Reel Pop

By Andrew Wallenstein
For sheer guts, you have got to give it to Netflix, which plans to make LG Electronics the first of a series of hardware partners it will enlist to enable movie delivery to TVs via set-top devices (also reported in Reuters, NYT, WSJ). This is a market where even the mighty Apple has failed to establish a footprint, which hasn't deterred everyone from Vudu to SanDisk.

Now maybe the market is awaiting just the right entrant to figure out how to bring the Internet's bounty to the television; I agree that is the holy grail. But I am dubious that any kind of hardware add-on, even one that embeds the functionality in a device that serves a different purpose like Microsoft's XBox, is the answer.

Consumers are not going to be pulled into this business model on the strength of a brand; the slow growth of Apple TV has already proved that. Netflix is one of the few companies out there that can claim a brand loyalty that even approaches Apple, and yet it's not enough: Consumers won't try the PC-TV linkup without the conditions that will turn this into a real market: what is the price point, catalog, set-up difficulty, etc.

But what if the functionality could be baked into one device? Maybe the Sharps and Panasonics of the world are best poised to make this happen. While a separate box may provide a short-term solution, isn't a new breed of television monitors like Sony's Bravia the real answer? Cut out the middle man entirely; let the TV set itself be the device that connects to the Internet. Surely someone at CES will have the kind of technology that will make all these boxes seem pointless. (Update: NYT's Bits blog makes a similar point)

Speaking of which, is there anything that will actually be surprising at Macworld and CES later this month? Seems like all the good announcement are leaking in advance.

On a separate note: Two days into the new year and Netflix has already provided the kind of announcement that justifies a new category gracing this blog this year: the "gamechanger," the of innovation that has the potential to reshape the media marketplace. More on that in the coming months.