Why downloadable movies will fail

There have been several video download services in the past; all have failed.

A few months ago, Amazon announced their Video Download service, which they dubbed “Amazon Unbox”. What is unusual about this offering is its “direct-to-TiVo” download option. This allows watching on TV (which most people do) instead of on a computer (which few will do).

I’ve had a TiVo for about eighteen months now, and I’m a big fan. Amazon kick-started the service by offering a $15 credit for new customers – which roughly translates as FREE MOVIES – so I was happy to give them a try.

I have downloaded three movies in this way. In spite of some teething troubles, I am very impressed at the service. However, I do not believe that Unbox will succeed. There are two reasons why.

First up is our old friend, DRM. Digital Rights Management is where content providers (movie studios, in this case) decide what consumers (you and me) can and cannot do with the content we legally purchased. While the TiVo has DRM, it is so seamless that it is hardly noticeable  – in my book, that is the only kind of DRM that works – but Unbox adds another couple of restrictions that make me want to take my custom elsewhere. When you purchase a download, you have thirty days to watch it before it will “softly and silently vanish away”. This is not unreasonable. The other restriction is a little more onerous: once you start watching the movie you have 24 hours before it, too, vanishes. This is a deal-breaker for me, as not everyone who wishes to watch a movie around at any given time. Extend this period to a week or get rid of this “feature” entirely.

The second reason is price. Or rather, value – what you pay for vs. what you get. Four bucks is not unreasonable for a video rental from a local store. For that you get a DVD with liner notes, subtitles (a big deal for me), audio streams, commentaries, extra goodies, etc, and the assistance of a salesperson. You also get a tangible item that you can hold in your hands that you can watch and re-watch as often as you like. You can even extend the rental period if you wish. When you rent a DVD, the store – a local business – gets a cut, as does their distribution network and the manufacturer, so you have the knowledge that you are helping out a local business. The publisher probably gets around $1 or $2. When you download a video you do not get any of those goodies, and the lack of human interaction means that the distributor makes a few pennies and the rest goes straight to the publisher. So with a movie download you pay more and get less, while the publisher does less and gets more. This is what the content industry is pushing hardest for – charging the same price to your customers while cutting out the middleman; Dire Straits said it so well – “Money fer nuthin and yer checks fer free…

I’m not saying that movie downloads are a bad idea; I am saying that they are overpriced. I’ll be using up my free credit; after that I will use it only occasionally.

So what does it take to change my mind? Simple. Halve the price – at $2 a movie I will probably watch one or two a week. Not likely, methinks, but I honestly believe that a little more flexibility from the movie industry will result in far greater profits. The same is true of music downloads, but that is another story.

Now Reading: Favorite Dog Stories, by James Herriot

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