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Thread: LA Times: Hollywood downloads a post-DVD future - Rentals likely to go to 60 days
High Definition Smackdown - LA Times: Hollywood downloads a post-DVD future - Rentals likely to go to 60 days - Hollywood downloads a post-DVD future The movie studio business model is poised for its biggest shift in years as Hollywood turns to Internet delivery as the only way to boost home entertainment revenues....
Kosty
LA Times: Hollywood downloads a post-DVD future - Rental delay likely to go to 60 day
Hollywood downloads a post-DVD future
The movie studio business model is poised for its biggest shift in years as Hollywood turns to Internet delivery as the only way to boost home entertainment revenues.
Rocket Video, a mecca for L.A. cinephiles, is closing after more than 30 years. It offered obscure art-house and foreign films. Sales plummeted as users switched to on-demand services. (Bob Chamberlin, Los Angeles Times / September 25, 2011)
Graphic: Comparing home entertainment media sales
Ben Fritz, Los Angeles Times
Across Hollywood, a quiet revolution is brewing that's about to transform living rooms around the world.
After desperate attempts to prop up the industry's once-thriving DVD business, studio executives now believe the only hope of turning around a 40% decline in home entertainment revenue lies in rapidly accelerating the delivery of movies over the Internet.
In the next few years, the growing number of consumers with Internet-connected televisions, tablets and smartphones will face a dizzying array of options designed to make digital movie consumption a lot more convenient and to entice users to spend more money.
With films that can be accessed on any digital device, downloaded as iPhone apps or shared on Facebook as easily as a photo, it may be the biggest shift in Hollywood's business model since the explosion of the DVD in the late 1990s.
"The days of baby steps on the Internet are over," said David Bishop, president of Sony Pictures' home entertainment unit. "It's now critical that we experiment as much as possible and determine how to build a vibrant market for collecting digital movies."
Though the online movie business has been growing at a healthy clip for the last few years, driven in large part by the majority of Netflix's 24 million U.S. subscribers who stream video, it hasn't come close to making up for the rapid drop in DVD revenue. Insiders attribute that to the lack of selection — thousands of movies available on disc still can't be found online — and to the complexity of downloading a film on one device and watching it on another.
Studios are eager to change that by offering more movies in easier ways, but there's not yet a consensus on how. As a result, people who connect their TVs to the Internet or buy iPads will face a vastly expanded but potentially confusing menu of options to access films from different sources in various ways.
"What you have now is a lot of people pursuing a lot of different paths to figure out how to reverse the trends we've been seeing," Paramount Pictures Vice Chairman Rob Moore said.
One thing is certain: People who like inexpensive movie rentals are going to have to get used to waiting longer than they do now. Studios are beginning to use the Internet to slice up the market so that people who are willing to buy a movie or pay more to rent it can get it sooner.
Four studios have already experimented with so-called premium video on demand, in which consumers pay $30 to rent a movie only two months after it debuts in theaters. Recently Sony Pictures began selling some movies online two weeks before they become available on DVD.
At the same time, some studios that make Netflix and kiosk rental company Redbox wait until 28 days after a DVD goes on sale before they can offer it for rent want to lengthen that delay. They believe such a move will encourage consumers to pay more to buy or rent a movie digitally.
By next year, consumers may have to wait two months or longer after a movie goes on sale before they can get it in a Redbox kiosk or Netflix envelope. Those who want to stream films online for a flat monthly fee from Netflix, Amazon or Blockbuster will in many cases wait years until those titles have completed their runs on cable networks like HBO.
"I see movies going down a path over time from premium sell-through all the way to the lowest-price rentals," said Craig Kornblau, president of Universal Studios Home Entertainment. "If we get digital right, consumers are going to get what they're willing to pay for."
Until now, most people have been largely uninterested in buying movies online, no matter the price or timing. Purchasing digitally typically means downloading a file to a single device, less convenient than a disc that can be moved from a bedroom to a minivan to a portable DVD player. Research firm IHS Screen Digest estimates that Internet movie purchases will be flat this year compared to last, while online rentals will surge 41%.
