You need to do something about this,put me in charge.

2) None of us software guys are going to put up money, because we’re intelligent enough to know what Hollywood accounting is. Every major studio has multiple lawsuits against it at any given time from directors, producers, and actors demanding proper royalties. They’re absolutely not trustworthy business partners, and when they hold the keys to the promotion of the content, we’ll give them a substantial cut of profits, but it’ll be a cold day in hell before we hand over a huge chunk of our VC up front. It reeks of those sales pyramids typically seen with “high end” cosmetics.

3) Cost of distribution is something that also needs to be addressed. Netflix says that after factoring in maintenance and initial capital, it currently costs them roughly 6 cents to deliver a movie (and that number is only shrinking). Why should I pay a studio $10 per transaction that costs only 6 cents? When you consider the fact that it’s completely up to the studio to decide whether they’ll promote the movie, the fee structure is laughable. And unlike physical distribution, I only need a single copy for digital, so most of the expenses are in negotiating the deal. I’d be paying almost $10 of pure profit per transaction to studios who prey on partners that they actually need… imagine how they feel about partners like myself who are easily replaced.

4) You are correct in the disparity of pricing — the studio deals for digital distribution are laughably non-competitive. Historically, pay-per-title downloads (Amazon, iTunes, and all the failed startups) cost MORE than the current market value of the actual DVD. And, digital movie downloads are always DRM laden files that typically require calling home every so often (to key servers that historically have stayed up for only 2 or 3 years). These aren’t purchases — they’re rentals of probably about 2 or 3 years. Every VC knows that to get a tech product out, you have to get the geeks to adopt it first, but no geek is going to pay MORE for a laughably shoddier product, especially when the best product is available elsewhere for free.

There is another paradigm, short in coming, that will quickly overtake the current one. It is the completely wireless solution. It cuts all of this “download vs offerings” argument out because it essentially delivers everything, such as videos, documents, etc, to you whereever you are.

This now gives the power of distribution to the big content providers who are apt to take it and sell 100% of advertising for themselves. Imagine how big Viacom would be if they could collect 100% of advertising instead of sharing it with broadcasters and cable companies? They would instantly increase in size three-fold.

Services, like what Hang 10 Technologies (hang10tech.com) offers through their vuivision.com website, can be utilized to bring 100% content to individuals whereever they are. Hang 10 is also offering content providers HDTV through their new encoding and indexing system, over wireless networks, at very low bandwidths. No downloads, no aps, no iPhone required. How long before the content providers realize they hold all the cards?

Why pay cable or TV broadcasters, or deal with them, when the content providers have an unlimited, widely distributed broadcast medium to distribute their content at a fraction of the cost that it is currently be offered at?

My guess is that the ESPNs and Viacoms of the world realize this and are just waiting for the right moment to pull the plug on broadcast/cable and start dealing with the future broadcasters, Verizon and AT&T.

For this reason your blog, and today’s current business offerings, are suffering from an old paradigm or perhaps the one that is fading… quickly.

Is’nt this just an instance of the micro payments problem?

It’s messier to pay 1$ through the net then it is to a redbox machine…

Not to mention many big companies do not support net neutrality, so ISPs would be free to throttle ports used by said online video providers rendering their services useless. Especially when it comes to 1080p or higher content.

http://sites.google.com/site/videomailbox/