Downloading Movies.. the 1 thing

Everyone wants to sell downloadable movies. Which is a good thing. Laptop travellers and PDA folks who like to watch movies wherever they happen to be will certainly benefit. Downloadable movies are also a way to kill time in the office. Its easier than picking up a book between phone calls.

The biggest business impact of downloadable movies wont be on the movie business, it will be on the paperback book business. But thats a post for another day.

This is a post to let you know about the 1 THING about downloadable movies that the prognosticators who think downloadable movies will replace or severely impact that retail sales business and to a lesser extent the rental movie business are missing.

The 1 Thing is that you can only download 1 Thing at a time. Sure, technically you could open multiple windows. Sure, you could also go to Moms computer and hope the DRM on the movie allows you to move it to the PC or device you want it on. But the sobering reality is this. You can only download 1 PC at a time.

Which means, there ain’t ever going to be a “Christmas Download”. THere is never going to be a card under the PC saying ” I just downloaded you 3 of your favorite movies”. Its not that it couldnt happen technically. Its the equivalent of saying “I just tied up my PC for 3 frickin nights to do this for you, it aint worth it”. Its also the equivalent of saying “I downloaded these movies, and you already know it because you were complaining about the speed of the broadband connection to the house while it was happening”.

Easier to download a movie ? Maybe. Easier to download 2 or 3 movies than going to the store to buy or rent ? Never. Never, ever, ever. (Which means not in the next 5 years).

The important business lesson for movie marketers is to make sure there is absolutely no confusion this Christmas or the next many Christmases that downloading a movie is an option to buying the store. YOU WILL KILL YOUR BUSINESS. You will upset customers. Upset retailers, and sell fewer movies. Thats usually not a good business opportunity.

I think most consumers will figure it out quickly that the hassle factor isnt worth it for buying movies for other people or more than 1 movie for yourself.. But I can assure you , smart studios will be all over making sure that retail is and remains the primary outlet and that movie downloads over the net is a niche business and nothing more for a long time to come

Downloading movies is a decent business for an aggregator. They have to be there. THere is some money to be made selling for laptops and PDAs. Downloading as a retail alternative aint gonna work

78 thoughts on “Downloading Movies.. the 1 thing

  1. \”Downloading movies is going to destroy film and television..\” I somewhat disagree – television didnt destroy radio broadcasting. Besides you rather buy a DVD or music CD (with all the art work, box design etc) of movie you like than store gigs of videos on you hard drive. Sure downloading is good but it\’s not absolute alternative.

    download movies @ http://kinomex.com. :))

    Comment by ken -

  2. it seems to me that studios should move fast. if they would not they loose the battle for those who lease movies like http://www.netflix.com or sale like http://www.coplace.com

    another problem that you will never stop torrents

    Comment by saman -

  3. I do it all the time – begin before I go to bed and wake up with multiple movies…

    Comment by BloggingHaroon -

  4. In regards to post #34, I couldn’t agree more.

    Comment by Jason Brown -

  5. Mark,

    I could not agree more. Most high speeds connections in the US are neither high nor have speed (I know redundant). Currently many homes have 1.0 MPS. Some have 2.5 and if you pay some outrageous some, you could tweak it up to 5.0. At this current rate, as Mark points out, it takes hours to download. Even when we finally get to 50 MPS or even, 100 MPS, we are talking years and years off. The average consumer also does not have the technological comfort with downloading and won’t until the next generation starts earning real money. One night, I tried multiple downloads of iTunes videos and only got part of the ordered downloads to my computer and none to my iPod. It even erased what I had previously downloaded. The system could not seem to handle multiple downloads that were ordered even thought they download one at a time. I spent two hours on the phone with Apple trying to recover my money, work it out or both. At the end of the call, the very nice rep told me to go to my local Apple store and wait an average of two hours to have assitance. Sorry folks, but those of you on this blog may put up with that becauuse you have a vested interest in technology…the average American absoltuely positively will not do it! Now we need to think about how to reinvent the video retail store to be a fool proof down load site, a socail networking center to play video games/music or just grab a cup of java to discuss and play with the latest tech gadgets! Mike Kelley, NY, NY

    Comment by Michael Kelley -

  6. On another note,

    “Downloading movies is a decent business for an aggregator. They have to be there. THere is some money to be made selling for laptops and PDAs. Downloading as a retail alternative aint gonna work”

    As a matter in fact, downloading as a retail alternative is already happening. Do you know about Bitorrents and other programs that make downloading movies as simple as one click and it’s downloading? Also, why downloading has made movies so popular is that ‘the development of more advanced video/audio compression technologies that allow the movies to be compressed to much smaller sizes’ make downloading and waiting time go down.

    The installation of high speed broadband connections in many homes today have also made downloading much faster and convenient for household members. Also, the availability of free movies online just keeps people at home and comfortable, waiting to watch movies just one click away.

    Downloading movies is the best new thing.

    -J

    Comment by Jason -

  7. Mark,

    I feel that you are completely wrong in saying that downloading a movie is a hassle. While connected to a constant T3 line, I am able to download one movie at 3 MB/SEC. This means that for a 700 MB movie I can download it in minutes. If I were to download multiple movies at once, it doesn’t nearly take as much time as you make it out to be. Even by using a standard home, cable modem, I can leave my downloads on over night and wake up to three fresh copies of movies I can watch or even give as a present to my friends.

    One just needs to know how to properly manage their bandwidth, and even so, by using smart programs, they will manage it for you.

    Downloading movies may be a hassle for you, but it is definitely convenient and hassle-free for those that know how to use their programs efficiently.

    People should be able to download movies with no problem. If I can figure out how to do it, and download any movie I want at any time, how can it possibly be a hassle?

    -J

    Comment by Jason -

  8. I think you just stumbled across the next textbook revolution. As display screens become more user friendly, we will see downloaded books triple. The trick is to make an incentive for people to chose downloaded versions versus print version. I have recently discovered a website called http://www.freeloadpress.com. They are onto something big and would like to get in on it. They allow free downloads of textbooks with limited commercial advertising. However, the material is not influenced or subjected to editing by advertisers.