Hollywood's solution is to put movies in the "cloud," creating virtual copies that people can access, after purchase, from any Internet-connected device. An initiative called UltraViolet will launch this year, when Blu-ray discs for films like "Green Lantern" and "The Smurfs" will come with free cloud copies. By next year, most online and DVD purchases will connect to UltraViolet's "virtual locker," and Apple's iTunes is expected to have a similar offering.
To encourage people to embrace the cloud, studios are even considering offering digital copies of DVDs they already own for a nominal fee.
"Historically when you bought a DVD you were really just buying the physical copy," said Edward Lichty, general manager of Wal-Mart Stores' digital service Vudu. "It's a profound development to say you own the movie itself and it can't be broken or lost."
Studios are rethinking not only how to sell movies online but where. The next frontier, many agree, is Facebook. Some have already started renting movies to people who click "like," but many executives hope to do more. People could use social networks to watch films with friends, share clips and play social games related to movies. They could also get recommendations based on the "likes" of people on their friends list.
Similarly, many in the entertainment industry are hoping that smartphones and tablets will be more than just another screen for watching movies. They're looking for ways to create movie-specific apps, as Warner Bros. has already done for titles like "Inception," and to use the devices as "second screens" with additional content such as director commentaries.
"On these new platforms we have to forget the way we have thought about movies as 'transactions' and think about them more as 'experiences,'" Lionsgate President Steve Beeks said.
On a recent Tuesday afternoon in Los Angeles, the need for Hollywood to make the great digital leap was evident as customers searched for bargains at Rocket Video's going-out-of-business sale.
A mecca for L.A. cinephiles for more than 30 years, Rocket offered tough-to-find art-house and foreign films. But like giant chain Blockbuster, which shuttered more than 1,750 stores in the last year alone, Rocket saw revenue plummet as customers flocked to less expensive and on-demand alternatives.
"I used to buy a lot of DVDs, but since two years ago I've just been using Netflix and iTunes," said Katherine Canipe, a 26-year-old actress clutching a copy of "Pet Sematary" that she had just plucked off the shelf. "I hate to see places like this going away, but I know I'm part of the problem."
As he sold off the store's more than 50,000 DVDs and VHS tapes, longtime store manager Jeff Miller remembered the days when Rocket was packed on Friday and Saturday nights with young people stocking up for a weekend of movie watching.
"It just became obvious we weren't making as much as we used to and there was a shift to an older crowd," he said.
Now the remaining customers have been asking Miller what they should do.
"I don't know what to tell them," the self-professed technophobe admitted. "But recently I've been thinking even I have to figure out how to get movies on the Internet."
http://www.latimes.com/business/la-f...,6516807.story
Last edited by Kosty; 09-24-2011 at 11:03 PM.
CaptainCanuck
I would think that netflix and the other services should ramp up their selection if they're wanting to put all the dvd rental places out of business.
Of course today's generation of film watchers don't care as much about 30 yr old movies so maybe not.We might see video services full of remakes.
Malanthius
Makes sense. That's why I always laugh at the "wait till 4th quarter" excuses. 4th quarter is always going to be better than the rest of the year. But 1st-3rd can already show you the big picture. This article is a reality check. Hope some here let it sink in.
ack_bak
Originally Posted by Malanthius
This article is nothing new. This pretty much sums it up from the article:
What is growing? Uber cheap rentals. Whether they be Netflix streaming or Redbox optical disc rentals. There is really nothing eye opening in the article, it is the same stuff we rehash a million times here. Revenue is dropping and there are tons of reasons for it. The studios seem to think that digital will be the next big thing, but digital sales are not taking off at all. In fact in Q2 this year sales were actually down YoY which is a really bad sign for the studios. They better hope UV picks up the pace. But judging by the model we are seeing with UV (bundling with optical discs), the price, and no support from Apple, Amazon, and Disney, along with the announced titles, it looks like we might be waiting to 2012 and beyond to see the impact of UV.
Lee Stewart
Formerly "HDTV Addict"
Four studios have already experimented with so-called premium video on demand, in which consumers pay $30 to rent a movie only two months after it debuts in theaters.
DIRECTV Confesses: $30 VOD Is 'Too High'
Washington, D.C. (September 22, 2011) -- DIRECTV CEO Mike White said today that his company's $30 Video on Demand service, known as Home Premiere, is not successful because the price is "too high."
