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Sony Adds Netflix: OTT Video Catch-Up or Leapfrog?

Not to be outdone by rivals Vizio, Panasonic, LG, Samsung, and other HDTV manufacturers, as well as gaming consoles like Xbox 360, Sony Electronics announced last week that, yes, they too will be supporting the Netflix video streaming service via an upgrade due this Fall. Sony was one of the first HDTV vendors to embrace an over-the-top video (OTT) strategy, going so far as to launch their own connecting device in 2007—the $199 Sony Bravia Internet Video Link . But as we have seen with other devices, coaxing consumers to buy an add-on module for Internet video versus baking it into the TV itself really is the difference between niche and mainstream adoption. And other modules, like Roku’s $99 player, are cheaper and have expanded content options, or in the case of Vudu, support more HD titles.

What makes Sony’s announcement compelling is that, unlike most of their competitors, Sony’s Netflix streaming service will work with many of the HDTVs it has shipped in the past two years, bringing Netflix's 12,000 streaming movies into the living room with no additional purchase or effort (other than Netflix subscription fees and the hassle of having to figure out how to link the Internet to your TV if you did not already do that). That’s right, no need to buy a new HDTV to get Netflix if you already have the proper Sony model, which includes the W5100, Z5100, and XBR9 series of TVs. Of course, if you already have a Bravia Internet Video Link then you are good.

In addition to Netflix, Sony’s OTT content partners include Amazon Video On Demand, YouTube, Sony Pictures, Crackle as well as special interest content from Sports Illustrated, Epicurious.com, Style.com and others.

Interestingly, Sony has built their own customized interface for Netflix viewing, suggesting theirs is more elegant than what you would get natively from Netflix. On this point I am sure Netflix would disagree. In a recent podcast, Steve Swasey, Vice President of Corporate Communications with Netflix, told us that the intuitive interface and recommendation engine are some of the biggest differentiators for Netflix. Steve also told us that Netflix’s goal was to be imbedded in an ever increasing range of electronic devices from HDTVs to the various set-top boxes and OTT add-on modules out there, so we are not too surprised by Sony’s announcement.

What will be interesting to follow is how consumers will view this functionality. While die-hards could certainly get more utility by adding the Roku player to any HDTV they already have, for the mass market there is a certain comfort in exploring a capability that comes already imbedded in the TV. They may not use it right away, but at some point a good percentage will want to try it out. This of course, will drive a larger battle among all the HDTV manufacturers to provide more content options, cooler applications, and a richer interactive experience. HDTVs are becoming like PCs in this regard, with software upgrades and the overall form factor and operating system/UI becoming the defining factors over and above the raw capabilities of the hardware.

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