Do People Really Think Best Buy's Retread Of CinemaNow Will Eat Into Netflix And Blockbuster?

from the am-I-missing-something? dept

CinemaNow was one of the dreadful early Hollywood attempts at offering streaming videos online. Pretty much since it launched it was considered a joke that no one used. However, Best Buy last year announced a "partnership" with the latest owners of CinemaNow, Sonic Solutions, and have now announced that they've also bought the name CinemaNow. Best Buy has now announced it will be using the name for a new movie download service still powered by the same tech as the old CinemaNow. Got that? Of course, the press is saying will compete with Netflix and Blockbuster's streaming offerings -- and the stock of both companies took a hit. But, it's difficult to see what's all that compelling about this new service. Unlike the popular "all you can eat" models, Best Buy's will be $4 per movie download with $15 for full "purchase." Those prices seem quite high, especially when you can find used DVDs for half that or less. Plus, why bother going to Best Buy for all of this?

At least some in the press wonder what all the fuss is about:

Best Buy is hoping to rent digital flicks for $4, and sell permanent downloads for roughly $15 apiece. Those prices aren't all that different from what Blockbuster and Amazon.com have been trying to do for several quarters -- and those companies haven't exactly set the digital realm on fire.

Bulls will argue that Best Buy has certain chain-specific advantages. It can promote the service within its stores, and bundle home theater systems with pre-paid rentals.

So how is Best Buy's scorecard on that front? The company teamed up with TiVo for a strategic alliance last summer, yet the DVR pioneer continues to shed subscribers. Best Buy acquired Napster two years ago, yet Best Buy is still an afterthought in digital music.

Sure, Best Buy sells a ton of DVD and Blu-ray discs. Now, it can tack on digital copies through CinemaNow, and all will be perfect... right?

What's that? Wal-Mart teamed up with Time Warner four years ago to do this with the DVD release of Superman Returns, and it was retail kryptonite? Uh oh.

Basically, this seems like yet another case of "well if we offer service combined with a big brand, people will just have to use it," rather than any look at coming up with at truly compelling offering.

Filed Under: cinemanow, movie downloads, movies
Companies: best buy, blockbuster, netflix

Movie Downloads Get Even More Confusing Thanks To Sony

from the this-is-not-a-step-forward dept

The New York Times is talking up a new experiment that Sony is running with the movie Hancock. Before the movie is even available for rental, owners of a specific Sony television with a special "internet package" (only $299) will be able to download the movie for a fee (as if the $299 weren't already enough). The New York Times piece seems to go out of its way to make Sony look like it's made some huge breakthrough with this offering, in part because it brings together the content side of the business with the consumer electronics side -- two groups that not only rarely spoke, but were often at odds with each other on certain projects. On that part, perhaps it is a step forward -- but for the overall market, this seems like a big step backwards.

Requiring a specific brand of TV just to watch a movie over the internet seems hugely problematic. And, when you combine that with Apple, Netflix, Blockbuster and others all working on their own proprietary solutions for downloading movies to watch on your television, the entire market is splintering. By now, you would think the industry would recognize that proprietary solutions that only play on a particular piece of hardware tend not to be a very good solution, and actually scare off buyers who don't want to get stuck having bet on the wrong horse. But, apparently, someone forgot to tell all of these guys working on their own proprietary movie download solutions.

Filed Under: movie downloads, proprietary solutions
Companies: sony

Central Planning Didn't Work In Russia And It Doesn't Work On Your Set-Top Box

from the competition dept

Here's a roundup of movie-download services -- Apple TV, Vudu, Movielink, Unbox -- all of which have underperformed expectations. This won't come as a surprise to Techdirt readers, as we've panned these products before. And the reasons they've flopped are frankly pretty obvious: high prices, restrictive DRM, and no easy way to move videos to the device of your choice. I won't re-hash those arguments, but I think it's interesting to compare the anemic development of the digital video marketplace with the rapid development of digital audio a decade ago. The fundamental difference is that Hollywood kept a tight grip on the digital video market, while the DMCA didn't come along soon enough to give the music industry control over digital music. They tried to outlaw the MP3 player, but because there was no DRM involved, they lost in court, and the result was the flowering of innovation that led to the iPod and other MP3-based devices.

There's still something of a mystery here, though: most video download services are not just bad but spectacularly bad. For example, Hollywood sunk $100 million into Movielink before giving up and selling the whole mess to BlockBuster for $20 million. Even assuming that Hollywood wants to limit how its content is used, it's obviously not in their interests to make things this crippled. So what's going on? I think a key insight is offered by an excellent paper that Columbia law professor Tim Wu wrote a couple of years ago called "Intellectual Property, Innovation, and Decentralized Decisions." Wu's basic insight is that too much centralization of control over any one part of the economy can lead to poor decision-making. In an extreme case, such as Soviet Russia, a government can try to run a whole economy by central planning. But the same principle applies on smaller scales. The modern cell phone industry, with half a dozen competitors, is evolving a lot more rapidly than the old Ma Bell monopoly used to. And on the other hand, there's a lot more innovation going on in the open Internet than locked-down networks of cell phone companies. (Apple doesn't seem about to change the walled garden wireless model.)

The same principle applies to the digital video marketplace. Right now, Hollywood has veto power over innovations in the video space. They've made some dumb mistakes, like charging too much and mandating the use of DRM. Unfortunately, thanks to the DMCA, competition hasn't had a chance to kick in. People can't route around Hollywood by using DVD-ripping software the way they routed around the record labels in the 1990s using CD rippers. So if somebody has a great idea for a digital video product, they have to go begging to Hollywood before they can implement it. But Hollywood isn't run by technologists, so they make bad decisions. And because nobody else is allowed to enter the market without their permission, the whole world suffers for it.

Filed Under: central planning, drm, movie downloads

Surprising Survey Results Reveal That Movie Download Sites Do, In Fact, Suck

from the how-much-clearer-can-we-be? dept

It's incredibly obvious -- to everybody but the Hollywood movie studios, apparently -- just how bad movie-download sites are. When the first studio-backed efforts launched several years ago, the problems were clear. In the following five years, they haven't been fixed, despite plenty of reviews pointing them out. The studios made "protecting" their content with ridiculously restrictive DRM their top priority; delivering a good user experience came in somewhere down towards the bottom. Now, a new study has yet again pointed out that consumers don't like these services, and yet again makes it clear why: poor selection, unreasonable prices, poor quality. Add in the general difficulty in getting video from the services to users' TVs, and you've got a recipe for failure. These are many of the same points that have been made over the download services' lifetime, but that the studios and companies running the services have largely failed to address. It's little wonder, then, to see a site like Movielink, the studios' own download site, get sold at a huge loss since it's going to take wholesale changes to give it any chance of success.

Filed Under: entertainment, media, movie downloads, movies
Companies: blockbuster, movielink