On April 11, DIRECTV launched Home Premiere which charges $29.95 per viewing of movies made available 60 days after their theatrical release and one month before their DVD or Blu-ray release.
However, according to Bloomberg News, White said demand for the Home Premiere movies has been "small."
"They're priced too high for consumers," White said, according to Bloomberg. "We didn't choose that price, but that's where the studios forced us to be."
http://www.tvpredictions.com/white092211.htm
8 Netflix alternatives compared
By Mike Isaac, WIRED
updated 8:15 AM EST, Wed September 21, 2011 | Filed under: Web
Wal-Mart got in on the media-services game in 2010 by buying Vudu, another streaming media company.
Amazon Prime launched in 2005, offering two-day shipping on any of its products
Redbox made it possible for legions of supermarket shoppers to pick up a movie on the cheap
At $8 a month, Hulu Plus offers instant streaming access to a wealth of TV shows
(WIRED) -- The curtain hasn't even opened on Netflix's new DVD-by-mail spin-off company Qwikster, and many customers are already walking out.
The company recently revised its quarterly projections of net subscribers to show 1 million fewer customers than it had previously expected. Much to Netflix's chagrin, folks are realizing that the king of mail-away media isn't the only game in town.
We've taken a look at some of Netflix's (and Qwikster's) main competitors, and judged each service accordingly. Do the rest offer enough to stand up to the best?
Netflix/Qwikster
Also known as Netflix: Redux. It's the same service we know and love, only completely different. Faced with massive customer backlash in the wake of a price hike, Netflix split itself into two separate companies this week. The streaming service will retain the Netflix branding while the DVD-by-mail service will be named
Qwikster. Netflix CEO Reed Hastings said the split will better serve customers in the long run because each company will be able to better focus on one type of service.
Netflix pioneered the DVD-by-mail service, creating an entire industry where one did not exist previously. But after serious flux in Netflix's new pricing system — which split the streaming and DVD mailing services into two separate plans starting at $8 a month minimum — there's no guarantee the company's customers will continue to stick around.
WIRED: It's been around the longest, and is the most familiar service. Massive offering of physical mail-away media. New game rental service sounds intriguing. Streaming to all iOS devices and Android smartphones.
TIRED: Can you say price increase? We don't like paying more money for the same service, and we're failing to see how splitting the companies in twain is going to benefit consumers. Streaming-only service still lacks selection compared to DVD catalog.
Amazon's elite-level service launched in 2005, offering two-day shipping on any of its products to members anywhere in the continental United States and other select countries for a reasonable $80 a year. Originally meant for those who couldn't wait more than 48 hours for their tangible goods, Prime expanded in February to offer instant, streaming movie and TV show access to existing Prime customers at no added cost.
WIRED: Fast shipping on everything Amazon! What other movie service offers that? Lower yearly rate than Netflix and Qwikster. Works with over 100 different web-connected set-top boxes, including the ever-popular Roku.
TIRED: Smaller media selection compared to other existing services. Lacks the DVD rental option that made Netflix famous.
Redbox made it possible for legions of supermarket shoppers to pick up a movie on the cheap, without having to make multiple stops. Instead of leaving the grocery store (or 7-11, Walgreens or what have you) with only a TV dinner and a Mountain Dew in tow, Redbox's 30,000-plus DVD-rental kiosks make sure you won't go home alone on a Friday night again.
WIRED: Cheap, cheap, cheap. DVD rentals average two bucks a pop, with anywhere from 50 to 200 recent titles to select from in each kiosk, updated weekly. Game rentals to roll out this year.
TIRED: No streaming service? Bummer.
Once the dominant force in the media-rental industry, Blockbuster has fared horribly over the past few years. After scoffing at Netflix's business model years ago, the big blue-and-gold company filed for bankruptcy last September.
However late, Blockbuster jumped on the bandwagon with its own Netflix clone mail-away service, but with the added advantage of allowing customers to return DVDs to brick-and-mortar Blockbuster stores. And finally, Blockbuster Express is a blue-and-gold Redbox rip, with kiosks placed in grocery stores and Kwik-E-Mart's across the country.
WIRED: The Dish Network acquisition could mean big things for Blockbuster when (or if) the companies get a game plan up and running.
