The reason for this was that too many people were skeptical about whether such a service was still necessary. It absolutely, totally is, and I’ll give you one reason why: Netflix’s DVD service has roughly 93,000 options, while its streaming service (between shows and movies) has fewer than 8,000 options—ensuring that DVDs will have a reason to exist for quite a while.
Why such a big difference? Well, it’s because running a streaming service and sussing out the contracts is really freaking hard. (Hollywood is a tough negotiator.) And, by the way, Netflix wasn’t the first to do video-on-demand in this way. [...]
Among the reasons the telecom firm was so willing to spend $200 million to test the idea: The autonomous territory has one of the world’s highest per-capita incomes; the relatively small size of the region made it easy to cover the territory with fiber-optic cable; and consumers in Hong Kong had a clear taste for both technology and entertainment. Cable television, which only came to Hong Kong in 1993, had saturated 25 percent of the market at the time iTV launched. No matter the case, making iTV happen wasn’t cheap: The company reportedly invested $1.5 billion in the entire project before it had served a single customer.
The piece, featuring an interview from Hongkong Telecom’s Lo, spoke of the concept (already being tested in trials at the time of the piece) in bold terms, including implying that the set-top box would bring impressive levels of interactivity to homes. Banking services were planned. In other words, this wasn’t just a prototype for Netflix, which wasn’t even mailing DVDs by this point, but a juiced-up WebTV.
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