    Comment by Matt Gruber -

  9. Until there’s a STANDARD widescreen format and ALL HD broadcast are in a 1.85:1 ratio, I will never download a movie or subscride to any HD channel. I won’t even buy a widescreen TV. It’s totally stupid that you still have black bars on the sides and tops even after dropping $4000 on a sweet TV.

    Come on Cubes…I’ve only asked you why the film and TV industry can’t agree to one format and you keep ignoring the question. If I’m going to drop $4000 on a 16X9 TV with a 1.85:1 resolution, then that’s what I want to see on that TV. I don’t want stupid bars on the top/bottom or sides of the freaken TV. I also don’t to stretch and distort the resolution on the screen so that I don’t have the bars. Give me a break people!

    Comment by John Hawkins -

  10. Mark,

    You’re missing a big point – downloading is already a huge success:

    1 – Cable companies are offering PPV for cheap, it’s going to run on the same system as the net before too long (of course you don’t want to cannabalize the theaters)
    2 – Torrent networks deliver content at fantastic speeds not to mention that the HD compression techniques are getting better and better by the day (see the porn industry). USE THEM DAMMIT!

    Mark, stick to your own philosophy and give the consumer what they really want.

    Since I can’t respond to your Movie Problem anymore here’s a couple obvious freebies for ya:
    1 – Tuesday is half price night (go to the dollar theaters and see how packed it is by dropping the price only $0.50)
    2 – More movies in 3-D and IMAX (animated films will continue to set the standard as ‘real’ still costs too much)
    3 – Use proactive phone marketing (see phone calls from Samuel Jackson – also if I was you, I’d enter into this space)
    4 – Discount to all MySpace users (set up links to Fandango/Moviefone)
    5 – Collaborative works – everyone wants to see a movie that they had some part in (even if it was a vote)
    6 – Film at multiple locations and use tons of extras
    7 – Have users text in a response after the movie
    8 – Have interactive movies broadcast over broadband (ever see a live concert at the movie theater? Check out Prince)
    9 – Look for additional revenue streams at the theater (bands have merch)
    10 – Have the actors and actresses do random meet and greets at the theaters
    11 – Tap into the sequel markets more
    12 – Have episodic movies
    13 – And MY FAVORITE – set up an MLM structure :)
    14 – Sell DVDs after the movie

    YOU HAVE TO MAKE PEOPLE FEEL THEY BELONG WITH THE STARS AND THAT THEY ARE JUST AS IMPORTANT

    There’s a million ways to increase your revenue and get people off of their asses to the theaters. All legit solutions at low cost….jesus if snakes on a plane can make money or Talladega Nights (fuck me)

    People love being around other people – otherwise we’d just all drink beer at our own house instead of strapping on beer goggles. Capitalize on the socializing before and after the movie.

    good luck
    Rio

    Comment by Nic Rio -

  11. Well, I have some ideas for your Movie Theatre Challenge.
    I know you have probably lost or wont read all the inputs, but, what the hey.
    1: The big stores, WalMart, Best Buy, and others offer discounts on DVDs bought the first week. The theatres, instead of competing, should offer a rebate when you go to the movie, and then, say, $5 off the purchase of the DVD. This would benefit both markets, and if the customer doesnt like the movie enough to buy the DVD, no loss, and the theatre at least gets the sell. The tickets already have the name of the movie on them, so no increased technology, or cost to implement this rebate or discount when purchasing the DVD.

    2: Another would be for the theatres to offer sort of a raffle, the tickets are already numbered, so they could give away a years free movie visits, 12, one for each month to the lucky winner. Just advertise on the screen for a month the number of the lucky winner, and that also entices people to buy more tickets to more movies just in hopes of being the one to win a 12 month free pass. These two ideas are totally in line with operations and technology already in place.
    I have a few more, but these hopefully will get your attention. Hope to hear if youve read these.

    Comment by Lynn Hughes -

  12. My internet connection sucks…. can’t download any movies or music:(
    http://www.intera.ee/vahesein-vaheseinad.html

    Comment by Jeremy -

  13. I agree with most of the responses arguing that you are wrong about it being too much of a hassle to download movies – as long as they cost 25USD a DVD we’ll be downloading them.

    However, this statement is so so true (and may actually get me to read your RSS more often)
    “The biggest business impact of downloadable movies wont be on the movie business, it will be on the paperback book business. “

    Living in China we get basicaly tons of tv series box sets, new movies etc for basically nothing (a buck a DVD). This, along with being able to download movies to my PSP, has meant that my reading has pretty much dropped to one tenth of what it used to be (And I am – was – an avid reader).

    now instead of curling up to a book at night, or reading a book on the plane, I bring my PSP with me or catch up on the last episode of surviror before falling asleep. I can now watch them when I want to and am not forced into the choice of crappy tv at 1am in the morning or a good book.

    Comment by nicolas -

  14. Brooke A. Wharton, pro-entertaiment entertainment attorney plants a post. Thanks to the ability to download movies, woe are movies!!! Thanks to Napster, woe is music!!!

    Nice try, Brooke Wharton, entertainment industry shill.

    Comment by David W. -

  15. Samsung was demonstrating its G4 mobile technology this week in Korea. They define G4 as 100Mbps in motion, 1000Mbps static. The demo was to view 32 simultaneous HDTV channels while having a voice conversation. According to CNet they expect it to be commercially available in 2010.

    Comment by Ed -

  16. you just got mentioned on KCRW in a discussion about Snakes On A Plane based on your blog post!

    well played.
    well played.

    Comment by joeclip -

  17. ignoring the question about whether such things are possible re: downloadable movies (and assuming one had figured out/bought out a workable method of quasi-immediate delivery) and also ignoring netflix’s market position (as they will likely be contractually unable/or at least very slow to change to a digital model), who would be the best partner such a download delivery company could have in this space? imdb (and, in a slightly different but synergistic way, its parent, amazon) seems like the obvious choice…

    Comment by nonattender -

  18. Xmas download: Hey, I just brought you 3 free downloads to make at your convience. This way you don’t have to worry about mailing any of those movies back. You know that services that you pay $15/month for and never use because almost everything is available on demand anyway… Well these downloads are for the 3 movies you can’t on demand.

