The future of the home video market with a streaming download rental model?

[Elandyll]

The anouncement of Netflix in HD on 360, Tivo and other set top boxes (Roku? - hopefully the PS3 will follow) make me wonder about the futur of the Home Video market in fact.

What is happening:

Netflix is a great service most of the time. For a price between 8 and 16 bucks a month, you have access to virtually an unlimited quantity of movies (physically, 3 at a time in the most popular plan).
Much more so if you get the Online Streaming plan (not available at the $4/month sub if memory serves).

Ok.

Right now, clearly, the quality suffers quite a bit due to the technology, and the HD (waiting to see what's going to happen on new releses with those) is probably going to be a tough one to stream.


Fast forward in 3-4 years.

By then, HD streaming would work probably pretty good, with increased quality thanks to new codecs / larger bandwidth. Still not quite Blu Ray quality of course, and Audio probably only DTS or maybe DTS-HD. The catalogue available (300 films at first) is now pretty large.

BUT now ... for -$9- a month (ok, by then probably $12 with inflation), you'd get -ALL- the movies you could ever want to see, and all new releases available on time, just with a click on your TV, no limitations (except you don't own them, but you can watch em at any time)?

Uh, am I the only one wondering : how would the Home Video market survive a business model like that? (visibly , it sounds great for consumers though) I mean, how would studio ever make any money if they get a fraction of a cent per stream? What would happen of all the brick and mortar stores? Let alone rental, it would die quickly with something like that, except in the most rural of America where you'd still find Red Box kiosks due to the lack of reliable online services, but what of all the Best Buy and co? Would they only sell TVs and Appliances now ?
Everybody gets to be a new Spencers?
Also, how would studios justify financing risky projects, which used to recoup some or all of their cost on Video if they failed, with something like that?


Just some speculative Fiction that make me wonder

Feel free to add your 2cps about this...

[benricci]

Originally Posted by Elandyll

Uh, am I the only one wondering : how would the Home Video market survive a business model like that?

The industry has been doing just fine with the rental model for 25 years, this is simply a more efficient means of delivery. This is really going to more significantly impact rental chains and mail-order rental services, not the sell-through market.

[Septimus Prime]

I can sum up why digital distribution won't ever appeal to me in three letters: DRM.

[Elandyll]

Originally Posted by benricci

The industry has been doing just fine with the rental model for 25 years, this is simply a more efficient means of delivery. This is really going to more significantly impact rental chains and mail-order rental services, not the sell-through market.

Yeah but the difference that makes me wonder here: we were still talking about a per disc fee.
Here, $9 and you are set, unlimited viewings, no restrictions.
I find that ... strange, from a business point of view

I don't think that it would impact Blu Ray sales before another 3-4 years when you could (it's all theoric) have instant, unlimited access to all the movies you would ever want in HD for $9 a month.

Again, and strictly from a business perspective, it strikes me as being absolutely un-sustainable in the long run, if only for the studios, but also for TV channels like Starz, HBO, Cinemax, etc.

But I could be wrong

[Septimus Prime]

Originally Posted by Elandyll

Yeah but the difference that makes me wonder here: we were still talking about a per disc fee.
Here, $9 and you are set, unlimited viewings, no restrictions.
I find that ... strange, from a business point of view

I don't think that it would impact Blu Ray sales before another 3-4 years when you could (it's all theoric) have instant, unlimited access to all the movies you would ever want in HD for $9 a month.

Again, and strictly from a business perspective, it strikes me as being absolutely un-sustainable in the long run, if only for the studios, but also for TV channels like Starz, HBO, Cinemax, etc.

But I could be wrong

I think the big, invisible elephant in the room here is the DRM (Digital Rights Management), which I believe exists to ensure that honest customers have to pay for the same media over and over.

For example, yes, you get "unlimited" views on your downloaded media right now, but what happens down the line, when you get a new computer or a new Xbox or something and want to move your files over? There's a good chance that the DRM won't let you, and you'll be forced to rebuy your media.

Meanwhile, with physical media, you actually get to keep a physical (disc) copy of your media, which will likely still work in future players.

[benricci]

This is still just a rental model. Instead of a per movie fee, it's a subscription platform.

You'd just be renting your favorite movies over and over, and streaming them to your TV. There would be no file downloads or trips to the video store.

This won't replace ownership, it will change the face of the rental marketplace.

[CrabbyAzz]

Originally Posted by Septimus Prime

I think the big, invisible elephant in the room here is the DRM (Digital Rights Management), which I believe exists to ensure that honest customers have to pay for the same media over and over.

For example, yes, you get "unlimited" views on your downloaded media right now, but what happens down the line, when you get a new computer or a new Xbox or something and want to move your files over? There's a good chance that the DRM won't let you, and you'll be forced to rebuy your media.

Meanwhile, with physical media, you actually get to keep a physical (disc) copy of your media, which will likely still work in future players.

Your assuming people want to hoard and store their downloads. Why would they? For a monthly fee you can view any title you want as many times as you like. Maybe the file will be streamed and not stored on your drive. Maybe just buffered to insure uninterrupted play. You need to leave that ownership mentality behind.

[atomik kinder]

Originally Posted by Elandyll

The anouncement of Netflix in HD on 360, Tivo and other set top boxes (Roku? - hopefully the PS3 will follow) make me wonder about the futur of the Home Video market in fact.

