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Google's New Device: Boon for Netflix, Trouble for Apple?

Can somebody remind me why, exactly, I need my Blu-ray player anymore?

After all, over the past few months, save an occasional trip to the Redbox down the road, I can count on one hand the number of times I've actually grabbed a physical disc from our dusty collection of Blu-ray and DVDs.

Oh, wait! We still use the Blu-ray player to access my streaming Netflix (NASDAQ: NFLX  ) account, rent movies and shows from Amazon Prime, and listen to Pandora as we roam around the house.

Then again, while the extra features and superb audio and video of physical discs are nice, I'd venture to say 99% of what my family watches at home involves streaming content from the web.

Enter Chromecast, Google's (NASDAQ: GOOGL  ) slick new HDMI-enabled dongle which allows streaming videos, music, photos, and web content wirelessly to your TV from Wi-Fi-enabled devices including Android smartphones and tablets, anything sporting Google's Chrome web browser, and Apple's (NASDAQ: AAPL  ) iPhone, iPad, and iPod devices.

Image source: Google.

For now, however, Chromecast works only with Netflix, YouTube, Google Play, and Chrome, but Google has already indicated there will be more to come as the device "automatically updates to work with a growing number of apps." True to form, Google also touts Chromecast's simplicity with a promotional video:

Better yet, Chromecast costs just $35, and those who purchase now also get three free months of Netflix's streaming service. If you back out the $7.99 monthly cost of a streaming Netflix subscription, new subscribers are technically only paying around $11 bucks for their neat new toy from Google. 

And considering Netflix fell nearly 4% Wednesday after it disappointed analysts by gaining "only" 630,000 new subscribers last quarter, you can bet the King of Streaming certainly doesn't mind the added publicity from this partnership. In fact, even for existing Netflix subscribers, Chromecast's low cost should also serve to make Netflix's streaming offerings that much stickier.

For every winner, there also must be...
But while Chromecast could be a boon for Netflix, where does that leave competing hardware offerings from the likes of Apple (NASDAQ: AAPL  ) ?

Remember, Apple TV offers similar functionality, currently retails for nearly three times as much at $99, and requires consumers also purchase an HDMI cable to plug it into their televisions.

Sure, you say, but Apple TV also comes with a remote and already works with Netflix, Hulu, HBO Go, iTunes, Pandora, YouTube, and a number of sports stations. You'd be right on all counts, but that still hasn't exactly evoked that much of a "gotta have it" emotion for Apple TV with consumers so far.

Besides, Chromecast's current content offerings should be more than enough to keep most folks busy until Google expands its reach.

I'll admit Apple certainly doesn't rely on Apple TV to sustain its thriving business, and that's not to say the folks at Cupertino won't come out and stun the world with some amazing new Apple TV-esque product we simply cannot live without. But what happens if one of the awesome new products CEO Tim Cook keeps promising we'll see over next year ends up being anything close to Google's Chromecast? In that case, you can bet Google will be more than happy to relish in its advantage as an innovative first-mover in the space.

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Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 25, 2013, at 9:00 PM, twolf2919 wrote:

    You malign Apple TV for requiring a $2 HDMI cable to function, but don't seem to notice that the Chomecast requires a $200+ device to make it do anything.

    Functionally they're also anything but "similar". The Apple TV delivers many more content options and iOS devices can stream/mirror any content to it - including what is on the devices (e.g. purchased music and video). Chromecast can only receive web content.

    Chromecast's only advantage (other than price) is that it will work with any device, whereas Apple TV will only work with iOS devices.

    Finally, you say ..."but that still hasn't exactly evoked that much of a "gotta have it" emotion for Apple TV with consumers so far..." - by what measure? Apple TV is the best-selling set-top streaming box in the world (Roku is #2). I think people who have other Apple devices in their house certainly have that "gotta have it" emotion, once they know what Apple TV can do. Perhaps on Google's second try, they're generating that same "gotta have it" moment with the Android crowd. Too early to tell.

  • Report this Comment On July 25, 2013, at 10:49 PM, ScottAtlanta wrote:

    Great Ad: "For Everyone."

    That kinda nails why Google will come out on top and Apple will sink.

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