    Works for me :O)

    Comment by Sports Bettor -

  19. Agree.

    Without big changes in bandwith downloading movies is a non starter.

    Comment by Stuart -

  20. This is what I want:

    A DVR sized box rented by cable companies that allow you to queue up movies to download (a la netflix’s queue)- pay $20/month to have 3 downloaded movies on your box and watch them whenever. When you’re done, the next movie in your cue downloads automatically. It’ll be remotely accessable so you can load up your dvr from the office. I’m at work, I want to see Spiderman with the wife and kids tonight, I queue it up on the website and it downloads in 2-3 hours while I’m still at work. Or better yet, its already cached at my cable companies’ servers and they stream it to me from a local server.

    My guess is that apple will probably come out with a mac mini sized DVR with WiFi that is purpose built to connect to itms. The “subscribe podcast” functionality in iTunes is similar to what I’m describing anyway.

    As for the christmas download, I sure saw more than a couple of Christmas ITMS gift cards last year and I’m sure there will be more this year. Why download them yourself when your kids can do it for themselves?

    The download business will kill the mass market retail business within a generation. Only those who are stubbornly luddite will shop retail for movies within 30 years. Tower Records is in chapter 11, and not even a generation has passed since napster.

    Comment by JamesK -

  21. Mark,

    I have to disagree, and I’m by no means a computer or internet expert.

    I can watch a movie clip on youtube that’s 10 minutes long, and it pops up in 5 seconds. Is it really going to take that much time to watch something that’s 90 minutes long?

    I watched an hour long Google video of Charlie Rose interviewing Warren Buffett (awesome interview BTW). It took 6 seconds to come up. It’s not going to be that hard to get movies to play on your computer. That’s the laymans view.

    Google video and these guys all pass the mother in law test, or any test of simplicty.

    Retail movie stores aren’t going to go away (any more than book stores went away after Amazon).

    Still, downloadable movies will just be a niche business. The family isn’t going to gather around the computer to watch Spiderman. Nobody is going to invite their friends over to watch something on their laptop. It isn’t like music at all.

    Comment by John -

  22. I’ve tried to send Mark a question on the Mavericks page, but it doesn’t work. Is there another site to ask him a question?

    Comment by Deb Erickson -

  23. Guess I was wrong Walmart does think it is going out of business (see today’s article in Business Week below). They should really think about putting gravy on their menu. I guess there will be only one winner and 2nd place is not good enough. I wonder who will go out of business first, Apple or Walmart? Somehow I think they will both do fine and so will others that decide to sell TV shows and movies online. BTW if they can’t figure this out have them give me a call (or read the comments in this post) there are a lot harder problems to solve.

    Wal-Mart and Apple Battle for Turf
    http://www.businessweek.com/bwdaily/dnflash/content/aug2006/db20060831_806225.htm?chan=top+news_top+news+index_businessweek+exclusives

    Comment by Trevor Doerksen -

  24. No doubt the download business won’t kill the retail business. These kind or arguments remind of seatbelts killing the car business or computers making teachers redundant arguments. Do things really happen this way? Did digital cameras kill the camera store business? Did DVD kill the rental business? Oh yes business changes – there is no doubt about that. Look, you can upload digital photos to walmart and even my mother-in-law does it.

    About mother-in-laws. Well somebody brought them up. Today my mother-in-law does not download music or pictures or books or illegal movies. Does anybody really care? I do, because I do like the gift certificates and gift cards she gives me instead. And if my mother-in-law ever did anything illegal I would be pretty surprised. But I do know she would probably put a nice movie gift card under the Christmas Tree for me – if I can convince her I deserve it. She knows my iPod is deserving. And just wait until she can buy stuff for her grand-daughter for my iPod and my laptop.

    Mark (and others), you’re right this is a bad idea, I will have to buy my 5yr old her own iPod, and then she will get mugged at school, or beat up in the park. The iPod will be stollen, that expensive movie collection (backed up on her new computer) lost (well kinda), and she will then be as scared of small white headphones as she is large black dogs. Then my mother-in-law will not be happy.

    Seriously, what business doesnt want to charge extra for the gravy. Not everybody wants the gravy, but some do and they will pay even it means waiting a couple of minutes extra. So charge people a couple of cents for gravy, instead of people getting the illegal gravy somewhere else. OK the metaphor failed. What are we scared of? Some people are willing to pay and wait to get gravy bottom line. BTW gravy is very bad for you. I stay away from gravy and large black dogs.

    Should movie marketers also tell their retailers that their line-ups are too long and the guy on the street out front sells the same (well kinda) product for less? Should movie marketers upset their retailers by telling them that there are free versions of the same thing on the Internet. Of course they dont need to. Everybody knows that already. By the way, did anybody see that 5 movie pass in the line-up at Wal-Mart the other day, my grandmother (mother-in-law hasn’t been happy since the iMugging) bought me one for Christmas. I cant wait to download some movies. That would be nice! Is that a retail alternative? Would that kill Wal-Mart?

    Comment by Trevor Doerksen -

  25. Mark,

    It might be time to upgrade your 28.8K modem.

    Downloading movies (even with high resolution) doesn’t take as much time as you seem to think. Plus, it doesn’t tie up that much of your computer resources especially since in a few years, 64-bit systems will be the norm.

    Comment by Karmina -

  26. Mark,

    I think you hit on the pulse of what it holding back (or more accurately, stifling) so many budding and promising industires and business ventures,and I think a lot of money is going to made by people who like Dell is going to eliminate the hassle factor across a wide range of industries.

    I also think that the other factor bearing upon the movie download business is that – it is in many instances taking away the very part of movies we love – watching it with other people and in most instances a pc or laptop screen does not lend itself to a group viewing (affiming our sense of belonging and togetherness) . And that’s why we love watching movies on a tv screen.

