and accomplished speaker including presentations at major industry shows such as NAB and IBC. He graduated from the University of Reading in England with a Bachelor of Science degree in Electrical Engineering. He holds a Masters in Engineering from the University of Florida and has post-graduate business education experience from Stanford.