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October 29th, 2008
"Due to recent financial difficulties, the light at the end of the tunnel has been temporarily turned off."
-- Placard seen at Applebees Restaurant, Richland, Wash.
From time to time, Apple has made impressive sounding announcements about the success of its Apple TV, but the facts show that during the time that Apple has failed to work with Netflix, the DVD rental company has been slowly killing the Apple TV. The result is that the Apple TV will linger on, by Mr. Jobs' admission, as a hobby throughout 2009.
I have been keeping an eye on Netflix over at the iPod Observer ever since Netflix announced its partnership with LG electronics to deliver Netflix movies via the LG BD300 Blu-ray player. Last week, Netflix entered into a similar partnership with Samsung.
 Samsung BD300 Blu-ray player |
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It was natural to ask why Apple wasn't partnering with Netflix so that Apple TV owners could also view movies streamed via their Netflix account. I chalked it up to the idea that with all the apparent success Apple was having with the Apple TV, thanks to Apple's powerful marketing efforts, that Apple doesn't need to work with Netflix.
So I did the math, and I found out I was wrong.
Assumptions
The tale to be told of the Apple TV is in the numbers. Because Apple is shy about revealing sales of the Apple TV, one has to back out the numbers. That's not too hard to do with some simple assumptions, based on my own habits and those I've observed of others.
The average Apple TV customer:
- Rents one movie per week.
- Buys one movie per month.
- Buys 20 TV shows per month (SD + HD)
 Apple TV |
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Backing Out the Apple TV Sales Numbers
We can use Apple's own numbers to back out how many Apple TV's they've sold. From Apple's press announcement of June, 2008, Apple said that they sell or rent 50,000 movies per day. From the assumptions, the average customer buys or rents five movie items per month. Hence:
(# Apple TVs x 5 items/mo/atv x 12 months/yr)/(365 days/yr) = 50K/day
That gave me a number of about 304,000 Apple TVs in place. Next, Apple claimed recently that they've sold 200 million TV shows, most of which were SD over the 19 months that the Apple TV has been shipping. Once again, we have:
(# Apple TVs x 20 TV shows/mo x 19 months) = 200M
In that case, the number of Apple TVs works out to 526,000.
A good way to verify this number is to do a sanity check with a different algorithm. Every time I go into an Apple retail store, I innocently ask how the Apple TV sales are doing. The answer I typically get is that they sell about 2-3 per day. Colorado is probably on the low side compared to east and west coast cities, so I'll use the higher number.
200 U.S. stores x 3 ATV's/day x 30.5 days/mo x 19 months = # Apple TVs
I get 348,000 with that method, which is in reasonable agreement with the estimates above. I'll use a final estimate, averaging all three methods, to obtain 393,000 Apple TVs sold in 19 months.
What's the Apple Revenue?
In order to stay on equal footing with Netflix, which I'll analyze later, I'll focus on total revenue. There is a useful story over at Gizmodo, based on an iSuppli Bill of Materials analysis, that shows how much money Apple makes on each Apple TV, and it isn't much. Even so, I'll stay with total revenue in this analysis. I'll use an average selling price (ASP) of $279. Then, pro-rating the 393,000 Apple TVs in 19 months, Apple generates about US$69M in revenue each year on the hardware.
A hobby indeed.
Next, because Apple hasn't revealed their percentage take on content sales (at least I couldn't find a reference), I'll assume that Apple takes 1/3 of the price of movies and TV shows. 126 million TV shows per year times $1.99 times 33 percent is $84M. Add to that 40,000 movie rentals per day, we get $14.6M. Finally, 10,000 movie purchases per day also amounts to about $14.6M per year. Even if my estimate of Apple's take is off significantly, the effect is small and the conclusions remain valid.
Independent of GAAP rules, Apple is generating a total, by my estimates, of about $182M per year in gross revenues from the hardware and content sales for the Apple TV product.
 Netflix, Los Gatos, Calif. |
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The Netflix Side
Based on a report obtained from Barclay's research, I collected the following numbers for Netflix.
- Annual Revenue, about US$1.36 billion.
- Total subscribers, about 8.7 million.
- Year/year growth in subscribers, about 23 percent.
- Year/year growth in revenue, about 16 percent.
- Estimated: Average monthly revenue per subscriber, about $13.07
- Estimated: Delivery of 1.1 million movies/day compared to Apple's 50,000.