    Brad Ocean

    http://www.the-note-book.blogspot.com

    Comment by Brad Ocean -

  27. Nice theme, good activ on this post!

    Comment by Fokk -

  28. Besides, Internet can give them other opportunities: creating forums and blogs, mailing the TV shedules, downloads of sets of programs, selling videos of the soap operas ans so on… There are a lot of things that they can try online!

    Comment by Led -

  29. I think that of all the movies I’ve bought on CD, I’ve watched my favorites, maybe twice. What a waste of money. Nobody watches even a great movie more than twice. Oh, except Caddyshack. Not like music. Give me “Try and Love Again” off of Hotel California til the day I die. Movies are great, but one time is about it.

    Comment by Wally -

  30. Do you actually read all this comments?

    Comment by Alex -

  31. If the movie is in good quality you will download it for a long time. I think it will be better to read books. There is much more wisdom

    Comment by Mike -

  32. “Easier to download a movie ? Maybe. Easier to download 2 or 3 movies than going to the store to buy or rent ? Never. Never, ever, ever. (Which means not in the next 5 years).”

    Depends on the quality, I know you push HDTV as the future (I agree) it has not reached critical mass, yet FiOS and other 2Mbps+ connections are common. The average viewer is likely to get a faster net connection before shelling out the $$$ for a HD disc drive (PS3 could change that)

    As for “YOU WILL KILL YOUR BUSINESS. You will upset customers. Upset retailers, and sell fewer movies.”

    Upset retailers? perhaps, but the big box stores don’t really care about your download services, they just want your product on their shelves for as low as possible. The mom & pops/video chains will hate it, sure! let them, in the end you’ve got a choice of how you’re going to run the business. You can either cut down the supply chain and make things more efficient or you can ignore the future and wait for the stores to force your prices down when they realise they’re your only distribution outlet.

    In the end, the big boys can do whatever they like. Do you think the struggling retail outlets would cut off Viacom?

    What’s odd is this argument seems to mirror the issues of shortening the theatrical window, and you were on the other side.

    Downloading hasn’t reached critical mass, but give it 2 years tops. Telco’s & cable have got way too many reasons to go all out to get the consumer’s entertainment dollar.

    Comment by Adam Cains -

  33. Wow,as has already been mentioned,me thinks youre wrong.

    Lets just say I know from experience that the scenerio youre envisioning would only be with literaly DVD quality movies,at worst.With highspeed servers I dont think even DVD 4gb and up would be much of a problem.

    Yes people who use torrents download 4+gb movies mark! All the time in fact! And you know why it isnt a problem? Becuase you can limit speeds so it dosent bother your connection proportionately to the amount of time you are willing to wait.Trust me if it wasnt illegal I would have setup my own biz long ago marky mark.

    Comment by tg -

  34. Can you imagine tearing into your Christmas presents to find a DVR+R that *might* play in your DVD Player with the name of the movie written in Sharpie on it? “That’s Hot…”

    I agree, I don’t think we’re there yet, especially as a gift option. Good post.

    -Steve (http://lazycomic.blogspot.com/)

    Comment by Stevie D. -

  35. thanks for this information

    Comment by Taras -

  36. Nowadays in the Internet you can get everything. It’s easy and that’s why so popular.

    This is a future and I agree that it can destroy television in a present state but don’t you think that television will come to a next level of development and will broadcast through Internet for Internet- maniacs?!

    Besides, Internet can give them other opportunities: creating forums and blogs, mailing the TV shedules, downloads of sets of programs, selling videos of the soap operas ans so on… There are a lot of things that they can try online!

    Comment by Julia Dorofeeva -

  37. DivX Inc. and Google Inc. today announced that the companies will work together to make Google Video accessible on consumer electronics devices, enabling consumers to take their video and movie downloads with them anywhere they go. “Our goal with Google Video is to make the world’s video content accessible to people, and working with DivX is a very important step toward extending that service beyond the PC to consumer electronics devices,” said Susan Wojcicki, vice president of product management at Google Inc. “We want to reach a point when consumers can easily access the content that is important to them from Google whenever they want, and enjoy that content on a variety of devices.”

    Comment by Store -

  38. If I am reading blogs, I have extra bandwidth that a torrent client could (and should) scale up to utilize. But if I switch to watching YouTube videos, then the torrent client should scale back.

    Comment by Vav -

  39. I think the possibilities of movie downloading depends more on compression techniques than bandwidth, because compression techniques are more realistic and implementable, whereas laying additional fiber or finding additional bandwidth via other mediums is much more time consuming and costly.

    I think there is a huge market opportunity for somoone to develop and patent a better compression technique so that movies can be more easily downloaded, not take up so much bandwidth. If everyone could download movies quickly, i think the potential for the market could be huge, not just a niche.

    Comment by Gary -

  40. WHAT HAPPENEND TO THE WINNER OF THE MOVIE CHALLENGE? HUH… WHO GOT THE JOB…?

    Comment by jeff -

  41. Well, you know, I have around 300 movies, never bought one, downloaded them all. Lucky for me, I use torrents or direct connect clients, and I didn’t pay a dime. You should try this. Unfortunately, they say this is breaking the law. If you don’t want that, and still want to watch a movie or see the news, or watch some sport, you could go to one of the websites that offer free online television, like http://www.tevootv.com

    You should not pay if you can get it for free.
    Regards, :)

    Comment by Richard -

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    Comment by call2biz-blog -

  43. I have 10/1 Charter service and it is quite quick. I dl a movie in about an hour to 45 minutes.
    Additionally, if you use a torrent like some of the ones mentioned you can connect with many different peers.
    However, it still along way from Video on Demand. Most the time though I feel like once I get my wife ready, get in the car, drive to BB, pick out a flick, drive back home, make any other detours that she finds along the way, get home get settled and put the movie in, I could have already downloaded one.

    Mark,
    This might not be the best place to ask this but since we are on the subject of video dl. I am working on a project that will nearly eliminate piracy. I am including software, media, information (ebooks) and any other copy right protected material. We are looking for advisors in the industry and I would like to send you a copy of our business plan and get your opinion. How could I go about doing that or would you be interested?

