Today, as new boxes and services are announced, there has yet to appear one that can give you every movie, let alone a single format you can use on your various everyday devices. Thankfully, what we're hearing now is that while this infinite format war may not go on forever, the state of video will suck for the next five years until every service has the same baseline catalog. If you believe the studios. In the meantime, you'll be looking for the set-top box with the best catalog, and the one that can deliver you your films in the best way possible.

If you thought the HD DVD/Blu-ray split was bad, at least there was an easy order to it, an alignment by studios. Warner, Universal and Paramount were on HD DVD, everyone else (plus Warner) put their movies on Blu-ray. Sure, no Big Lebowski on Blu-ray, but at least you knew why. There is nothing even approaching logic when it comes to the movie options from VOD set-top box to the next, at least not from the user perspective. Warner Bros. put out Ocean's Thirteen. You can watch it on Vudu and Amazon Unbox, but not iTunes. Warner also put out I Am Legend, which is on all three, and Xbox Live Marketplace. Paramount's Shooter is on all three, but only for purchase, not rental (and totally MIA from Xbox). And you could rent Disney/Pixar's Ratatouille a few months ago, but now it's only for purchase. "WTF?" is a natural response. (On a side note, it's a bitch to really search or go through any of the catalogs, so it's even harder to tell if it's an accidental or intentional roadblock.)

To explain our current clusterfuck, you need a quick trip back to 1999. Remember the state of digital music back then? It was messy and ugly. The music industry had no idea what to do with this whole internet thing, and they were involved in assorted, competing ventures. Then along came iTunes, which basically organized the music universe and, to the chagrin of the RIAA, set up a sane pricing structure, too. It's not a complete catalog of all music ever (Beatles, hello?), but it's the closest thing there is, and it's pretty damn good. It brought order to the chaos, and now claims 85 percent of the legal download market. So it has the music industry by the balls, enough to speed their efforts to fortify a worthy number 2—Amazon, which was the first store to boast a catalog exclusively made up of DRM-free music from all four majors as a result, a perk deliberately withheld from iTunes to curb its power.

We're basically at that same, nebulous 1999 point with video, though Hollywood has learned from the music industry's mistakes—and iTunes is not the guaranteed champion in the case of online movie sales. The industry is eagerly putting stuff out there, and on as many services as it can—we're at the point now that most of the major studios release movies on online services on the same day they release them on disc.

A problem gumming up our dream of the one box is that each service requires a different format—one studio told us that a big issue is digitizing and formatting a film to meet each service's specs. It just takes time, though they're going as fast as they can. And new releases are gonna take priority, obviously. We are at least a little skeptical of this claim—we don't think it takes that long to digitize a flick

From what we were told, there's surprisingly little worry of a single company dominating digital distribution. A studio we talked to said that it's all so new, the fear of a monopoly (by Apple or otherwise) is at worst simply a thought skulking around in the back of their mind, not an actual concern. So no service is getting any favors to promote one over the other, or keep another in check. (At least not yet, though Blu-ray-happy Sony may well have the most incentive to keep the online space anemic.) Again, here, we're a little suspicious—obviously they wouldn't come right out and tell us they're afraid of iTunes, but when you look at the measly catalog and consider the studios' close study of how the music industry complete botched online music, the idea of Apple becoming the single biggest distributor of most digital media and holding serious sway over the entire entertainment industry has to weigh on their minds.

I mean, if you were in their shoes, and could prevent making iTunes into the all-powerful Walmart of the digital video generation, wouldn't you?

The one bit of protectionism going on that was copped to is the push to purchase, rather than rent. It makes sense that a studio gets more money when you buy a movie than rent it, since it's the same set of bits headed to your hard drive, and both are guaranteed you'll watch the movie at least once, but one costs three to four times as much as the other. So you are going to see a lot of them not open a flick up to online rentals until a month after it's available for purchase, and even see rental options disappear, as recently happened across the board with Pixar movies.

Ultimately, and somewhat shockingly, Hollywood does have the same vision we do—a single god box that'll deliver the entire catalogs of all the studios. Only, unlike in the iTunes hegemony, every home could have a different god box, be it Xbox, TiVo, Vudu or Roku.

