The week after Amazon.com (NASDAQ:AMZN) started allowing Prime subscribers to download Prime Instant videos to their devices, Netflix (NASDAQ:NFLX) came out and defended its position not to allow its subscribers to do the same. The reasoning: Downloading content is too challenging for users.
That was the excuse Netflix product head Neil Hunt gave Gizmodo UK, explaining that adding choices and complexity leads to people not taking action. Nonetheless, he admitted that subscribers want "the ability to consume anywhere they happen to be." But if you're in a plane, a subway, or just some public place with no access to the Internet, you don't have access to Netflix's library. It's those situations that prompted Amazon to act, but Netflix wants to do something else.
The real reason Netflix won't let you download content
Hunt cites the "paradox of choice" as the reason Netflix won't offer subscribers the option to download content. The paradox of choice is the idea that when a user is presented with more options, the choice becomes increasingly difficult. He notes that when Netflix enabled viewers to rate movies and TV shows with half-star steps, total ratings went down 11%.
And the reduction of choices users have to make can be seen within Netflix's operations over the past few years. It's improving recommendations while reducing its total library, focusing instead on curation and original content.
The choice with downloading content for a future plane or subway ride is which movie or show to download. And that's a choice that could certainly cause some users to give up. But if you look at other forms of media -- such as podcasts and music -- the ability to save files to the device is standard for streaming services. Granted, music and spoken-word files take up significantly less memory on a device, but the point is people are fully capable of deciding what's worth saving to their device, especially for the next three or eight hours.
Tablet owners can save about five hours of high-quality Amazon Prime Instant video to their device using about 9 GB of memory. If they're short on space or using a smartphone (where the smaller screen doesn't require as high of a bitrate), that same amount of video can be downloaded at a lower quality with just 3 GB of memory.
To that end, it still requires some planning for most tablet and smartphone owners to clear that much space from their devices, and Hunt believes that task is too challenging for most users to use a download feature. " ... I’m just not sure people are actually that compelled to do that, and that it’s worth providing that level of complexity," he told Gizmodo. Still, it's not as if those users are going to stream less content because they can download now if they make the effort. The paradox-of-choice argument simply makes no sense.
Considering Amazon is quiet about everything it does, we're unlikely to receive any meaningful data on Amazon Prime Instant Video downloads. That's true if the results are good, and especially true if they're bad, and Netflix still hasn't made the move to allow subscribers to download content.
What is Netflix doing for subscribers then
Netflix continues to push its open-connect servers, which store all of Netflix's content within a small-footprint device. Its initial push was to get Internet providers to place them at exchange points to reduce the bandwidth necessary to transmit Netflix to all of its customers at prime time.
Hunt thinks that those servers could be placed on planes as a supplement or replacement to current in-flight entertainment. That would solve the problem of limited bandwidth on a plane, which prevents current airline Wi-Fi systems from streaming video from Netflix and Amazon.
Additionally, Netflix is working with several other big-name video tech companies to develop a universal high-efficiency video codec, which would allow subscribers to stream 4K quality video with very little data usage. Hunt says his stretch goal is 250kbps, which equals 0.9 gigabytes per hour. That's 15% of the file size Amazon currently uses to stream HD video.
But if Netflix is going to work so hard to reduce file size in light of wireless data caps, why not let users download those smaller files to their smartphones? The company's logic just doesn't make sense.
In the meantime, frequent long-distance travelers may opt for Amazon Prime over Netflix, considering the former offers the option to download some content. Amazon's growing library, including the EPIX movie library and its growing slate of originals, makes it an increasingly viable alternative to Netflix.
Adam Levy owns shares of Amazon.com. The Motley Fool owns and recommends Amazon.com and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.