    Comment by Matt -

  44. I disagree that downloading movies can’t be a great gift. I think if you package access to a downloadable movie in an online package(see http://www.prezzle.com ) then you have your gift. Albeit virtual. In fact, it’s a whole new market that allows you to send a movie across the country, but you ensure they can’t open it until the date you specify.

    In fact, Prezzle’s already doing it with iTunes. I can only imagine movies are next.

    Comment by techguy -

  45. My boys and I would look for the DVD movie sales on sundays. Now we have fun downloading them off of the web. Its not uncommon for us to get 2 or 3 movies at once. Typically we can have a moview donwloaded in 1-2 hours. It beats fighting the traffic at the retail places.

    Comment by Chris Dowell -

  46. The majority of movies that come out these days suck anyway.

    I wouldn’t even waste my timr downloading a movie even if it was 10 seconds to watch it on a PC. Thats not entertainment.

    Besdies, on the rare occasion a good movie come out, you can just wait a couple months and pay like $1 to rent it from a video store or if you are really patient, just wait for it to come out regular TV. Who want sto watch a movie on their PC anyway. How uncomfortable.

    Alot of you technology people make mountains out of mohills. Sometimes it needs to be done, but often times it doesn’t. The only times it pays to do that stuff is when you are burning a Playstation or X-box game.

    Comment by JR Ewing -

  47. I think that they should sell movie downloads without DRM. I personally think MPAA should have licensed Scour.net back in 1999! I think they should have adopted divx, AVI, Quicktime, ASF, MPEG4, and the other formats quicker. I think that they should make legal torrent servers. Also, I think they should license to KaZaa, LimeWire, BearShare, Blubster, and many others too. The movie studios are missing a market here!

    Comment by Stephen -

  48. Well it’s still a very new thing in Australia but there is more news coming out about some of the big investors backing the small upstarts.

    I have written a few articles about this development and of of the people involved in the industry commented that the larger content would drive consumer demand for faster broadband.

    Comment by Crazy Jim Smith -

  49. Hi Guys.

    Well it’s still a very new thing in Australia but there is more news coming out about some of the big investors backing the small upstarts.

    I have written a few articles about this development and of of the people involved in the industry commented that the larger content would drive consumer demand for faster broadband.

    Comment by Crazy Jim Smith -

  50. Hey Mark,Even for a working stiff time is important. With all the hassels of downloading and possible crashing , Its easier to go to Blockbuster, then you download it ,put it on a disc, have to make sure its right, blah blah blah, three bucks? Come on everybody. LOL The news paper is a whole different thing. Its kind of personal time. Maybe its a cultural thing, the way we were brought up and may change but no where in the near future.Its ok to check a certain story online but thats about it.

    Comment by Frankie from Lawnside -

  51. Has anyone checked out the new downloading service called Vongo? I took advantage of their free 2 week trial, but most of the movies available for download suck.

    Comment by fast eddie -

  52. Poo Poo DRM. How diffrent is movies on demand on my cable or movies on demand on the internet. Not Very. It will be hear shortly.

    Comment by Dirty Muffin -

  53. as a Netflix heavy user averaging at least 6 titles a week on the 3 at a time package, I don’t like the concept of downloads. Why? Because there’s no way they’re going to have an monthly fee plan. It’s all going to be movies by the title or the length. That’s the reason I stopped going to videostores and went with netflix. Do you really think Netflix is going to give me unlimted downloads for a monthly fee? Can they afford a downloading maniac? Am I really going to download as many films as I get through Netflix? NO. The nice part about buying a DVD is that I can always loan it out to a friend when I say, “You gotta see this.” If I download a film with all the DRM stuff, I have to loan them my computer. Forget that.

    All video downloads do is put the burden of quality on the consumer. If your movie is messed up, it’s your hard drive’s fault. You think they’re going to give you a refund or exchange if you get a nasty glitch? You just spent $20 for a messed up file.

    Comment by Joe Corey -

  54. Well this Video On Demand thing is still in its infancy over here in Australia but it is starting to get the attention of quite a lot of big investors, industry players.

    I have just written an article about it so it was interesting reading your blog and your opinion on what will occur.

    It is starting to get attention here and one of the companies involved mentioned that the large size of movies will drive growth and demand for faster broadband.

    Comment by Crazy Jim Smith -

  55. Everyone keeps mentioning the highest of the high speed connections as if they are readily available. The reality is that they aren’t. Yes, some people can download at incredibly high speeds, but most people who have broadband are stuck at a 3-5 megabit (not megabyte) per second speed. I believe its that fact that caused Mark to give a 5 year time frame. It’s going to be at least that long before enough people have fast enough speeds to download movies in a high enough quality to watch on their tv, especially if its HD.

    Comment by Scott K -

  56. I think your post is based on the assumption that downloadability is not a disruptive technology .. measured 1:1 it may be that it will take years for it to be as seamless/fast for multiple access as a video store .. but the one thing we know, bandwidth/speed always improves.

    If you look at downloading as an enabling technology then what you may find is that there are multitudes of other gains that will drive consumers away from walking into a store to pick up videos.

    Services such as NetFlix are partway down this .. they manage your access and utilize both the internet and snailmail so you don’t visit the store …Tivo’s watch list is on the other part of the path .. it watches for you and just finds it … The minute there is a similar background service (finds it for you, downloads it, and only charge
    if you watch) then thats when the retail stores are in deep trouble
    even if they lose only 40-60% of the walkins thats probably shutdown time.

    More than one doesn’t matter if its easier to find interesting things to watch.

    Comment by sdy -

  57. One of the things that this discussion misses is that millions of people have PC’s connected to their TV’s, we just call them DVRs. Fundamentally they are purpose built PC’s and as we’ve seen with Tivo, they have a high capability to add functions. While I agree that true VOD, live streaming, is probably not possible without something like FIOS, which is far from implementation in most places, there are other options. The Moviebeam model is pretty compelling, if we didn’t have the limitations of over the air broadcast only providing limited availablity, and the catalog is fairly poor at this time.

