Indiana County Decides Not To Charge Redbox After Public Outcry

from the lawsuit-by-public-opinion-poll dept

Last week we wrote about how prosecutors in Indiana were threatening to file criminal charges against Redbox execs unless the company agreed to remove R-rated movies from its kiosks. The whole thing was instigated by brick-and-mortar video stores who didn't like competing with Redbox's $1 video rentals. However, as news spread about this threat, it seems that the residents of that county raised their voices and let the prosecutor know they wanted to keep their Redbox and its R-rated movies. The prosecutor noted that the standard for whether this was a problem was "community standards," and the community made it loud and clear to him that they wanted the Redbox kiosks to stay:

"It's not an exact barometer -- I didn't take a poll -- but it just seemed pretty clear to me that the community would not be behind the prosecution of this," Stan Levco said during Friday's news conference.

While it's good that he's backed down, I'm still not sure which is more troubling, that he initiated the threats at the behest of competitors, or that public outcry alone was enough to get him to back down.

Filed Under: dvds, indiana, movie rentals, movies
Companies: redbox

Netflix Sued For Revealing Private Info In $1 Million Ratings Contest

from the borked-by-the-bork-law dept

As we've noted in the past, there really is no such thing as an anonymized dataset. There are almost always ways to reconnect at least some of the data to individuals. Now, when it comes to movie rental data, that's especially problematic, due to the Video Privacy Protection Act (VPPA), 18 USC 2710, a special law that was passed after Supreme Court nominee Robert Bork ran into some trouble when his movie rental lists were made public. Last year, Blockbuster and Facebook ran into some trouble over this law, due to Facebook's disastrous "Beacon" offering, that often displayed your Blockbuster rentals. But, what about the famous Netflix prize? After all, that was based on a big "anonymous" set of data. Back in September, we noted that there was some serious concern about privacy associated with that data... and that meant it was only a matter of time until the lawsuit was filed.

Apparently the same lawyer who brought the lawsuit over the Facebook/Blockbuster Beacon snafu has sued Netflix over its contest. It is, of course, a class action lawsuit, filed initially on behalf of an "in-the-closet lesbian mother" who claims that her video rental info was included in the anonymous data, and that it could be used to "out" her. While I agree that the data likely wasn't very anonymous, this lawsuit does seem like something of a stretch, in the typical class action format of a lawyer reaching pretty far in hopes of getting a big payout. I do have concerns about Netflix releasing a big dataset, but this lawsuit is just a pure moneygrab.

Filed Under: anonymity, anonymous dataset, class action, movie rentals, netflix prize, privacy
Companies: netflix

Blockbuster, Netflix Found Not To Have Infringed On Patent For Notifying You Of The Status Of Your Rental Queue

from the how-did-this-get-approved? dept

Slashdot points us to the news that a lawsuit against Netflix and Blockbuster for patent infringement has been dismissed by a California court. At issue was a patent, 7,389,243, that is for a method for alerting users to the status of their rental queue. Read through the claims and look at the drawings and try to figure out how such a patent was possibly approved. It's patents like this one that make people question what patent examiners actually do. So it's nice to see the patent holder sent packing, though you have to wonder if GameFly, who had previously settled a lawsuit over the same patent is now regretting that decision.

Filed Under: movie rentals, notifications, patents
Companies: blockbuster, netflix

Once Again, You Don't Compete With Innovative New Services By Being Lame

from the in-case-you-weren't-paying-attention dept

A couple years back we pointed out how the entertainment industry kept trying to "compete" with new (legal and not-so-legal) online services, but always seemed to do so by being incredibly lame. And, you don't compete by being lame. It appears that this message still hasn't quite gotten through to some yet. With the movie industry facing new challenges concerning online distribution and innovative services like Redbox, here are two stories of old school players trying to "compete" but missing out on the part where they make their offering compelling.