In terms of a business vs. a hobby, Netflix is generating over seven times the annual revenue of Apple TV*. In addition, Netflix is vigorously creating new outlets for its content: Xbox 360, Roku box, PCs, Macs**, LG BD300 Blu-ray player and Samsung BD-P25xx series Blu-ray player. So when I ask myself who's in the driver's seat for the digital living room, Netflix is way ahead of Apple and pulling away.
Conclusions
Apple continues to regard Apple TV as a hobby and has curiously failed, so far, to secure an agreement with Netflix. Instead of getting an Apple TV into every Netflix subscriber's home, Microsoft, Roku, LG, and Samsung are, in Apple's absence, seizing the business opportunity, with likely others to come.
As a result, Apple has lost the chance to sell millions of Apple TVs and has instead settled for an estimated total of perhaps ~400,000 ±100,000 sold in a 19 month period.
Moreover, the subscription model, which Apple has used so effectively with Mobile Me, Pro Care, and (roughly) AppleCare, is being embarrassingly well exploited by Netflix to maintain healthy revenues. Apple, meanwhile, seems to have failed with the Apple TV to use content to sell hardware (like the iPod business model) because Hollywood is reluctant to let Apple have too many keys to the movie kingdom.
If Apple were in a monstrously profitable venture with the Apple TV, it wouldn't need to partner with anyone. However, my analysis suggests that Netflix is large, seven times larger than Apple's Apple TV venture, enjoying double digit growth and is solidifying itself to be the Internet movie rental company of the future. (Blockbuster is showing no signs of life.) Netflix is outmaneuvering Apple with hustle.
Eventually, DVDs mailed in paper envelopes will go away, and Apple will suddenly find that the Apple TV hobby needs to be retired. That is, unless the company, notorious for going its own way with the Mac and iPhone, can figure out how to bring its strengths to a partnership in the digital living room of the future.
* Netflix may be paying a royalty for each viewing over and above each DVD purchased by them. If so, that would reduce the ratio of 7x somewhat, but I doubt that it would negate the overall argument.
** Viewable only on the Mac -- in the near future -- because no Macs have HDMI/HDCP.
John Martellaro is a senior scientist and author. A former U.S. Air Force officer,he has worked for NASA, White Sands Missile Range, Lockheed Martin Astronautics, the Oak Ridge National Laboratory and Apple Computer. During his five years at Apple, he worked as a Senior Marketing Manager for science and technology, Federal Account Executive, and High Performance Computing Manager. His interests include alpine skiing, SciFi, astronomy, and Perl. John lives in Denver, Colorado.
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Observer Comments
And I thought that you had somewhat of a brain... The restless impatient consumer mentality has consumed you too or is it just that your head has swelled to an unmanageable size?
Do you really think your idea of what Apple is up to (or in this case isn't) means anything? You haven't a clue what's in the works and I for one am glad that your narrow ideas of what and How Apple should do or handle it's development of products and it's business has no resemblance to the reality of Apple. Look at how wrong you've been recently in many cases. There's a reason you don't run a big company... let alone a huge successful one.
In your case John, Patience is a virtue you have to wait for...
QuoteNetflix is definitely the front runner when it comes to eRentals. While they're completely spanking Blockbuster, I wouldn't count Apple out of the running just yet. At least they're not saddled with physical inventory or brick & mortar stores. If paper envelopes do eventually go away, then Apple TV should do fine: they have the right pieces of technology in place, and offer something that Netflix does not.Eventually, DVDs mailed in paper envelopes will go away, and Apple will suddenly find that the Apple TV hobby needs to be retired.
Your assumptions seem to rest on Apple simply not wanting to do business with Netflix just for the sake of not wanting to do so. Apple TV works on OSX. Netflix's DRM scheme is based on Windows. Now that Silverlight is out and Netflix is adopting it, it is possible Netflix will come to Apple TV. It is also possible that Apple really isn't that interested for other reasons.
You've missed or omitted a number of important factors. First, your assumption of how much the average Apple customer rents or buys seems way too high. If your estimate is correct, then you are stating that the average Apple customer spends over $50 per month on video from Apple.
Second, you based retail sales on a sample size of one store. That is likely to be wildly inaccurate. Further on this point, you omitted all non-Apple store sales. The Apple TV can be purchased from Best Buy, Circuit City, online from Apple, online from Amazon, and so forth.
