Product launch of the week: Netflix rental business

Netflix helped revolutionize the movie rental business with its business plan. And now, the company is entering the race to get downloaded video onto the television sets of consumers.

Netflix helped revolutionize the movie rental business with its business plan. And now, the company is entering the race to get downloaded video onto the television sets of consumers.

Early last week Netflix, which now has over seven million customers, announced a deal with LG Electronics that will result in the development of a set-top box that would let consumers stream movies and other content directly from the Web to their high-definition TVs. The product is scheduled to become available in the second half of 2008 and is expected to make its debut during this week's International Consumer Electronics Show in Las Vegas.

The good news for Netflix and LG is that there aren't many other players in this space. The bad news is that the other major player in the category just happens to be Apple. And while Apple hasn't had the greatest of success with Apple TV, which launched last year, it's looking to turn that around in 2008. Apple has reportedly inked a deal with News Corp's 20th Century Fox studio for a new online video-on-demand service. That deal will likely be announced at Macworld, which starts on January 14. And according to rumors floating around the Web, there will be a number of other studios joining Fox and Apple on stage at Macworld.

At cinematical.com, Peter Martin says there's an upside and downside to this and writes that both Netflix and Apple could potentially offer a “much greater choice of content.” However, they will both “require up-front payment for still another box in your living room, while cable and satellite providers do not.”

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