TIRED: Brick and mortar is slowly dying, so the leg-up Blockbuster has on Netflix with in-store DVD exchange may soon be moot. Ripping off its two major competitors shows a lack of ability to innovate, possibly signifying that the company is still behind the times.
At $8 a month, Hulu Plus offers instant streaming access to a wealth of TV shows only a day or so after they've originally aired. But seriously, if you're paying a monthly fee, you shouldn't have to deal with mid-show commercial breaks. That's the whole point of paying for streaming service, right?
Still, I challenge you to find a more comprehensive archive of Hell's Kitchen reruns on the web.
WIRED: Streaming to all iOS devices and some Android smartphones and tablets. Tons of TV shows that aren't out to rent on DVD.
TIRED: Despite taking your $8 monthly fee, you still have to sit through asinine commercials. "Hundreds," not thousands, of movies to choose from. Again, no physical media. Rights agreements sometimes complicate how many episodes are available for viewing on the site.
Google has struggled to keep up with Apple in its media service offerings, only recently debuting its movie rental service on the Android Market in conjunction with a complete interface makeover. Fortunately, renting flicks from Google is available on all Android devices running version 2.2 and up — that's something even Hulu can't say.
WIRED: Rental ain't pricey, averaging around two to five bucks a pop. Streaming to Android phones is nice. Compatible with PCs.
TIRED: No physical media. Not functional across all Android tablets.
iTunes and Apple TV
There's a down-payment to get Apple TV up and running in your home, and it's in the form of a small, sleek set-top box. Fortunately, it's only $100.
Along with Netflix compatibility, Apple lets you purchase and rent movies from its iTunes media store, along with the ability to buy TV shows (due to lack of customer demand, Apple discontinued TV show rentals last month). Further, you're able to watch streaming media on all of Apple's mobile devices. The company wants to hook you into an Apple-centric world, and the interconnection between its services makes it easier for customers to buy in.
WIRED: Purchase prices are par for the course, ranging from $1 to $3 depending on whether you want to rent or own. Ability to buy entire seasons of a show is convenient. Rumors and speculation have long suggested bigger plans for Apple TV's future, though Apple itself is staying mum on any potential developments.
TIRED: Lacks an "all-you-can-stream buffet" option, which can get costly if you watch a lot of flicks. Though its library is extensive, iTunes alone doesn't contain the esoteric indie films that Netflix totes. So if you're subscribing to Netflix and buying through iTunes at the same time, charges could add up fast.
Wal-Mart got in on the media-services game in 2010 by buying Vudu, another streaming media company. Initially the service was available only in a set-top box version, but Vudu has since extended itself to other platforms as a standalone media service in and of itself, available to Playstation 3 users, Boxee for OSX owners and Windows-based PC users.
WIRED: Rentals and purchases stay on par with most other services, settling in the $1 to $5 range for rentals, and upwards of $5 for purchases. Titles available the same day they're released on DVD, unlike other services that require waiting periods. Streaming video available on iPad.
TIRED: No monthly unlimited movie-streaming option.
http://www.cnn.com/2011/09/21/tech/w...red/index.html
Blockbuster's Netflix rival will make streaming market even more confusing
By Julianne Pepitone @CNNMoneyTech September 22, 2011: 12:19 PM ET
NEW YORK (CNNMoney) -- Cable companies were ticked off when "cut the cord" became a rallying cry in 2009, with disgruntled consumers vowing to cancel their expensive TV plans in favor of cheaper options --
namely, Netflix.
But fast forward two years, and lots of Netflix rivals have popped up. They've each nabbed their own piece of the streaming video pie, fragmenting the market and making things complicated for consumers.
On Friday, a new player is jumping into the fray: Blockbuster, acquired out of bankruptcy in April by DISH (DISH, Fortune 500) Network, is holding a press event titled "A Stream Come True." The site is widely expected to unveil its own streaming service.
Blockbuster currently offers pay-per-view on-demand titles. With Dish Network's backing, it could make a powerful player in the flat-fee "all you can watch" streaming market that Netflix pioneered.
That means yet another choice for customers -- and no choice at all.
Want to stream current seasons of your favorite TV show? Hulu's probably your best bet. But wait! If it's a CBS show, you're out of luck -- Hulu doesn't have U.S. rights to those. Netflix (NFLX) has some, but rarely from recent years.