Third, you compare your estimate for hardware/software sales of the Apple TV to the entire revenue of NetFlix. In reality, most of NetFlix's revenue is due to delivery of physical DVDs by mail. That isn't a fair comparison.
Fourth, you state that all the outlets for NetFlix's content, but you don't similarly expand for Apple. So I'll do it. Apple's video content can be viewed on the Apple TV, on PC's, on Macs, on iPhones, on iPod Touches, on iPod Classics, and on iPod Nanos. Omitting the common ground of the PC and the Mac, the number of devices in the market that play Apple content far, far, far exceeds the number of devices that play NetFlix content.
Finally, the content the two services offer is different and largely it doesn't overlap. Apple's content is generally newer and fresher. They also include HD content. NetFlix, on the other hand, is more likely to offer older content. They are adding HD but it isn't available yet. It is unlikely that NetFlix will be able to offer unlimited access to the latest content for no additional fee.
I own both an Apple TV and a Roku. Each has their strengths and weaknesses. The Apple TV does far more than just let you rent videos. I like that it supplies music to the stereo and allows viewing of photo slideshows. The Roku's real benefit is that it gives additional value to my pre-existing NetFlix subscription. I wouldn't subscribe to NetFlix just for the streaming content though.
I download $10-20 worth of video from iTunes each month, none with an Apple TV. I use my iMac to put tv shows on my iPhone, and I use my Mini to download movies to my home tv. When traveling, I download movies to my laptop to avoid the gouging by hotels.
The only difference is that the Apple TV can download HD, while the others cannot. I would be surprised if Apple TVs were used to download much more than half of the videos.
I suspect we will never get a full effort by Apple on AppleTV until the bandwidth problem is solved. First, bandwidth needs to be higher and cheaper, second assurances that any download caps are high enough not to throttle movie downloads are needed. Until these are resolved, Netflix and Apple will always be at the mercy of the ISPs. Apple would be foolish to invest lots of money in AppleTV only to be held hostage for 'pipe fees' by the ISPs down the road.
When this problem is solved, AppleTV will move from a hobby into the 4th leg of Apple's stool. That's the time to assess how well AppleTV is doing.
AppleTV is a Trojan horse that has the potential to achieve many things, and killing Netflix is hardly a priority -- Netflix is probably doomed even in a world without Apple.
Here's how Netflix is better than AppleTV: larger movie library (because they're renting out DVDs), cheaper for the customer.
Here's how AppleTV is better than Netflix: can replace TV at a competitive price (buy shows rather than TiVo them), cost of delivering movies is going to move to zero over time (beyond royalties).
It's obvious why Apple hasn't reached an agreement with Netflix. Any such agreement would be effectively suicidal for Netflix. My guess is almost every AppleTV owner or potential owner, is or has been a Netflix subscriber. If Netflix runs on AppleTV then AppleTV penetration skyrockets and most customers cut back on their Netflix subscription (since even movie buffs probably prefer getting their recent release NOW than their fifth choice in the queue three days from now). As AppleTV penetration grows, studios realize that Apple is paying more per view than Netflix, and more per sale than DVD. Ruh roh. And Apple is doing this at a better margin since it doesn't physically ship DVDs around nor does it have to buy extra copies of popular stuff.
Oh, and with a system update, AppleTV will probably be able to play iPhone games.
Wed Oct 29, 2008 10:56 am Subject: more components
Bah. This idea still involves purchasing yet another box to stick on top of my AV Receiver. Where is the AppleTV that can replace my TiVo AND Netflix? Why is Netflix tying their settop box with BluRay that has so far had a horrible adoption rate because of being pointless without an HD TV (which are still WAY too expensive). Maybe Apple is hanging around for a bit to gather more cash, then they will buy Netflix and TiVo and completely change the game.
The the success or failure of the AppleTV product is an interesting topic, but I'm not sold on the analysis. For starters, I look to myself as to why I haven't bought one. It has nothing to do with Netflix. I find the current product to offer relatively weak HD performance (720p vs. 1080p). The Apple TV needs to be able to handle the bandwidth streams higher than the current product and it needs to have the processing power to decode those streams properly. Currently, it's a weak product.
As to the numbers, others have pointed out similar things, so I won't waste much time on this. Obvious issues with your analysis is that your basis for the numbers is from a casual comment from one Apple store. That's not even actual sales numbers from 1/200 of the target sample. Further, there seems to be complete disregard to the many other sales outlets for the product. Finally, your attempt to extrapolate sales numbers based on the video downloads is more than questionable. Really, you think people download 19+ titles per month. Not likely.
