NetFlix-LG Plan Raises Questions

A plan by Netflix Inc. and LG Electronics to develop a set-top box for consumers to stream movies and other programming from the Internet to HDTVs, bypassing the need to use a PC, has resulted in more questions than answers.

The duo claims the venture is expected to deliver a “new online home entertainment service via technology embedded in an LG networked player” planned for the second half of 2008.

But while NetFlix has put great distance between itself and traditional movie rental players such as Blockbuster, primarily by embracing Internet streaming as a delivery method, its announcement with LG, a global TV maker, lacks key detail. The news was released in advance of next week’s Consumer Electronics Show in Las Vegas.

First, will the resulting set-top box (STB) also support other basic features, or will you need to keep the STB you have now? CE vendors are working to integrate functionalities via software in devices as opposed to adding devices. This streamlines home networking.

Will the NetFlix-LG STB be open or closed, meaning, will it enable consumers to receive non NetFlix content from the Internet, or will I still have to do that via a home PC?

Further, will the STB be embedded in LG’s HDTVs as DVR functionality is in many models or will the STB be truly standalone? And what home networking approach will it support?

Finally, at least for now, how will the new STB and online entertainment service be priced? It’s difficult to determine the true allure of a new offering, without basic pricing or a pricing structure.

The announcement failed to address any of these questions. For consumers to embrace NetFlix advances as they have dating back to 1997, some basic information would go a long way.

LG Electronics www.lgusa.com
NetFlix Inc. www.netflix.com

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