    If you could add the ability to preload via the wire, or satellite, a selection of features that are timely, then many more folks would use this functionality. The technology is already in place, how you implement has many options, p2p on your cable box possibly. You could do day and date with theater release, charge $14.99 or $19.99 for some timeframe of access, and you’d have a second distribution channel for initial release and still have the ability to sell DVD’s later. If you go to the theater you’re going to spend at least that much, and going to the theater is a hassle for some folks, hence DVD rentals have had a huge impact on theater seat sales. If the cable companies use something like bittorrent to load your DVR and share the load inside their cable infrastructure, and your DVR could decode WMV-HD ,H.264, Mpeg4, DIVX-HD, you could do HD, without a huge physical server farm to dedicate, its just software at that point. It may take days to preload, DIRECTV and Dish would actually have an advantage in this case, but most content providers know when their release is coming so you can schedule it, or have the users select what they want a la Netflix or CinemaNow et al. I’ve seen your post about the networks and the iTunes model and this would be similar, just a different distribution method.

    Customers should be willing to shell out a few more dollars to get day and date with the theatrical release vs. the delay and DVD release. But once you get the DVR in house, you can order both the premium (i.e. new release) movie as well as the budget (i.e. DVD release timeframe) movies at the same time, you can even have premium extras like a DVD has with the DIVX format. And both the studios and the cable companies can make money.

    The only problems I see with this is that most major studios aren’t necessarily mastering HD content at the same time as film, or even DVD, at this point. So you get back to the problem of distributing an SD and HD version of your content, if you get HD you can distribute it and convert to SD, just not vice versa. Maybe once more filmakers start leveraging the HD cameras or distributing to DLP theaters then content stops being the issue and distribution is your only hurdle. The other problem is that “Hollywood” is in a conundrum today with the whole HD DVD vs BluRay format war, I’m not sure they want something else confusing the customer, but they should get proactive on this instead of reactive. Once someone cracks the DRM, and I’m sure there’s going to be a crack, there hasn’t been a encryption system that is both consumer friendly and uncrackable to this point, their content is going to get pushed out via the internet anyway, and they’ll not be able to hire enough lawyers to stop it. Better to get in front of it and take the revenue from all the folks that don’t want to go to the theater, and also don’t want to mess about with setting up a PC for pirated content.

    There has been a similar discussion every time a new media distribution model comes out. When VHS rental came out there was still some benefit to going to the theater; video quality and sound, but still the studios didn’t embrace it for years. Then DVD’s came out, the rental model was entrenched by then, but since the quality of the media was much better, studios have had a tough time, many movies don’t show profitability until rentals are calculated. Now with 1080p HD content and sound, your quality of the media is fabulous, and you don’t have to worry about the guy on the cell phone or getting up to get more popcorn and missing 15 minutes. Yes, your wife is going to complain about that monstrous TV, but she still likes it better than fighting the army of 13 year olds to get into the theater on Friday night. And that’s the point really, going out to a movie used to be an event, now it’s a chore. The fact that we work more, and are tethered to work via 72 different devices, it’s just more relaxing to stay in. The media companies have been scared to death of the internet for 10 years, but look at music, eventually they started to embrace things like iTunes or Rhapsody, because their customers were already using it and the companies weren’t seeing any revenue, in fact declining revenue. See Napster. Fundamentally there really isn’t a difference between music or video, just cost of developing content and the contents size.

    This is what I want personally, I moved my whole house to HD 5 years ago, when the available content was just not there, plus just built a dedicated home theater room specifically for all this stuff. I’d rather wait 3 months and watch the movie on one of the DVD formats than go to the theater, and I live within 3 miles of 34 screens, all of them new. It’s Vegas, everything’s new. I’d gladly pay $20 for a day and date release without leaving the house, but maybe it’s just me. I just don’t think that there is a technical issue; psychological, maybe; inertia, probably; but with all the smart people around the technical side is probably solvable. Of course, if it were my money, I’m not sure that I wouldn’t want to be second to market instead of the first.

    Comment by Rick -

  58. Rarely is there a DVD Tuesday when there are 3 movies I just have to see. At most I rent 1 movie a week. I think the internet can keep up with that.

    Comment by Bill Paul -

  59. Mark,

    Downloading movies is going to destroy film and television in the manner that Napster destroyed the music business. As you know, there are no agreements between the studios and the WGA, DGA, SAG and IATSE regarding the payments of residuals (compensation for reuse of credited content) regarding digital downloading. Accordingly, the studios are planning to pay the Guilds using the Home Video/DVD rate using an ancient formula (created in 1984) which pays a residual from 20% of the collected revenue and excludes 80% of the total monies: This will destroy the fabric of the entertainment industry. In any event, I have posted an article 8/25/06 entitled “How Digital Downloading, Podcasting, and Video I-Tunes Will Destroy The Entertainment Industry” at http://www.writingforfilm.com/Articles. I look forward to your comments.

    Best Regards,
    Brooke A. Wharton

    Comment by Brooke A. Wharton -

  60. Sadly, I agree that Mark sounds more like a naieve old fogey, like my parents, than a technology guy (or billionaire movie-industry insider with access to smart people) on this topic.

    However, if this post was targetted at chastizing his fellow overzealous movie-industry execs rather than spewing facts, then I understand his comments.

    The truth is, they shouldnt rush to cannibalize the retail sector until the market forces pull you in that direction. Thats plain silly, since you will obviously be leaving much money on the table due to the aforementioned “Mother-in-law test”.

    On the other hand, even if he is only referring to this holliday season, it would be complete stupidity for Mark to truly believe his words for the long-term. Mainstream demand for internet-downloaded movies is coming, and coming quite soon!

    Right now we are at the cusp of another technology shift moving from fringe-user obscurity into the mainstream. This is quite remniscent of when MP3.com, Napster, et al burst onto the scene before the big corporate interests figured out how much money was involved.

    However, this time we have experience from the Music world, plus a stronger mainstream usage and acceptance of sites such as YouTube, Google Video, and many more.

    Also, Movies are different than music. Movie Downloads are going to be a much easier sell to the masses than was music, because people HAVE ALREADY BEEN DOWNLOADING MOVIES FOR YEARS.