The first comes from Josh in CharlotteNC, who points out that Blockbuster is trying to compete with Redbox and its widely available kiosks (and Netflix with its larger library of downloadable movies) by setting up kiosks in its stores where you can download movies. But... you can only download them to proprietary SD cards, and then it can only play on special proprietary hardware that participants in this program need to have. How is that a better experience then, well, anything? If you want a movie that can be downloaded, why not just let people download it at home? Why have people go out to download it?

Then we have a story sent in by Loydster, about how Sony Pictures is offering owners of new Sony/Bravia HDTV's the chance to download and watch the movie Cloudy With a Chance of Meatballs before the DVD release. While that is actually a nice tie-in between Sony's content business and its consumer electronics business, Sony (of course) has to screw it up. That's because the company thinks it can charge $25 to download the movie. The company seems to admit that it's charging this much because it doesn't want to piss off its retail partners (like WalMart), but it's difficult to see why it's worth doing the project at all if the pricing is going to be so ridiculous.

Experimenting with ways to compete is good... but being so obviously lame is not.

Filed Under: competition, downloads, kiosks, movie rentals
Companies: blockbuster, sony

Can Blockbuster Turn Its Stores Into Destinations?

from the worth-a-shot dept

Blockbuster clearly knows it's facing mounting challenges to its business. The company has been mostly outplayed by Netflix in the online rental market (though, Blockbuster's competing offering has done much better than some others who have tried to play the Netflix game). The company's financials have been a bit of a mess, but it's still planning for the future -- and that includes recognizing that the market is changing drastically, and it needs to change with it. While no one knows if it will be able to survive these changes, it's still rather refreshing to at least see the company try to meet those challenges head on. Recently, it's talked about a strategy to create its own set top box as well as put out an unsolicited bid to buy Circuit City. While both ideas have some problems (the Circuit City acquisition would be particularly hard to pull off for example), it does show that the company is trying to branch out.

What may be even more interesting, though is that Blockbuster clearly recognizes that it has an asset in its brick-and-mortar stores that Netflix can't easily copy. While some may say that the stores are a liability, that may depend on what Blockbuster can do with them. Already, it tries to leverage the stores in its online rental service (allowing you to return movies to the stores and immediately pick up a new film as part of your subscription), but as Gizmodo points out, it's also experimenting with making the shops into real destinations, rather than just rental shops. It's playing with a few different "formulas" to see how people respond -- including setting up a bar where people can buy soda or coffee and another where there's free WiFi and people can play video games on a big screen. It's also testing out setting up a store where shoppers can buy consumer electronics. You can consider that last one a test run for what would happen if the Circuit City deal goes through.

Turning the stores into more of a destination, with a variety of options on ways to make money off of the customers is a necessary strategy -- though, it's hard to pull off well (so, at the very least, it's good to see the company experiment before rolling something out nationally). Sam Goody, the big record store chain, tried to do something similar a few years back, and it didn't work out all that well. A large part of the problem may be really convincing people that it's a worthwhile destination. This is one case where the company's reputation matters, and Blockbuster's reputation isn't great. Still, this is the right strategy -- though, success or failure is very much dependent on the execution, which isn't exactly Blockbuster's strong suit.

Filed Under: destinations, movie rentals, retail stores
Companies: blockbuster

Does Apple's Streaming Movie Rental Service Make Sense?

from the not-as-much-as-you-might-think dept

While most of the discussion following Steve Jobs Macworld keynote this morning was targeted on the Macbook Air superthin notebook (which does look pretty cool), some of the other announcements coming out of the keynote were potentially a lot more interesting. The first was Apple's Time Capsule offering, which seems to have gotten lost in the hype around the other announcements. Sticking a big (500GB or 1TB) hard drive on a wireless access point may not seem like a huge deal at first, but it is an indication of how increasingly everything that we do is networked. Being able to separate storage from your computer makes for some interesting possibilities. Combined with the Macbook Air solution to do CD installs (mount a different drive on the network, basically), and you begin to see how Apple is making it easier to separate out the components of what used to be considered a computer, and make them all accessible via the cloud. That doesn't mean that any individual solution will necessarily be successful, but it does indicate the direction things are heading in.