I'm also curious as to why you think a significant portion of Netflix customers would drop their current box in favor of an AppleTV all of a sudden just because it's now compatible. Again, this is not a likely scenario. Apple is fine competing with Netflix directly, I don't see why they would need to offer compatibility. It would be a plus for sure, but hardly a requirement.
Both companies are going to have to deal with bandwidth issues as mentioned by another commenter above. I don't see the bandwidth problem as primarily how much we have, though, but the surcharges for "excessive" use which providers are beginning to add on. Once people buy their blu-ray player with Netflix or their AppleTV and begin downloading/watching movies at the Netflix and Apple charges, and then receive their bills from their internet provider with additional fees because of the size of the files they've received, the proverbial merde will hit the ventilateur.
There are a lot of problems with this article. I'm not even going to get into the AppleTV figures. The big difference is that Netflix said they want to be everywhere. Apple didn't. So far we have Netflix on Windows, a Roku, a BluRay player, on the Mac (announced this week) and on November 19 we'll have it on the XBOX 360. I'm sure it won't stop their either. Where is AppleTV? Well, it's on Apple products. That is AppleTV devices and Macs and iPods and iPhones. That's it and Apple isn't looking to team up with anyone. How about cost? You can have a Netflix account for $9 a month and have all you can eat downloads as well as all you can eat DVDs by mail one at a time. That's a lot of movies. Apple has no subscription. It's $3 or $4 per rental. It's pretty obvious which gives you more content per dollar. With the economy tanking, a $9 all you can eat subscription will be very hard to ignore. Apple will have to combat this with either a subscription of it's own or focus on it's strengths. There is no small portable device for Netflix to play on (yet). Both services however will work on laptops. But probably the single greatest strength Netflix has over every other service is the ability to keep a movie (on DVD) as long as you want. No late fee. Apple as others give you 24 hrs. to watch the downloaded film. That restriction will ultimately doom the AppleTV.
Interesting voodoo numbers, I think you can do better by throwing darts at a dart board.
Anyway, it will be interesting to see the download numbers once Netflicks works on under OSX and I turn my attention to getting it working under the AppleTV as I did for XBMC for Mac. Downloads of the AppleTV installer are currently running at about 1k/day with almost 30k downloads in about 1 month and that's even just the OSX platform version of the installer. I can't wait to see the numbers when the Win32 platform installer is released. I seriously doubt that I'm seeing 10 percent of AppleTV users, more like 1 percent which puts my estimated total AppleTVs at somewhere between 1 to 3 million.
see http://code.google.com/p/atvusb-creator/
I love my AppleTV. I don't care to watch TV shows and movies on my Macs, but I do it all the time on my HD TV in comfort. It's now apart of my life as I also use it for listening to podcasts for news whenever I want, play music through my home stereo, and look at photos. It's really bridged the computer and the TV.
I'm spending a lot of money on iTunes TV shows and movies each month. I bought a 1 TB Time Capsule just to store the videos to get them off of my MacBook.
John, your numbers for Apple TV are based on air and wishes, as far as I can tell. Nothing in them survives even a cursory analysis, as other responders have already pointed out. I'm a former Netflix subscriber and an early Apple TV owner, and I've never regretted the change. Netflix Instant Watch is nice (and better now that it works on Macs) and I could have it by buying a $99 Roku box and re-starting my Netflix subscription at a $9/month level -- but it just isn't worth it. The Netflix subscription will not get me new releases as a downloadable. Netflix has a lot of old movies and TV shows -- but I can now get a lot of that free with Boxee on Apple TV. (See http://code.google.com/p/atvusb-creator/) Hey, I'd like to add Netflix content to what I have now, but it is becoming increasing unnecessary for me to do so. I expect day-and-date parity between Apple T releases and DVD releases soon, and I would not be surprised to see Apple TV access to some free browser-based content (Hulu, CBS.com, etc.) made official eventually without a hack. (Though the atvusbcreator is as easy a hack as one could want...) We might even see a browser on Apple TV capable of handling Netflix's streams -- but that is hardly essential to the Apple TV's survival. I applaud Netflix's efforts, but in the log run I can't see how they can effectively monetize what they have been doing WITHOUT the physical DVD rentals, and that is getting harder and harder to maintain as a profitable venture. The day they have to charge for the downloadables is the day a lot of Netflix subscribers pass on that aspect of the service in favor of free alternatives. I think Apple TV will be the survivor in the long run.
