The new Apple TV should hit the the 1 million sold mark later this week Apple (s aapl) said today. The success of the device in its second iteration is likely a result of its lower price and the inclusion of streaming partners such as Netflix (s nflx).
The new Apple TV’s price point at $99 definitely helped it gain traction with consumers. The version it replaced cost $229, though it did ship with a 160GB hard drive. And streaming iTunes rentals may be a draw for some, although reading between the lines of Apple’s press release, that isn’t the impression you get. Apple says that “iTunes users are now renting and purchasing over 400,000 TV episodes and over 150,000 movies per day,” but doesn’t make any specific mention of how much of that is happening directly on the Apple TV platform.
No, the real key to Apple’s success with this iteration of the Apple TV is the introduction of Netflix streaming. Some were skeptical the introduction of Netflix would have any effect on Apple TV’s sales, but those naysayers probably didn’t take into account the new, lower price point for the Apple TV. It’s true that Netflix is already available on every major console, but Apple’s price of entry is cheaper for those just looking for a way to cut the cord without the frills. The Roku XD may be cheaper, and also provides Netflix, but it doesn’t have the brand cache and market reach that Apple does.
Netflix now has presence in 23 percent of homes with broadband internet access according to Seeking Alpha, which is up 52 percent from last year, for a total of around 20 million subscribers. Goldman Sachs also predicts that its total subscriber base will continue to experience strong growth, reaching 50 million subscribers by 2015. Since it moved into the Canadian market this fall, Netflix has been able to reach a much broader audience. Apple may have a lot of things going for it in other areas, but Netflix is the beast that’s driving its living room success.
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