Forgive the buried service journalism. Enough of this theoretical talk. So, what does it take to get a decent download collection? Until the god box, you will need several, two at least. Right now, Vudu is good for latest and greatest plus some older favorites; Netflix Roku has better TV options and some interesting deep cuts (plus a $99 box price and unlimited streaming for 10,000 so-so titles for any plan over $9 with discs by mail as a backup); Xbox 360 has a surprisingly large amount of HD movies, and a nice catalog geared towards the gaming demographic; Apple TV has its own legion of fans for its ability to move movies to iPods and computers, though it still has a lot to prove in the catalog section. That's not even counting the TiVo with Amazon Unbox or the cable box you likely already have, each with their own assorted VOD options. Even if you owned all of 'em, you still might not find what you want, even if it's something that should be slapping you in the face. Take Harold and Kumar Go to White Castle, for instance. We could not legally find it on any service, even though the sequel hit theaters just a few weeks ago—and got a surprisingly good buzz from usually snooty critics. Did Warner miss the perfect opportunity? They wouldn't say.

The other major issue is the state of broadband and the guys controlling the pipes. For the online video revolution to fully take off in HD, we need bigger pipes. For most people, that's years away. This is deeply threatening to the cable companies, and they're pretty clear that they're not happy about content moving online—you can see the fear in the recent moves to limit all kinds of data consumption (most of which is already video), not just the supposed protocol of pirates. What if limits or overage charges were put in place for people who were simply doing their best to buy copyrighted video? Why would someone give up DVD and Blu-ray rentals from Netflix in order to pay twice—for both the bandwidth and the content—and have to wait somewhat impatiently for the download, too?

So friends, while all of this gets ironed out, the infinite format war rages on: Lots of boxes, lots of online services, none of them complete, none of them that'll fully satisfy your wife's desire to rid the shelves of DVDs. Hollywood just can't move fast enough for this revolution, as arguably eager as it is, and the ISPs may not clear the way when the show does get on the road. From what we can tell, the stuff will all get sorted out in time. How much time? Give it five more years. If you believe the studios. [Insert groan of impatience here.]

Install
You boot up the box, set the network to wireless or Ethernet connectivity. You get a five digit code, head over to netflix.com/activate using a browser on a PC or other device, log into your Netflix account and enter the code. The Roku box gets your queue and the movie/show cover art. There are HDMI and optical connections on top of the standard video outs, but those cables are not included.

Using
The box itself doesn't have menus. No, instead, you use Netflix's brilliant website to load up your queue. You just use the remote to scan through your instant viewing queue (now separate from the disc queue) select a movie and play. It starts streaming. (Remember, there's no download/purchase program here and the device has no HDD, just 64MB of buffer.) The box is completely quiet, again, due to its fanless design. Movies stream in at different VC-1 bitrates of 500kbps, 1Mbps, 1.6Mbps and 2.2Mbps, depending on connection speed. Quality is not great, even at 2.2 Mbps, but I'm happy enough considering viewing is instantaneous. Note: Unlike Apple TV, scrolling between cover art is not done in an animated way. HDMI res is 480p, while all the other outputs are 480i. Fast forwarding is handled by key-framing movie content every 10 seconds, so you can FF to parts of the movie that haven't been downloaded yet, at three speeds. Once you hit play, the movie buffers for a few seconds and resumes. Speaking of resuming, the player itself does remember where you left off last in a movie and will continue playing from that point. One nice touch: You can score movies from the movie detail page. One bad thing: You can't search the Netflix website specifically for instant titles.

Choices
While appearing to have double the collection of Apple TV or Vudu, what do you get in Netflix's 10,000 movie collection? Basically, you get a lot of back catalog (classic movies) and a lot of TV shows (unheard of in rental situations!) right as they hit the market. But you don't get the same blockbusters on day one release that you'd get from Apple TV or Vudu. That makes the Netflix box and disc system a great supplement to those systems, which seem to specialize in new releases. (Kudos to Saul from the NYTimes for discovering this initially.) The business model behind a flat rate unlimited streaming system is unheard of. Sure, they're taking a lot of older content, which is inherently cheaper. But think of it this way: For a nine-dollar-a-month account, you can hold off on buying older DVDs or watching TV shows. A box set of Ghost in the Shell or 30 Rock costs over 50 bucks on DVD or by renting individual downloads, but you can stream many of these episodes for nine bucks a month. Buying the Karate Kid, an old movie not on many download services, costs a few bucks on DVD, but I can just watch it whenever I want as long as I'm a Netflix customer. (And consider that the number of great back catalog titles like that will probably outpace new releases you'd find on Vudu or Apple TV.) It's basically the same as Netflix's current model, but instead of being limited by the postal service, you're limited by your spare time and interest in older titles. (And don't forget Netflix's disc-by-mail service, which still covers new titles.)