And what about Amazon (AMZN, Fortune 500) Instant Video, the company's experiment with free streaming for Prime subscribers who pay a yearly fee? You can snag some recent movies there, plus a smattering of TV shows from Showtime -- but none from HBO, which streams its content exclusively to its cable subscribers.
It's all very confusing. Which is, of course, is exactly how cable providers and studios want it.
If consumers can't get all the shows they want with a single cheap streaming option, they'll either have to juggle several subscriptions or stick with traditional TV.
"The studios' business philosophy is to work with multiple outlets, don't let any single one gain strength, and carve up the space," says Will Richmond, founder of consulting firm Broadband Directions.
"That's how Hollywood does business," he adds. "It's in their interest for things to remain confusing, and that's how it will be for a long time to come."
Studios love the infighting among streaming services and cable providers, because they're holding the power cards as the owners of the suddenly very valuable content.
If Netflix and its rivals get into bidding wars, the price of that content will keep climbing higher. In fact, one analyst predicts that Netflix's streaming content licensing costs will rise from $180 million in 2010 to a whopping $1.98 billion in 2012.
Meanwhile, consumers are the ones caught in the crossfire. Movies keep disappearing from their Netflix queues as streaming rights to them come and go, and it's a chore to figure out which services offer their favorite shows.
Is a rebellion looming? A decade ago, when listeners got fed up with the price of CDs and the hassles of buying legal music online, they turned en masse to Napster and other illegal file-sharing services. At least that way, they got a one-stop shop.
A legal fusillade from the record studios put Napster out of business, but the piracy wave really died down only when someone offered a cheap, easy solution: Apple's (AAPL, Fortune 500) iTunes. At 99 cents a track, it illustrated that consumers are willing to pay for digital content when the price tag is low and access is easy.
Netflix's turmoil has an awful lot of its customers muttering a word that should terrify the studios: BitTorrent.
"The illegal path is not about the cost; it is about actually being able to get all the content you want from a single source," CNNMoney reader Nathan Weyer commented on a recent Netflix story.
"This 'we have X content, but if you want Y you need to go to another service' ... drives consumers mad," Weyer added. "Sufficiently tech savvy consumers will just drop the whole mess and go the less legal route because the legal one is broken."
But making the legal method more attractive for streaming video isn't going to be as easy as it was for music, says Richmond, the Broadband Directions founder.
"You'll pay a small price for a song you fall in love with and listen to over and over again," Richmond says. "People don't generally approach a TV episode and say, 'I want to own that.'"
An all-you-can-eat, monthly subscription model for video remains the more attractive option -- and a big catalog is the ideal. But as the ongoing Netflix fracas illustrates, a simple solution seems a long way off.
First Published: September 22, 2011: 11:45 AM ET
http://money.cnn.com/2011/09/21/tech...ex.htm?iid=EAL
luclin999
And this is why I laugh at tunnel vision based claims like that one which completely ignore any contributing factors which don't fit their ridiculously small viewpoint that a growing format is somehow already dead.
Things like the economy, release schedules and overall box office performance of the films released in a given quarter.
If people are counting pennies and nothing but utter crap has been released then of course there will be fewer sales.
But apparently none of that matters to some people who continue to idiotically insist (day after day after day after day...) that it simply must be that people hate buying movies when they are in High Definition and come in little blue boxes.
Again you ignore the impact of the extra releases in 1Q and 2Q 2010 that have distorted the YoY statistics and ignore the general pace of the growth in the weeks besides the non competing weeks like Twilight :New Moon Alice in Wonderland and Avatar and the 1 billion in box office advantage that 1H2010 had over 1H2011.
Blu-ray is doing better than that overall that you see in the 1H2011 stats and its well on its way to 40% 3Q YoY growth, so we do not have to wait until the 4Q to see that your logic is flawed .
Next week should give you a reality check.
Originally Posted by luclin999
Originally Posted by Kosty
Ignore it if you like fellas. Studios see what's going on and are trying desperately to find a way to make some REAL money since Bluray ain't doing it for them. Oh, and never will. They see this. Otherwise you guys wouldn't be all by yourselves in your delusion. Because you sure don't hear them saying "wait for forth quarter!" haha they know that's not going to improve the outlook for Bluray. It is what it is guys. And "it" ain't great.
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