Is ‘Roku’ the formula to solve the movie download dilemma?

Posted by Wolfgang Gruener

Los Gatos (CA) – Netflix and Roku today introduced a movie streaming box that, for the very first time, may attract the mass market to rent movies via the Internet and not via a store or by mail: The Roku box sells for $100 and all-you-can-eat download plans start at $9 per month. Is it convincing enough?

Quite frankly, most movie download service we have seen in the past two, three years fall into the “what were they thinking category.” CinemaNow and MovieLink, recently acquired by Blockbuster, launched rental and download-to-own movies with DRM restrictions that prevented users from distributing movie files to all other playback devices they own and from burning purchased content onto DVDs (this feature has been added later) in exchange for prices that in some cases exceeded $20 per download.   

It has been clear that the pitch of such a service had to change dramatically to make video purchases via the Internet much more attractive for the average consumer. Netflix has been offering all-you-can-eat movie downloads for some time now, but these downloads were limited to systems that actually can download content from the Internet, which – in most cases – would be the PC. Now there is a streaming Wi-Fi/Ethernet box that connects Netflix content directly with your PC and provided you already subscribe to the one of the company’s “unlimited” subscription plans, you can download movies and TV series directly to your television set.

What it takes is simply Roku’s $100 Netflix player and a network connection – via cable or wireless. The device comes with a remote control and lets you browse through available Netflix content, which currently consists of about 10,000 titles or roughly 10% of Netflix’ catalog. First reviews, posted for example on Gizmodo, give the device a thumbs up and we are relieved to hear the pocket-book sized player is fan-less and creates no noise. Roku did not publish the specifications of the player.

However, of course there are some downsides. First, even if the movies are being downloaded at certain portion of the content needs to be buffered to start playing. Roku says that this delay is typically about 30 seconds – which is about comparable to the startup time of Toshiba’s ill-fated HD DVD players. Second, the quality of the content depends on your available bandwidth. If you are using a common 1.5 Mb/s DSL line, expect to see VHS quality video. Roku says that DVD-quality video will require about 4 Mb/s bandwidth and high-definition, when it is made available by Netflix, even more. These numbers assume that you have the complete bandwidth of your broadband connection available and no one else in your household is downloading music, playing an online-game or watching YouTube at the same time.

However, it appears that Roku and Netflix have come up with an interesting content solution for the movie industry and it will be interesting to see how MovieLink/Blockbuster as well as Apple will react.

What is your take? Has Netflix turned commercial movie streaming into a convincing offer?