I heartily endorse atvusbcreator. The addition of Boxee (with CBS.com and Hulu content links) got me to finally "hack" my Apple TV with this method -- and an easier and safer hack you may never find. I'm glad to hear you are planning to try bringing Netflix content to Apple TV this way, but that's not a deal-breaker for me wither way. (I used to be a Netfix subscriber pre-Apple TV and I probably would not re-up even at $9 just for the downloadable content.) But that would be a nice option.
Wed Oct 29, 2008 2:53 pm Subject: Apple may want to stay small
Apple is trying to find out just what the well healed consumer wants. Nexflix found out that their consumers want DVDs and lots of them and they figured out a way to deliver them. Through the mail. Apple doesn't even want to get into that business.
Netflix is now offering content via the internet, but even with all those devices supporting their service, it's not a mainstream activity. Not like physical DVDs.
Blu-Ray, XBOX, even laptop movie viewing doesn't come close to standard DVD and channel surfing in terms of the number of people that do it nor the revenues generated.
So Apple is willing to wait and see just what people will want. They have their Apple TV that allows them to experiment, but their model is to go feature-lite but be usability-rich. I'll bet they're not happy with the product as it is, but they're not sure what it should be. They're still trying to find out what consumers will put up with.
I have a great HDTV, a good sound system, and HD cable. I don't rent from netflix or Apple. I have an upconverting DVD player that plays the $0.99USD DVDs rented from the drug store. I've never purchased a movie "on-demand" or on DVD for that matter, and I've always got stuff to watch on my DVR.
MY anecdotal evidence says I'm not typical when it comes to the DVR but that's about it. I do know a few people who use netflix but they are true movie buffs.
So from what *I* can tell nothing has replaced DVD and cable/dish/antenna TV viewing. Everything else, from blu-ray on down is a hobby and I applaud Jobs for saying so.
Careful. By saying "...by Mr. Job's admission..." many will think your use of the phrase "dismal hobby" is an SJ quote. It's not. He never used the word dismal. That's your personal feeling about hobbies - not SJs.
I've never ever used Netflix and simply got out of the habit of renting videos back when they were on VHS. DVDs were cheap enough to buy. Only since using the Apple TV did our household begin again to rent movies we missed at the theatres, and my DVD purchases have dwindled to a trickle. I hope to keep it that way.
We love accessing all our iTunes content on the living room TV- including movies, TV, podcasts, music, YouTube and photos - Netflix offers that?
We love taking our content with us on our iPods/iPhones when we travel - Movies, podcasts, music, TV shows for the plane rides and hotel rooms - Netflix offers that too?
We love renting movies again, and now HD ones! - no trips to Blockbuster, rewinding, returning, and no waiting for a movie to be mailed to us - Netflix offers that as well?
The Apple TV is a central hub of our digital media world, and I wouldn't even consider Netflix as a replacement for that.
I suspect like the Mini, the next hardware upgrade will yield the answers.... If the new video hardware includes the ability to do .264 like the new laptops then, you will see games.
Either way, Jobs really isn't into the iTV and it shows. He likes the iPhone, Laptops and one day being the CEO of Disney!
Finally, I have learnt some time ago there is a thing called signal to noise ration. If they put lots into iTV, it takes away from iPhone or the other mega making money streams they have.
Enjoy, but don't bash me personally, bash my opinions.
I'm still disenchated with the AppleTV because they use the same apple remote. With all of the talent at apple, they can find a more useable system that has more of the grace of an iPod--Like the Loop or Vudu remote. Simple is not bad, but 6 buttons isn't enough to be the sole input for a computer-like device. Going through long lists is hit or miss, and entering text is painful. Content and content pricing aside, Apple needs to leapfrog its competitors in user experience to distinguish itself from hobby status.
Wed Oct 29, 2008 3:50 pm Subject: Jobs really isn't into the iTV and it shows...?
QuoteActually, that is iTunes' role. IPods, iPhones, & Apple TV are really extensions of the hub. Even so, that's a role Netflix can't fill with what they have to offer.YodaMac wrote:
The Apple TV is a central hub of our digital media world, and I wouldn't even consider Netflix as a replacement for that.