The other announcement that did get quite a bit of buzz was the very much expected announcement that Apple will begin renting films via iTunes. It appears the company has done a lot of smart moves here (many of which it probably learned after seeing what legions of earlier attempts in this space got wrong). It signed deals with all the major studios. It got agreements to allow online rentals soon after the DVD was released (1 month later, which is still too late). You can easily watch the movies via your TV if you have an Apple TV (perhaps a big if). You can transfer the movies to other (Apple) devices. They can start playing soon after you start downloading. They're offering high definition movies, which will certainly appeal to some people (and should be extra worrisome for the folks betting on the success of next generation DVD systems).

However, it's still based on a one-off rental model, with similar prices to what's been tried before. Time and time again, we've seen that models like that later get trumped by subscription services -- which is why it's not surprising to see Netflix beefing up its own service by making it an "all you can eat" plan combined with efforts to get those movies on to television sets. And, of course, a rental model is fundamentally based on DRM systems to make the movie go away at the end of a "rental" period. Rentals make sense for physical goods, when you are returning the good at the end so it can be rented out again, but they're an artificial construct in a world of digital goods. It may work initially, but it leaves Apple wide open to challenges from others down the road. On top of that, it shows Jobs' rather conflicted stance on DRM: he's against it for music, but for it when it comes to video. It's also a bit surprising that the major studios all bought into this, as they've seen how Apple's DRM system in the music world made it much more powerful, leading to the current backlash from the recording industry. So, it's a good start, but it falls back on the wrong business model for long term success.

Filed Under: backup, movie rentals, streaming movies
Companies: apple

Things To Like And Dislike In The Plan To Build Netflix Directly Into Your TV

from the good-for-netflix,-but-for-everyone-else? dept

Various authorized movie download sites have been flopping lately due to various reasons -- but one of the big ones is the continued difficulty in actually being able to watch the downloaded movies on your television. In many cases, part of the problem is the DRM that many movie download sites use, but an even more fundamental problem is that there still isn't a decent link between most household computers and household televisions. Apparently, Netflix is trying to solve this. Late Wednesday, the company announced plans to get various consumer electronics firms, starting with LG, to build technology directly into TVs or other set-top boxes that will allow Netflix subscribers to download and watch movies directly on the TV. Netflix had considered building its own branded set-top boxes, but wisely reconsidered. Given the proliferation of set-top boxes, and the dismal failure of other companies that have tried to go that route, it makes sense to get consumer electronics makers to build the tech directly into their own offerings.

Initially, from Netflix's perspective, this plan makes a lot of sense. It's already been experimenting with streaming movies to subscribers on their computers (at no extra cost) for about a year. Netflix also has the name recognition and clout to get consumer electronics firms to go along with this plan (and it wouldn't be surprising to see a few other CE companies fall into line quickly behind LG). However, that doesn't mean this is the best result for consumers (or even for Netflix in the long run). By building in a proprietary solution that effectively only works with Netflix, buyers won't have much of a choice. They won't be able to compare other movie streaming/downloading services via their TVs and will have to effectively make a choice and stick with it for the life of their TV. What would have been a lot more interesting and better for everyone (perhaps other than Netflix) would have been for the CE companies to agree to a standard by which various movie distribution firms could have streamed movies directly to TVs, and then allowed those companies to offer competing services. I don't want to buy a DVD player that only plays movies from Netflix, so why should my TV only play streaming videos from Netflix?

While it may initially seem like a win for Netflix to lock out the competition this way, that may not be the case. If Blockbuster is smart (a big "if") it's currently running around trying to get CE companies to align with it, instead. Then we have another standards battle situation, where people decide not to buy any such solution until everyone agrees to play nice (witness the HD DVD standards battle that has greatly slowed the growth in next generation DVDs). If there were a standard that others could plug into, then it would encourage more people to upgrade. However, if the competition is between a "Netflix" device and some other device, it may make people wait to see how the market really shakes out.

Filed Under: internet, movie rentals, streaming video, tv
Companies: lg, netflix