What is happening:

Netflix is a great service most of the time. For a price between 8 and 16 bucks a month, you have access to virtually an unlimited quantity of movies (physically, 3 at a time in the most popular plan).
Much more so if you get the Online Streaming plan (not available at the $4/month sub if memory serves).

Ok.

Right now, clearly, the quality suffers quite a bit due to the technology, and the HD (waiting to see what's going to happen on new releses with those) is probably going to be a tough one to stream.


Fast forward in 3-4 years.

By then, HD streaming would work probably pretty good, with increased quality thanks to new codecs / larger bandwidth. Still not quite Blu Ray quality of course, and Audio probably only DTS or maybe DTS-HD. The catalogue available (300 films at first) is now pretty large.

BUT now ... for -$9- a month (ok, by then probably $12 with inflation), you'd get -ALL- the movies you could ever want to see, and all new releases available on time, just with a click on your TV, no limitations (except you don't own them, but you can watch em at any time)?

Uh, am I the only one wondering : how would the Home Video market survive a business model like that? (visibly , it sounds great for consumers though) I mean, how would studio ever make any money if they get a fraction of a cent per stream? What would happen of all the brick and mortar stores? Let alone rental, it would die quickly with something like that, except in the most rural of America where you'd still find Red Box kiosks due to the lack of reliable online services, but what of all the Best Buy and co? Would they only sell TVs and Appliances now ?
Everybody gets to be a new Spencers?
Also, how would studios justify financing risky projects, which used to recoup some or all of their cost on Video if they failed, with something like that?


Just some speculative Fiction that make me wonder

Feel free to add your 2cps about this...

Wait a second, when did Netflix start HD streaming? Did I miss something? As far as I know they only do SD streaming and that looks pretty bad, even on my small computer monitor.

[Elandyll]

They are set to start HD streaming on Nov. 19th on 360 and probably Tivo as well.

It is expected that other devices that offer Netflix (PC, Roku, etc.) would start doing the same shortly after.

Now don't get me wrong, I don't think it will go without hiccups, or we are lightyears ahead in technology compared to what I think most people can get as far as Bandwidth go, but it does make me wonder where we are headed with this "$9 a month gets you all the content you could ever dream of" (minus top notch quality) model...

(P.S: the HD offering will be a mere 300 movies to start with, and with a quality that is still to be evaluated, this thread is mostly speculation. Aka - Once Netflix would gain a significant market ownership, say 50% of American homes, what would prevent them from saying , it'll now be $200/month, etc.)

[Dynamo of Eternia]

Originally Posted by Elandyll

Now don't get me wrong, I don't think it will go without hiccups, or we are lightyears ahead in technology compared to what I think most people can get as far as Bandwidth go, but it does make me wonder where we are headed with this "$9 a month gets you all the content you could ever dream of" (minus top notch quality) model...

I doubt that in the long run there will be unlimited streaming downloads for $9 a month (or even 18).

Despite them branching out more into streaming downloads, Netflix's primary current business model is still movies through the mail. And given the turn around time for processing, mailing, etc, people really can't rent more than a small handful of movies in a month under the cheaper plans. They are just now tacking on the downloads as an added bonus to get people to use them.

But if it gets to the point where streaming downloads are their primary source of revenue, and people can just point and click and watch a different movie each night of the week, then either the monthly fee will go up, or it will likely change to a per-movie cost structure.

That seemingly cheap price will not last.

[Anthony P]

(P.S: the HD offering will be a mere 300 movies to start with, and with a quality that is still to be evaluated, this thread is mostly speculation. Aka - Once Netflix would gain a significant market ownership, say 50% of American homes, what would prevent them from saying , it'll now be $200/month, etc.)

the same thing stopping them from charging more for BD. This is a low price to see if there can be any demand for low quality DL movies. If demands grows to aan actual market (instead of just gaukers) then they will decide what they charge. The issue is that studios want to make their money, at 9$ unlimited they can't exactly pay the studios for licensing.

[Barbie-Shrimp]

Originally Posted by atomik kinder

Wait a second, when did Netflix start HD streaming? Did I miss something? As far as I know they only do SD streaming and that looks pretty bad, even on my small computer monitor.

It will start soon, on XBOX.
link

[Dynamo of Eternia]

Originally Posted by CrabbyAzz

Your assuming people want to hoard and store their downloads. Why would they? For a monthly fee you can view any title you want as many times as you like. Maybe the file will be streamed and not stored on your drive. Maybe just buffered to insure uninterrupted play. You need to leave that ownership mentality behind.

But, when/if this goes into full swing, you won't necessarily have access to any and all movies ever made all of the time.

When movies go 'out of print' or when Disney movies go 'back into the vault', then there will likely be no way of accessing them until the time when they are put back into 'print'.

This means that you have limited time frames to access these movies.

On the other hand, if you buy a disc, even if they eventually stop making it, the disc you bought will still work (provided that you don't accidentally damage it in some way). This is much more preferable to me.

[Marquoz]

The hidden costs will be the bandwidth consumption charges your ISP will slap on you. If they are 20 gb for a decent quality movie, after 10-15 movies you will start getting nailed by the ISP.

Either that or it will be expensive to get a speed with the ISP that will give you good streaming quality. You have to factor that in as well, another 50-100$ for the highest possible speed that so you get good bitrates with the movie.

I also doubt it will be "unlimited" if it catches on because they will have people that crack the DRM on it, and just download 24/7 with a $9 fee. Once this happens, there will be a lot more limitations put onto the download process.