This is what Shawn Morton would look like if he had been made of LEGO -- the personal website of Shawn Morton
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Friday, February 3, 2006
Fantasizing about Netflix
OK, I know I've posted too much about NF lately; however, several things in the news lately made me think about how NF could get much better (and have a sustainable long-term business model). So I will deviate from my throttling experiments to actually provide some constructive feedback.

First, let's start with the facts, rumors and speculation:
1. Fact: HD-DVD and BluRay are coming and they are going to confuse the hell out of most consumers. They will also put a pretty large burden on NF when (and if) they choose to adopt one or both of them.
2. Rumor: There is going to be a set-top box coming from Netflix. See this post from Hacking Netflix for a screenshot of a registration interface that briefly surfaced on the NF site last year
3. Speculation: Recent job postings for NF engineers and a product manager to create the aforementioned set-top box.

So what would all of this mean for those of us using Netflix? Well, here is my Netflix fantasy (that just sounds wrong, doesn't it?):

Without abandoning their existing mail order business (for now), Netflix creates a set-top box (let's call it the Netflix Player or NFP, for short). The NFP allows you to interact with the NF website (see recommendations, check out your Friend's list, manage your queue, etc.) on your TV screen and then download a certain number of DRM-protected movies to the NFP hard drive.

As new high definition formats emerge, NF can simply upgrade the software of the NFP to allow the display of high definition movie formats.

In the short term, NF would dole out a bunch of cash to get this going; however, in the long term (when new competing and expensive formats are being added), NF could save big money (and attract new customers who don't want to hassle with which HD format to choose) by offering HD movies to the NFP (no need to buy an inventory of the same titles in both standard, HD-DVD and BluRay). Maybe as a format wins out, HD discs could be added to the mail order business, too; however, this is my fantasy, so mail order doesn't matter.

And before you start poo-pooing the idea because of bandwidth limitations/download times, think of this: NF could make the box smart enough to pre-download the next X number of movies in your queue. For example, you can have 3 movies to watch; howeverm the NFP will go ahead and download the next 3. You just can't access them until you delete one of the ones you're watching. Back to the fantasizing...

NF could offer different tiers of their service that add more bandwidth (faster downloads), allow more movies stored at one time (3, 5, 10, etc.) and allow for a certain number of movies to be added to portable devices like the iPod (which has the DRM thing all worked out).

Imagine being able to select a format (or multiple at once) from your Netflix Player before you download a movie(i.e. standard definition, high definition or iPod). So you could watch the movie at home in HD and then take an already-converted MPEG4 version with you on your iPod.

And to take this even further, NF could offer the software to other consumer electronics manufacturers, especially TiVo and the cable DVR makers. This would allow those customers to tap into the NF service and use existing hardware to store the content and provice connectivity to portable devices.

So that's my fantasy for Netflix. A little kooky, sure. However, I think NF has to see that the days of mailing discs will be over as soon as someone creates a solid download service (with support for HD content) with great user tools. And even if mail order never completely dies, the addition of HD-DVD and BluRay to mix will make things really expensive really quickly. I don't think price hikes for new formats will go over well with consumers. They are going to have to give us more in order to get more money.

I think NF already knows how to make the great tools and, hopefully, they are working on the rest.

About Shawn Morton

Married father of 6; VP of Social Media at JPMorgan Chase; gluten-free; gadget enthusiast; hair metal aficionado; #Movember man View more on LinkedIn.