Movie Downloads: Technology in Search of a Market

October 27th, 2006

All right, some 125,000 movies were downloaded from iTunes the first week the service was available. Since then, things have been fairly silent on that front. That only one studio is participating certainly limits your choices, but there’s a larger question, which is whether it makes any sense at all to buy a movie from any download service except as a novelty. Or maybe you’re stuck in a hotel with nothing to do.

True, Amazon has more studios on board, just about all except Disney in fact, but the situation is little better, and Mac users aren’t allowed right now.

Both services have severe restrictions, even though the prices are barely less than what you’d pay for a physical DVD from a discount retailer. You can copy the downloaded file to a DVD, but only for backup. You can’t take that disc and play it on a regular DVD deck. Foolish, but true. The movie studios also make a big deal of all those extras on the DVD versions of your favorite movies. You have a regular cut, a director’s cut, deleted scenes, background information, and lots more.

But not on those particular movie downloads.

Now to whom do you assign the blame? Is it Steve Jobs and his crew Apple for not making a better deal, Amazon or any of the other services out there? Or do you put the blame four-square in the hands of the movie companies and their lawyers who came up with these silly notions in the first place?

Yes, we all know there is DRM on music downloads too, but at least with Apple, the restrictions aren’t so severe as to inconvenience most law-abiding people, which is why there are not a lot of complaints. Aside from exclusives, the music companies are essentially agnostic about which services they’ll sell to. That means that Microsoft’s forthcoming Zune Marketplace, and the existing services, have many of the same titles that you find on iTunes. To the greedy companies who license that music, they’re happy to take your money and they don’t care where you get your music, so long as it’s from a legal source and they benefit.

Now I’m sure the movie companies understand that technology is changing, and that someday broadband speeds will be sufficient that you’ll be able to download high definition movies in just a few minutes. They need to prepare for these developments, and they are just wading in the waters right now and trying all sorts of lame solutions hoping that some will gain traction.

Today, however, I find little reason to download a movie, except as an experiment, as I did on the day iTunes began to carry such fare. All my movie rentals come from Netflix. They have a great selection, even of older titles, and, if you get on the waiting list early enough, you will rarely be passed over when a hot new release is available. Yes, I know some have complained that folks who rent too many titles over a month may be getting short shrift. Perhaps Netflix is acting like the ISP when you use too much bandwidth, but I don’t think it happens to that many people.

For the rest of us, Netflix is cheap, flexible, reliable. If I truly do want to buy a movie, and I do on occasion, Netflix often offers previewed DVDs at discount prices. Or you can save money on new product and go to Wal-Mart or Amazon for your favorite titles. The former, for example, often sells new releases at a discount, a loss-leader, just to get you in the store to buy other merchandise. Regardless, it makes plenty of sense to take advantage of those great prices.

So if I can do all this, why would I want to save a couple of dollars for a crippled movie download? The answer is, that I don’t, and I won’t until the movie studios and the services that carry their product get together and come up with a sensible solution.

What does that mean? Pure and simple, the download version must be just like the one you buy at a store. You can make a DVD copy of it, the resolution and content, with all the extras intact, is identical. The only possible difference might be some minor restrictions on copying the file to a certain number of DVD blanks, which makes perfect sense.

And it should be cheaper than the physical version, since the studios don’t have to pay for manufacturing, packaging, shipping and wholesale distribution. But, at a time when movie studios can waste tens of millions of dollars to fawn over an overpaid star, you can’t really expect them to do something that makes sense, right?

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5 Responses to “Movie Downloads: Technology in Search of a Market”

  1. Terry says:


    I think you’re right. The only thing I could at is that this will be an important future market and the players are staking out their turf.

  2. JB says:

    I agree with this article. There are a couple of other reasons why movie downloads aren’t appealing (at least for me):

    1) “Near DVD-quality” (Apple’s words). Consumers are moving toward large, HD screens in the living room. Standard DVDs look OK on HD screens—better than SDTV—but once you’ve gotten an HDTV, you will become increasingly impatient with less-than-HD quality. Why bother with the hassle and inconvenience of downloading a movie that isn’t even DVD-quality? Once the industry straightens out its act on HD DVDs, and more cable/satellite channels go to HD, consumers will find it hard to put up with DVD quality anymore, and HD downloads would be an order of magnitude larger and more time-consuming.

    2) I do *not* want to own most fictional/narrative movies. There are only a handful of these movies that I have ever wanted to see more than once in three decades of watching movies. Renting them once is more than enough. Concert films or important documentaries are different, but I don’t see the point in owning most fictional films.

    Quite frankly, I think Apple and Jobs probably believe movie downloads aren’t ready for prime time, but have been pushed into the movie download business by the hype and speculation coming from the computer and movie industries, press and pundits before it really make sense—which is an uncharacteristic position for Apple. So, unless they pull something extra special out of their hats when iTV arrives to address these issues, I don’t forsee a huge success for Apple in this space.

  3. SteveP says:

    Absolutely right on this one.

    Given what I see as a lack of “ethics” on the part of many internet users (rationalizing theft.) I understand the major studios concerns with DRM, piracy etc. Then the user uses DRM to again justify their “theft”. Vicious circle. Not sure there is – or will be – any model to completely deal with this. Not too many people complain though about those little devices that beeb when you “accidentally” wander out of the store with unpaid for merchandise. Now a fact of life.

    Anyway, apologies for wandering.
    What I was thinking is that there seem to be opportunities here that are just beginning to be tapped. Don’t be concerned with the major studios – either for movies or music.
    Once better distribution models take over, there may be no reason for musicians to go through major studios if they can’t offer value to the musician. The musicians can form their own coops for onilne distribution and maintain ALL profits. Companies may crop up to do PR for these coops etc to replace that done by studios, but control of these things would now be in the hands of the artists.
    Same with movies. Forget the “blockbusters” and major studios on the net – for now.
    Look at all the indie films that have never gotten good distribution or audience or PR. Look at the current “social networking” that will play a significant role in spreading the news of these things. Look at the student movie trends. THESE movies will go well on internet. and the internet will become a source of funding for these – and other – artists of all types.
    Dont worry about the major studios. Don’t try to beat new distribution models etc into their heads. Go behind their backs. There is so much potential good “entertainment” available – from artists that are actually trying to SAY something, that except for an occasional “good” razzle dazzle visual effects type Hollywood movie I could survive very well. (Of course I’m a reader more than a movie/TV person anyway, so I’m kind of biased.)

    Just thoughts. (probably with lots of holes)

  4. GSlusher says:

    Amazon is seldom the cheapest source for DVDs. Try DVD Planet, Deep Discount DVD, and Family Video. If you like old TV shows, B movies, serials, and the like, check, which has a large selection of DVDs at $5.95 or 5 for $25. Media mail shipping is free at Deep Discount DVD, DVD Planet ($25+ order), and ($50+ order), while Family Video charges $0.99 for media mail shipping, regardless of the size of the order or if it comes in more than one package.

  5. Steve says:

    In response to SteveP’s comments, that’s exactly what little people like us are hoping for. Specialised low budget movies have an audience, if only the product and the viewer could meet. Also, low-budget doesn’t necessarily mean ‘horror’, some movies actually have something intelligent to say to anyone who’s interested, like our low budget feature, ‘Yam‘.

    Another interesting site to explore is IndieFlix.

    The web is the best hope for independent filmmakers to stay independent and earn a living from their craft.

    I’m looking forward to Apple distributing indie features like ours on iTunes!

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