    I’m not talking about internet movies – which definitely have been downloaded plenty. Its this ancient technology called “Pay Per View”, “Comcast On-Demand”, plus the dozens of other cable download services the cable-networks offer.

    Other than the protocol, equipment, and technology behind it, Internet Movie Downloads are essentially exactly the same.

    Once you factor-in the upsurge in Video IPods, and the number of PC’s installed with Windows Media Center (installed on almost every new desktop & laptop sold to consumers thse days – not to mention movie support in iMacs), the integration of internet-downloaded movies will eventually make it feel EXACTLY like pay-per-view style services.

    So, Mark, I hope you were only targeting this year in your “1 Thing” homage to City Slickers. Otherwise, you are in danger of becoming known as the dumbest smart guy we have ever seen.

    Comment by Lance -

  61. You know what I think? Not that anyone asked but… I think Netflix has the answer. I agree with Mark, downloadable movies are not going to take off like every business writer looking for an article topic says they will. Bandwidth is a problem, here’s a bigger reason:

    It won’t pass the Mother-In-Law test.

    My mother-in-law couldn’t do it. She *just* figured out how to get her pictures uploaded to Walmart.com and have them printed at the local store. She considers herself a technology guru now. So, trying to show her how to download a movie and play it (even if it is from a fairly simple interface like a web store) is big issue. And if Codecs come into play…forget it.

    Netflix is great, however. If they could expand correctly they could fill the void that the download movies can’t. Why couldn’t a I get a Netflix card and then rent a movie from my local airport at the Netflix booth? I could go there, have them burn a DVD of whatever movie I wanted to see from their list (not the total list, a large select list–they’d need to store the movies digitally at each kiosk, but Terabytes of disk storage is cheap) and then I mail the disc back just like a regular movie I received from them. The movie is treated like a regular Netflix disc–if I don’t send it back in, that spot is taken up in my queue until I do.

    Or, through Netflix’s partnership with hotel chains, I can select a movie online to show up at my hotel when I check in. Cool, I get into town for a business trip and “Dave Chappelle’s Block Party” is waiting for me! I’m done with it, leave it in the room in the mailer envelope and the staff mails it back for me. Go on vacation with the family? There’s already 3 Disney movies waiting in the room for the kids.

    I think the combination of physical property and on-demand creation is where it’s at, personally. Downloading is not.

    Comment by Chris -

  62. throttling….mmm…I see. I don’t download enough to show up on the radar for that stuff, although I think in Canada our ISPs are out of the reach of some of these laws.

    “As for Mark’s kids, you should do a little more research before you say something like that.”

    I have no idea what Mark’s family situation is…thankfully I have better things to do that follow stuff like that, but my point was that kids, any kids will do…so I’m sure he has at least access to a kid now or then, could keep him more up to date cuz this post seems like it came pre-broadband or something [like I said I didn’t know about ISP throttling].

    Comment by Jonno -

  63. This is exactly why I think we need smarter BitTorrent clients. I use BitComet, and it has a “Priority” setting, that doesn’t appear to do anything at all.

    But the clients need more than that – they need to be smart, and know, based on my bandwidth usage for other things, how intrusive they can be. If I am reading blogs, I have extra bandwidth that a torrent client could (and should) scale up to utilize. But if I switch to watching YouTube videos, then the torrent client should scale back.

    By using smart bandwidth utilization you still won’t get your movie “fast”, but you would be able to get your movie without bringing everything else to a screeching halt!

    Comment by kr8tr -

  64. Jonno, we have this dirty word in the country called ‘throttling’. If you ISP thinks your downloading way too many bytes, they throttle your speed so you aren’t going as fast. ISPs here have this fear of letting anyone download anything for fear they will get named in a lawsuit. I should know… my brother and I got throttled many times. At one point, we had downloaded over a terabyte of stuff. Our ISP told us they would cut us off if we didn’t cut back. Even if it is legal download, they get picky if you download too much. In fact, my brother was downloading so much at one point because he thought he could, we crashed our ISP… no kidding. Speed is just one factor. There’s the hardware constraints of your ISP to consider as well. If you’ve got super duper spiffy fast internet, hooray for you.

    As for Mark’s kids, you should do a little more research before you say something like that.

    Comment by Rebeccalee Coventry -

  65. BT + Extreme High Speed Internet [available in Canada] = Decide on a movie and it’s downloaded by the time the popcorn is made…while you’re watching that one…the next 3 are done.
    Mark…update your world please….why aren’t your kids keeping you informed?

    Comment by Jonno -

  66. A combination of smart download clients and escalating broadband speeds (Verizon FiOS, 20Mb/5Mb in NYC anyone?) will easily lick this problem.

    A smart download client that uses 80% of available bandwidth all the time and could manage a prioritized queue of movies would provide a much better movie-watching service than, say, Netflix.

    Unfortunately, the current movie services blow (with the possible exception of Vongo). It may take Apple to show us the way again.

    Comment by Uchendu Nwachukwu -

  67. If I’m reading this correctly Mark, you’re saying you can’t download multiple movies w/out tremendous hassle….

    Hmmm, I do it all the time – begin before I go to bed and wake up with multiple movies…

    So, Don’t think you can download multiple movies w/ relative ease?

    One word.

    Torrent.

    Comment by David W. -

  68. Downloadable movies is probably the dumbest use of bandwidth yet and will die a silent wimpering expensive death.

    Besides the time, the digital restriction, the file format wars, the plumbers of the network, your ISP’s, will do everything in their power, to roadblock this.

    Just look at the music business and iPod lockin for a roadmap of the movie download business.
    3-5 minute movie downloads that are so popular now will be about the limit.

    Even if this achieves any short term traction the Windows Crash Problem will kill it off.

    The studios may realize this and shorten features, but now you start running into the TV space.

    Expensive in terms, of the studio spending tons of money on content scrambling and digital rights systems that will be broken by some teenage kid with a laptop who wants to watch movies at his girlfriends house.
    I have around 400 VCR and 150 DVD movies.
    I have broken, crashed or destroyed 20 computers. I still have the movies.

