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Posted at 06:00 AM ET, 10/25/2011

Netflix, Apple and the rocky road to living room innovation


Children watch television in the living room of an apartment in New York in this January 13, 2011 file photo. (LUCAS JACKSON - REUTERS)

If you haven’t heard, there’s a war on for your living room — a potential revolution that could have you tossing your current TV for yet another Apple product. That’s if (some would say it’s a guaranteed “when”) one of Steve Jobs’s final breakthroughs — an “integrated television set that is completely easy to use” — makes it to market.

In the meantime, Netflix is fighting back a painful, but relatively rapid decline. The company reportedly lost 810,000 subscribers and the stock responded accordingly, dropping more than 26 percent in after-hours trading.

Netflix is struggling with a decline in not only its users, but its streaming library offerings. Meanwhile, Blockbuster, which was bowled over by Netflix’s meteoric rise, has found its window of opportunity for a potential comeback. The company offers an on-demand service and has married the Netflix model of movies-by-mail with what’s left of its storefronts to get rid of Blockbuster members’ chief, pre-Netflix gripe: late fees. Blockbuster also offers games-by-mail, marrying the Netflix model with popular video game rental service Gamefly. The Blockbuster Web site even features a banner highlighting the Netflix price increase.

The Conversation

" What would you do to get Netflix back on track? "

Meanwhile, Netflix is in the process of taking its service to the United Kingdom and Ireland in the coming year, according to a Monday AP report. Blockbuster will undoubtedly work diligently to fill the void Netflix appears to be leaving in the U.S., but talk of Steve Jobs’s television breakthrough could turn the marketplace on its head. After all, iTunes offers movies, music and games.

Among the features an Apple television could include are voice-activated search and seamless content sharing across Apple devices via iCloud. The television would also be all but guaranteed to run on iOS. It would be one of the final frontiers for a company that has re-engineered the computer, the phone and the touch-screen tablet.

The history of living-room media innovation is littered with high-profile failures.Where those innovations have fallen short, gaming systems such as Sony’s PlayStation and Microsofts X-Box have attempted to fill the void by offering a conduit for streaming services such as Netflix and Hulu. However, particularly in Sony’s case, security failures have stymied progress. It remains to be seen whether Apple will go beyond Apple TV, which Jobs casually called “a hobby,” and revolutionize television, just as we have yet to see if millions of Netflix users will start frequenting Blockbuster stores again.

— The war is on for control of your television. While Apple may have a new TV in the works, Netflix is struggling. What would you do to get Netflix back on track?

Read more news and ideas on Innovations:

Netflix to provide online service to UK, Ireland next year

Netflix loses 810,000 subscribers; stock plunges

Apple TV, Google TV could be headed for a showdown

By  |  06:00 AM ET, 10/25/2011

Categories:  Morning Read, Business, Invention, Morning Read, Technology

 
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