mSpot Challenges Netflix with New Movie-Streaming App for iPad

Xconomy.com

Up to now, there have been two main ways to watch full-length movies on your Apple iPad: buy or rent them from Apple itself through the iTunes store, or, if you have a subscription to Netflix’s DVD rental service, choose from the subset of movies available for instant viewing using the Netflix iPad app. Now there’s a third option: the new mSpot Movies iPad app, launched yesterday.

Palo Alto, CA-based mSpot is pitching the app as a zippier alternative to Netflix, with a wider selection of new-release movies.

“We get asked how we are different from Netflix,” says mSpot CEO Daren Tsui. “They may have 10,000 titles to stream, but you probably don’t want to watch 9,995 of them. It’s all old stuff. Ours has the latest and greatest—Green Zone, Alice in Wonderland, you name it.”

The mSpot service currently offers about 1,200 titles, Tsui says. But it may not be fair to compare the two movie apps directly. The Netflix (NASDAQ: NFLX) app is an extension of the company’s Web-based “Watch Instantly” service, which was born as a free and convenient way for existing Netflix subscribers to see some movies and TV shows without having to wait to receive DVDs in the mail. MSpot’s service, by contrast, is a rental service designed specifically for mobile access, at a cost of $2.99 to $3.99 per movie.

“They are two different use cases,” Tsui acknowledges. MSpot’s iPad app grew out of the company’s longstanding streaming-movie service for smartphones. As I wrote in a June 28 profile of the company, mSpot specializes in delivering multimedia content to mobile devices, beginning in 2004 with white-label streaming music services accessed through the major wireless operators, and evolving more recently into mSpot-branded services such as the company’s new cloud-based music service.

Tsui says delivering movies to smartphones has given the company special insight into the desires of mobile-device users. “We’ve had a movie service for almost four years on smartphones, and we know that for mobile, the majority of our movie rentals are new-release-related,” he says. “That drove us to continue the strategy we have with the iPad app, which is that we can always back-fill the library, but let’s make sure we play in the new-release window.”

In a YouTube video shared with reporters yesterday featuring a head-to-head comparison of the mSpot and Netflix movie apps, mSpot also plays up user interface differences that allegedly help users start watching movies faster.

“I think it highlights the different development backgrounds of the two companies,” Tsui says. “Netflix obviously came from the Web, and we came from mobile. So when you launch our app, you don’t have to wait until all the DVD cover art is loaded. We give you the text of the [movie] catalog, and then we start filling in the cover art. So the user experience, from the time you click on the app to being able to see something, is lightning fast. Whereas if you look at Netflix’s app, they pretty much took their Web experience and brought it down to the portable device, so it takes forever to launch.

But there’s one area, pricing, where Tsui says mSpot thanks Los Gatos, CA-based Netflix may have the right idea. For frequent movie renters, mSpot has a subscription “Movie Club” plan that provides discounts on individual rentals. The $9.99-per-month plan lets club members rent four movies per month, which translates into a discount of $0.49 to $1.49 per film. Netflix’s Watch Instantly service, by contrast, has a simple all-you-can-eat plan for all regular subscribers. Tsui says mSpot is considering a similar all-you-can-eat plan, but that it needs to get even more movie studios on board with its rental streaming service first.

“Netflix has proven that their model is a successful model, absolutely, and they have millions of users to show for it,” Tsui says. “We are just trying to one-better those guys in some ways—getting consumers great value but also awesome titles.”

July 13th, 2010

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