A ludicrous rumor making the rounds this week claims that Netflix (NASDAQ:NFLX) is readying a streaming application for Apple's (NASDAQ:AAPL) App Store. Before long, the chatter goes, Netflix subscribers will be able to stream flicks and television shows through their iPhones at no additional cost.
However sexy it may sound, the story fails at every turn.
Apple and AT&T (NYSE:T) are being vilified for shutting down apps that compete with their own in-house services. A third-party tethering program and Google's (NASDAQ:GOOG) Voice have been snuffed out. Do you really believe that Apple would allow Netflix subscribers to watch streaming movies or TV shows for free, when it could make money selling or renting those files on iTunes? Do you think AT&T would dare to congest its already-sluggish network with chunky media files?
There are workarounds, of course. Netflix could only offer some streams, as it does through Microsoft's (NASDAQ:MSFT) Xbox 360. AT&T could also restrict Netflix streaming to Wi-Fi connections, passing the bandwidth buck.
Would such a service still be worth it? For an iPhone owner on the go, limiting streams to Wi-Fi boxes the user into stationary sessions within a router's range. Whether at home or at the office, there are probably better streaming gadgets than iPhones, with their puny screens.
This could also be problematic for the iPhone's battery life. There's a big difference between streaming a two-minute clip on Google's YouTube and watching a two-hour flick. I also can't fathom watching a full-length feature on a tiny iPhone or a Wi-Fi-equipped iPod touch. Then again, Sony (NYSE:SNE) has been selling theatrical flicks for its PSP device for years. So has Apple, for the iPod.
Don't assume that a streaming partnership between Apple and Netflix will never happen. If rumors of an Apple tablet device are true, adding Netflix streams would be a great way for Apple to turn the heads of multimedia aficionados, after alienating them with its ho-hum Apple TV.
However, I'm not expecting to stream my Netflix digital library from my iPhone anytime soon. Neither should you.
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