Technology: Post-DVD Hollywood
My colleague Ben Fritz offered a must-read piece Sunday on the major Hollywood studios' efforts to accelerate the growth of (legal) movie downloading and streaming. Finally convinced that the decline in DVD sales revenue is irreversible, they're eager to replace those lost dollars with online sales:
"The days of baby steps on the Internet are over," said David Bishop, president of Sony Pictures' home entertainment unit. "It's now critical that we experiment as much as possible and determine how to build a vibrant market for collecting digital movies."
Underlying such forward-looking pronouncements, though, is an old-school assumption that people want to "collect" movies the way they do CDs and MP3s. The same sort of thinking was on display in January at the Consumer Electronics Show, where an inter-industry consortium unveiled its plans for the Ultraviolet cloud-based rights management system. Ultraviolet helps solve the compatibility problem for downloadable movies, enabling them to be streamed to any compliant device. To the studio executives at the show, though, Ultraviolet was appealing mainly as a way to persuade the growing ranks of movie renters to go back to buying.
No doubt some consumers, such as film buffs and avid fans of certain genres, prefer to buy movies and watch them repeatedly. But I wonder how many people who bought DVDs did so because the convenience was worth the extra price, not because they really wanted to own that film.
Think about the circumstances that have led you to buy DVDs (or, for the minority who have bought them, digital downloads). For me, there have been two reasons to do so: because the kids will want to see a particular movie again and again, or because we're traveling and need a well-stocked portable DVD player to keep the peace. A subscription service that gives me access to an online video jukebox would be a good for the former problem, and a cheap tablet computer with a Netflix app would be fine for the latter. But subscription services are hamstrung by incomplete and unpredictable collections, and we're still waiting for a tablet that costs as little as a portable DVD player.
The point is that I largely buy movies because I have to, not because I want to. And as soon as I don't have to -- because they no longer are more convenient than downloads or streams -- I'll stop paying the ownership premium.
Hollywood, meanwhile, continues to act as if it can make consumers want to buy content simply by making rentals scarce. That's the whole principle behind release windows, which lower the effective price of a movie over time as its distribution broadens. Like it or not, however, the studios are competing with more alternatives to their products than before, including free, pirated versions of all of their hit films.
So while it's great to read that the studios are planning to make more use of the Internet, it would be even better to hear that they're rethinking their assumptions about movie sales. As the rapid growth of Netflix and Redbox indicate, most people are happy to rent films even if it means waiting a few extra weeks or getting stripped-down discs or downloads that have none of the usual DVD extras. Despite their love of movies, these people are not collectors, and trying to persuade them to buy a film may be futile. The studios should instead look for new ways to enhance their products enough to justify a premium price -- ways that accept the fact that many consumers want to watch a film just once before moving on to the next release.
-- Jon Healey
Credit: Reuters / Robert Galbraith