One of the good things about Apple TV is that it's pretty much international. Netflix isn't here in Australia. There is a similar company but they don't have the market penetration that Netflix does. I can buy and rent movies from iTunes, not on the scale of the US store, but growing rapidly all the time.
Apple TV still hasn't found its groove, but I sure hope it does because I have thousands of hours invested in my iTunes library, and this box is the killer hardware to go along with that. I believe Apple will take over the living room, but they have yet to completely sew up the concept. Once they get a bit more attention to spare on it, they could get it out of "hobby mode" and we'll see some stunning progress
"Apple continues to regard Apple TV as a hobby and has curiously failed, so far, to secure an agreement with Netflix."
Even if Apple wanted to distribute Netflix's content, there are serious legal hurdles which are unlikely to be resolved any time soon.
The studios have been playing hard-ball with Apple for some time. Their licensing agreements with Netflix almost certainly give them control over whom Netflix can sub-license too.
QuoteI am a Mac diehard but skipped AppleTV. I use the XBOX 360 with my Mac. It does everything you can do with the AppleTV and much more. In addition to seeing pictures, listening to music and watching content off my Mac (HD podcasts look fantastic!) it also plays DVDs, plays online games and will now offer HD movies from NetFlix. Completely and utterly awesome!YodaMac wrote:
Careful.The Apple TV is a central hub of our digital media world, and I wouldn't even consider Netflix as a replacement for that.
The 60GB XBOX 360 Pro+Lego Indiana Jones & Kung-Fu Panda. $299.
http://www.bestbuy.com/site/olspage.jsp?skuId=8928814&type=product&id=1215818957702
QuoteFlipFriddle wrote:
Bah. This idea still involves purchasing yet another box to stick on top of my AV Receiver. Where is the AppleTV that can replace my TiVo AND Netflix?
Right in front of your eyes. The Netflix part is obvious. The TiVO isn't so apparent but will be in the medium term: Why bother recording when your can stream or download from the source on demand?
Quote...without an HD TV (which are still WAY too expensive).
Small HD sets (15"-17") start in the low $200s. Is that too expensive?
QuoteGuest wrote:
I am a Mac diehard but skipped AppleTV. I use the XBOX 360 with my Mac. It does everything you can do with the AppleTV and much more.
It's true! For example, the Apple TV can't fill your room with the white noise of a cooling fan. It can't display the red ring of death. It can't heat your room year round. And it can't occupy your spare time with the effort to understand its remote control. It can't occupy a lot of otherwise empty space.
Yep, Xbox 360 can do so much more.
QuoteFlipFriddle wrote:
Maybe Apple is hanging around for a bit to gather more cash, then they will buy Netflix and TiVo and completely change the game.
Dude, Apple doesn't need to gather more cash to buy Netflix. It could buy Netflix with spare change. Apple has $25 billion in cash and no debt. Netflix's total market capitalization is a mere $1.3 billion.
[quote="Anonymous"]
QuoteNever had a single problem with it. It's not loud at all. Hasn't had the Red ring of death and doesn't heat the room. My Harmony remote works perfectly with it.Guest wrote:
For example, the Apple TV can't fill your room with the white noise of a cooling fan. It can't display the red ring of death. It can't heat your room year round. And it can't occupy your spare time with the effort to understand its remote control. It can't occupy a lot of otherwise empty space.
QuoteGuest wrote:
I find the current product to offer relatively weak HD performance (720p vs. 1080p).
No, Apple TV's HD is excellent. Keep in mind that 720p is an excellent choice for downloadable video given current broadband bandwidth and the fact that a large proportion of the installed base of HD sets have a native display capability of 720p.
Hold out all you want. I suspect you'll be waiting along time for downloadable 1080p media.
Quoteskellener wrote:
Where is AppleTV? Well, it's on Apple products.
No. Apple TV is a device. It can be attached to any HDTV (and some SDTVs) and can sync (if so desired) with any Mac or Windows PC running iTunes.
QuoteHow about cost? You can have a Netflix account for $9 a month and have all you can eat downloads as well as all you can eat DVDs by mail one at a time. That's a lot of movies. Apple has no subscription. It's $3 or $4 per rental.
What?
First, Apple TV is very useful and rewarding even without movie rentals or purchases.
Second, You've left a lot out in your description of Netflix's $9/month plan: you can only possess one DVD at a time, i.e. you don't get the next one until Netflix receives your old rental, and the streaming offer provides a very limited selection of movies in low quality formats. In order to watch the latter on