The Video Download Saga Continues; Real Winners Appear to be Movie Studios
Currently, the list of companies that will assuredly be offering legal movie downloads, considering offering legal movie downloads, or acutally are offering legal movie downloads, looks like this: Apple, Microsoft, Comcast, Amazon, Wal-mart (yes, Wal-mart), Blockbuster, Time Warner, AT&T, Bit Torrent, MovieLink, and CinemaNow. This list is also slowly beginning to include file-sharing networks that have come under legal pressure like Kazaa.
I have expressed skepticism about the download model in the past (see here for example), but this impressive list speaks for itself. Apparently, movie studios have been given reason to ease their worries regarding piracy and many of them seem to be on board. They do, however, hold all the power in this situation, as the increasingly competitive market for licensing will probably lead to some major concessions on behalf of the potential service providers, especially on things like price. This competition has already made big winners out of the movie studios, according to Seeking Alpha.
The last real hurdle in getting the fully-fledged never-go-to-the-video-store-or-use-Netflix-again-model off the ground is getting widespread agreement from studios to let providers offer movies that can be burned onto DVDs. Movie studios find this prospect extremely troublesome, for obvious reasons (i.e. Let’s say you can buy a movie online for 15 bucks or buy it from someone else who made DVD quality copies for 8. Which would you do?).
Sites like CinemaNow, at least, has been offering this service for a few weeks now, but it has had no real industry-wide effect, as both it and MovieLink haven’t built up much of a user base. According to My Movie Download, questions have been raised concerning, among other things, the limited selections offered by these sites.
In any case, this technology needs the big boys (like Apple) to get involved in order for it to really get off the ground. And even then, I think it will take a few years to really take over. What I don’t understand is why Netflix itself doesnt get involved somehow (perhaps it is planning to but I haven’t heard anything about it). It would have a HUGE advantage over its competitors in that it already has an enormous user base. Establishing this base is the whole battle.