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April 9, 2005
Movie Downloads, Maybe
Under the byline "Faultline," The Reg this week published a lengthy analysis of the potential near-future for the movie-downloading business. The article notes that a number of big names (Sony, MSFT, etc.) have announced their intention to step into this arena, but nobody seems to have a business model that answers all the nagging questions.
Clearly the existing services aren't revolutionizing anything - they're not well-known, they have technical glitches, and none of them seems to be willing to make the kind of serious effort at seamless user experience that I think will be essential to success.
Despite the popularity of DIXV and BitTorrent it's still considerably harder to find and download movies on free nets than it is to find and download music (or porn :). This gives the studios time and a potential opening. Their model doesn't have to be perfect; it just has to be a bit better than the nets and it should succeed.
However, there are serious issues that have to be resolved at the business level. For example, how will downloadable movies respond to the region-coding locks that cripple global DVDs? Will they make such locks obvious and more annoying? Will they try to replicate them? On another front, will downloadable movies be rentals, ownables, or rent-to-own? Will they require pre-selection (a la NetFlix) or will the services try to offer video on demand? Will a service try to appeal to the film buff, offering a large library and back-catalog or will it be hit-oriented, with something like the 100 most popular titles available?
All of these options can be done with current technology - which way any particular service goes is therefore a question of business model and how it wants to position itself in the consumer mind. Unfortunately, none of these models seems like a sure thing, so conservative CEOs are being... well, conservative. Meanwhile, consumers are waiting, still waiting...
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