    Comment by alan herrell - the head lemur -

  69. Mark, I think your idea about taking an entire night to DL a movie is kind of silly. A few hours is much different than an entire day. Also, I think the assumption of no new increases in the ‘average american’s broadband speed’ is ignorant. New and better technology increase not just the access to broadband but also massive parts of this country still lack last mile fiber service. Fiber lines make downloading a 3-4 gig DVD a joke, not to mention if a movie supplier takes advantage of MPEG4 capabilities not only do they cut the filesize and keep the quality (please, don’t use DivX) AND they could sell their own MPEG4 player set top box to take care of the DRM issues.

    Comment by James Miller -

  70. fast upload internet access provider is a must for HDTV content !!!

    Comment by trexia -

  71. You’re underestimating the speed of broadband connections and the effect of MPEG4 compression on movie sizes.

    Let’s do some math. I pay about $28 a month for a 6 Mbit DSL connection at home. Maxed out, I can download about 600 KB/sec. 600 KB/sec times 60 seconds is 36 MB per minute or 2.16 GB per hour.

    I just ripped The Producers from DVD to take with me on vacation. (My ultralight laptop doesn’t have an internal optical drive, so I just rip the movie and take the file with me.) The Producers is 2 hour and 15 minutes long, which I ripped to very-near DVD quality XviD in 1,350 MB (or about 10 MB per minute). Remember that we’re talking XviD here – H.264 compression is actually a lot more space-efficient.

    Doing the math, I could download that DVD quality movie over my DSL connection in about 39 minutes. That means it takes less time to download the movie than to watch it. I could download three such movies in two hours.

    A good movie download client will use an algorithm making it the lowest priority network application. That means if another app, like your browser, wants to use the tubes, the download client moves out of the way. The client could also queue the movie downloads to happen over night.

    A REALLY smart download client would burn the movie on to a blank DVD already in your drive. It could eject the DVD when done and wait for another DVD to burn the next movie.

    Now let’s look at H.264. Apple has a bunch of H.264 HD content on their website. The 720P content is encoded at 45-50MB per minute. At 50MB per minute, the 720P version of The Producers is 6.75 GB. On my 6 Mbit DSL connection, I could download the movie in a little over three hours, or about 10 hours for three movies.

    I’m lazy, so I sleep from about 10:30 PM to about 7:00 AM every night. That’s 8 1/2 of the 10 hours I would need to download the three movies. I also don’t use the PC or my network connection while I’m at work every day, so it could download during that time as well.

    Again, assuming a smart download client that gets out of the way when I need to do something on the machine, I could download three 720P, H.264 encoded, 2 hour movies EVERY DAY on the connection I have RIGHT NOW.

    I don’t see HD movie downloads replacing DVDs in the near future, just as iTunes hasn’t (yet) replaced the music store. But we’re not going to have to wait 5 years for the technology to arrive. It’s already here.

    (Cross-posted to my blog.)

    Comment by Carl -

  72. That’s true in the US… in 3rd world land you’d still be paying a couple bucks for a downloaded movie versus 25-35 for an original one… and with an exchange rate of 3.5 small amounts do matter…

    Comment by JL -

  73. I totally agree with what you are saying. Plus, I think people underestimate the power of actually owning something. The movie obsessors won’t brag “Check out my hard drive”; we say “look at my DVD rack.” Nothing can get passed the visual appeal of having an actual physical copy. Don’t underestimate the power of the visual. I would think Hollywood Marketers should know this, they make a living off the appeal of “visuals.”

    Comment by Adam Wright -

  74. Then why are the peer 2 peer network such a problem ?

    Comment by Guillaume -

  75. I have to dissagree with you on the multiple movies. I used the Star service for the free trial period. It only took about 1 hour to download a movie. You could also watch it as it was being buffered. When I used the service, I would pick 5 or so movies I wanted and they would download in the background. It worked great for taking it to a family gathering with multiple movies already on it. The only problem I had with the service was that they didn’t have enough movies to choose from, that’s why I stuck with Netflix. If you always have your computer on the network, downloading movies in 1 hour instead of waiting 2-3 days on netfix definatly isn’t a problem.

    Comment by Dan Countryman -

  76. Gotta disagree Mark – first time for everything. :)

    IPOD resolution is what, 320×480? Same with most PSP? The BEST you’re going to get is 512×384 or so.

    I have a 512×384 ‘movie’ on my harddrive and it’s 41 minutes long, compressed is around 200 MB. Say a movie is 1:22 so double, 400 MB. You’re telling me 400 MB isn’t downloadable on a real service like Yahoo/MSN/AOL? I can download about 100-150 MB an hour pretty easily. You’re talking about a movie being 2-3 hours. You mean when I go to bed at 1am tonight, throw 3 movies on my list & wake up with 3 movies that was too much hassle? Been a college student lately? ;)

    Where there’s a will there’s a way. It’s never going to be 5 channel surround sound but thats not what you need for your office IPOD ya know?

    M

    Comment by Matt Antonino -

  77. I’m thinking lesser quality resolution (meant for small psps and ipods for ex) would speed up download times, and inhibit piracy to a degree. movie lovers with healthy appetites want cover art, want limited editions, movie nights with their friends, and to show off their home theatres. on-the-go downloads shouldn’t be dual layered blue ray gorillas, anyway.

    Comment by saM FFL -

  78. There could be ways around the hassle of downloading movies but that would make more hassles. The encoding could be changed to where the file size is smaller to make downloading faster but then quality would suffer for the sake of convenience. There are several different formats that a file could be encoded to but not everyone supports those formats. That presents the hassle of finding the codecs for the format and those who download movies might not want to go to all those hassles either. It’s not that the codecs are that hard to find… it’s just that people will want the company they’re downloading from the provide them instead of having to strike out on their own to find them.

    These are the kinds of things that can kill a seemingly great idea. No one ever gets down to the nuts and bolts until it comes up in practice. For the sake of time, no one thinks things out anymore.

    Comment by Rebeccalee Coventry -

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