I travel for work. I love Netflix but getting the physical media doesn’t work well for me because I will be home maybe a couple days a week. Their Watch Now service is horrible. Let’s ignore the lack of content, it’s non-existant.

The problem with Netflix’s Watch It Now service is the type of thing that’s described above. For me, the biggest hurdle is that you have to be online. As I said, I travel. I often don’t have wifi access. I do have 3G, but that’s not fast enough to stream a movie and finding a good signal can be a problem in and of itself. I also have an ultraportable that doesn’t have an optical drive. I don’t need one for anything. So that rules out a physical DVD anyway.

I also can’t use it on my Mac which makes it worthless when I am at home.

It’s crippled by Microsoft DRM, the same problem with pretty much all online movie rental services.

iTunes fills that void. I can download when I’m on a broadband connection. Take it with me anywhere. There is no need for optical media. I can use it on both my work PC and my home MacBook Pro.

Seems like the perfect solution, especially as described above. The concept is sound, simple, and familiar to people. You rent a movie, take it home, and return it. I’ve been doing that since 1983 when I rented my first VHS.

One-time rentals for a fixed fee per each use require exploding media, though.

The whole point of a Netflix-style system, where you pay a subscription fee to load up a fixed number of available “slots” is that the media doesn’t need to have a limit on the number of times it can be played, or how long you can keep it. As long as you keep paying the subscription fee, you can keep and watch a movie or show you’ve loaded into one of your slots.

Of course, if you stop paying the subscription you’re not going to be able to watch the downloads.

If the fee is low enough for one slot, though, it can be used practically like a pay-per-use system. Say it’s $10 for one slot, for one month. So you pay $10, use it to watch 4 movies, and then cancel before the end of the month. That’s equivalent to $2.50/movie, but none of them had any restrictions on how many times you could watch them, or how much time you had to watch them before they expired, as long as you did it before you canceled the service.

I is shoehorning the limitations of physical media distribution onto digital media.

With Netflix you need the physical disk to watch it because it needs to go into your DVD player. Netflix therefore has to limit the number of disks you can keep at any one time so you don’t hoard them all. Thus taking away the availability of an actual physical disk that then can’t be posted to someone else.

This is digital downloads we are talking about. There is no need to limit the number of downloads you can make. Because there is no physical disk to distribute between customers. We can all rent the same thing at the same time since there is no limitation on digital copying.

Isn’t iTunes a success because each purchase by itself can be seen as an impulse buy. “bah, it’s only 99c for the song, just buy it you fool” goes off in my head a lot before buying a song. This is why iTunes is a success, IMHO. And Apple would better serve itself by sticking to this winning formula with rentals. “bah its only $2.99 to hire, if I don’t like it I’ll just delete it and download another as I don’t even have to return the disk to the store or post it back to Netflix”.

Netflix’s business model is born out of the necessity of physical disk distribution no need for iTunes to replicate that model.

Another problem with this proposed model is that the studios would have to agree to it. I don’t think they are going to want to share subscription revenue. They’ll want their full cut of each download. Which means Apple will be going backwards pretty quick if people have 4 slots that they continuously churn through. Netflix doesn’t have to play a cut to the studios each time you get a DVD from them because they have paid upfront for the right to rent the DVD.

“In terms of rental music / try before you buy there is a simple solution to this moronic idea – put full length, low quality tracks on the iTS site so you can listen to the WHOLE song instead of the crappy 30 second sample. 30 second previews are so stupid.”

A low quality version of the song isn’t going to compel people to buy it, though. They’ll either think “that song sucks” if they haven’t heard it before, or “I’m not going to buy that here, the sound quality stinks.”

Feel free to open your own digital downloads store with full length, low quality previews of all the tracks available, though. I’m sure we’re all eager to hear of your success against the iTunes Store.

“When it comes to movies, I’m absolutely shocked that people will pay to purchase movies and television shows. I mean really, how many times can you watch the second season of the Sopranos?”

It costs $10-12 for one person to go out to the movies, now (don’t forget to add in the ridiculous price of snax at the concessions stand). For two people that’s easily a $35 evening. A movie rental might be $3. If you really like a film you might rent it more than once, so that would go up to $6 or $9, etc. Older films can now be had on DVD for as little as $10 or less, so the economics of buying a favorite older film certainly make sense. It especially works once you’ve built up a library of titles and you get to choose between taking the time to go out to the rental store and finding/agreeing on something to watch, or just picking something you have on hand to re-watch that you know you like.

At $15 to $20 for a DVD, it’s still cheaper than going out to the movies for two people, and while you don’t get the big screen experience, the films that are now out on DVD aren’t generally still going to be in theatres, anyway. Plus for recent films the rental store may not have a copy available for rent. Your local big box store is pretty much guaranteed to have the most recent DVDs available for purchase.

As for TV shows, it’s kind of awkward to rent one disc of 3 or 4 episodes at a time. Then you have to bring it back and hope the next disc is available. Or you could rent two discs, but that’s 6 to 8 hours worth of content, and are you going to watch that all within the three day rental period? Yes, Netflix scores a major win, here, with TV show rentals, since you keep each disc as long as you like.

Back to the economics, a four-disc TV show might cost $8 or $12 total to rent locally, but it’s not very convenient, and you might wind up with late fees, or have to re-rent some of the discs because you didn’t finish watching them. You might be able to buy that season for $30 to $40, which is significantly more. You’ll get 12 to 24 hours (or more, with bonuses) of content, though. The base price compares very favorably with two people going out to a movie, however, and you get a lot more total entertainment time out of it.

$30 to $40 also compares reasonably well with a month’s cable subscription. So if you don’t subscribe to cable because you don’t watch that much TV, yet there are just a few shows you’d really like to watch, a $30-40 box set of a TV show is perfectly reasonable. Plus you don’t have to deal with commercials, and you can watch it on your schedule (including immediately watching the next episode after a cliff-hanger, instead of waiting a week).

Another factor is the “Oh, you haven’t seen (movie X, or TV show Y)? I’ve got it on DVD, we can get together and watch it!” social experience. You personally may not think of re-watching a particular movie or TV show multiple times on your own, but you’d be interested in re-watching it with someone who hasn’t seen it.

You can have a personal library of movies and shows that fall in this category, and it both eliminates the hunting down of those titles at a rental store, and filters the available options so you aren’t presented with a paradox of choice. Along those lines, how many Netflix subscribers rip and burn the titles they rent so they can do this later?

Finally, buying a tangible physical good means that you have something you could potentially re-sell later. The difference between your original buying price and your selling price might only be as much as the cost of renting the same movie twice.