The Future
Netflix is planning HD streaming, and this box will support it. When Netflix gets HD streaming content, they'll update the box by firmware to support HD resolutions at higher bitrates of 4-6mbps, including 5.1 surround (everything is stereo now). The menus will also be upgraded to HD res, too. In the future, the Roku-branded box will be upgraded to accept non-Netflix content, too. (And btw, the update on the Mac client situation is that they're just trying to sort out the DRM issues, or lack of a suitable system they can stream to Macs on.)

The box will be sold on Roku's website directly. Worth buying if you're a Netflix customer (or thinking of becoming a Netflix customer) and can find enough titles for Instant Viewing on their site. [Roku and Netflix]

NETFLIX TEAMS WITH STREAMING MEDIA INNOVATOR ROKU ON PLAYER
THAT INSTANTLY STREAMS
MOVIES FROM NETFLIX DIRECTLY TO THE TV

Priced at Just $99.99 and Available Starting Today,
The Netflix Player by Roku™ is Compact,
Easy to Set Up and Intuitive to Use



LOS GATOS and SARATOGA, Calif., May 20, 2008 - Netflix, Inc. (Nasdaq: NFLX), the world's
largest online movie rental service, and Roku, Inc., an innovator in digital media streaming
technology, today announced the introduction of The Netflix Player by Roku™, a device that
enables Netflix subscribers to instantly stream a growing library of movies and TV episodes from
Netflix directly to the TV. Priced at just $99.99, the player is available for purchase starting today at
www.roku.com/netflixplayer.

The player is simple to install, easy to use and gives Netflix members instant access to more than
10,000 movies and TV episodes.

"We're excited to bring the first Netflix ready device to the market, " said Anthony Wood, CEO and
founder of Roku. "The seamless integration of the Netflix service into our player has resulted in
true ease of use for the consumer. Now, streaming video isn't limited to people sitting in front of
the PC; it's ready for the TV in the living room."

"The key breakthroughs of The Netflix Player by Roku are simplicity and cost," said Reed Hastings,
chairman and CEO of Netflix. "First, it allows consumers to use the full power of the Netflix Web
site to choose movies for their instant Queue, and then automatically displays only those choices
on the TV screen. That's a major improvement versus the clutter of trying to choose from 10,000
films on the TV. Second, there are no

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extra charges and no viewing restrictions. For a one-time purchase of $99, Netflix members can
watch as much as they want and as often as they want without paying more or impacting the
number of DVDs they receive."
About The Netflix Player by Roku
The Netflix Player by Roku is surprisingly compact - roughly the size of a paperback book - and
can integrate easily into any home entertainment system. All it takes is connecting the player to a
TV and to the Internet. For homes with wireless Internet connectivity, the player is Wi-Fi enabled
and offers the ultimate in placement flexibility.

From the Netflix Web site, members simply add movies and TV episodes to their individual instant
Queues, and those choices are then displayed on the TV and available to watch instantly. With
the player's accompanying remote control, members can browse and make selections right on
the TV screen and also have the ability to read synopses and rate movies. In addition, they have
the option of fast-forwarding and rewinding the video stream via the remote. In all, the Queue-
based user interface creates a highly personalized experience that puts members in control.

Additional features of the product include optimization of the Netflix video streaming technology,
which eliminates the need for a hard disk drive associated with video downloads, and built-in
connectivity for automatic software upgrades, which will keep the device current with service
enhancements.
Technical Details
In the Box
• The Netflix Player by Roku set-top box (approximately 5"W x 5"D x 2"H)
• Remote control (including 2 AAA batteries)
• A/V Cable (Yellow/Red/White RCA)
• Power Adapter
• Getting Started Guide

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Video and Audio Connections
• HDMI
• Component Video
• S-Video
• Composite Video
• Digital Optical Audio
• Analog Stereo Audio
Network Connections
• Wired Ethernet
• Wi-Fi (802.11 b/g)