Medialoper

Chasing the long tail of new media

Movies

More Troubles for Netflix

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It’s perhaps not the best month for Netflix. Recently, they’ve been publicly spanked (and sued, of course) for what may be one of the more dumbass policies in recent retail history: willfully ignoring their best customers for their worst customers. I mean, come on, do they know anything about the cost of acquiring a customer vs. keeping a customer or how repeat customers drive a business or did they literally stumble across their model in a cave? (Gee, Tennesee, we can use the Internet to rent videos.” “Good one, Chumley”).

And now Netflix has a new worry: disgruntled postal workers stealing their videos before they can make it to their destination. One carrier had a stash of over 500 videos. Hello, Newman! Of course, perhaps these weren’t disgruntled postal workers so much as disgruntled hardcore Netflix fans, angry that — despite the amount of money they spent — they suddenly couldn’t get the movies they wanted when they wanted.

Can Sony Stop The Betamax Curse?

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UMD, a format developed by Sony for the PSP market, is apparently being put out to pasture. Sales are simply not what were anticipated. Fair enough. There didn’t seem to be a focused plan for UMD.

But giving up on the UMD format might not be the brightest move. If studio executives would take a moment to listen to what consumers are saying (and doing), they’d realize that like shoes, there is no “one size fits all” format. We have entered an age where DVDs co-exist with memory cards which live alongside videocassettes which share space with hard drives sitting next to big pipes from the cable and phone industries.

While there are issues of price and accessibility, Sony can save the UMD from becoming the next Beta by realizing the fundamental truths of today’s markets, including the fact that UMD is settling into a niche market. Niche markets, by the way, aren’t such a bad thing if you understand them:

. . .Sony et al should see the writing on the wall: the only titles that are selling well are those that appeal to the young male market.

Sony has a massive software library — more titles than it realizes — yet continues to cling to old business models. Continually revamping internal business units and shoving square pegs into round holes isn’t the way of the future. Winning the game means playing the game smart (Sony, call us — we know from smart). It means listening to your customers. See example below.

Sony (and the rest of you movie execs), listen up. A company named Apple has sold millions more iPods than you’ve sold PSPs. Many of those iPods were sold long before there was an iTunes Music Store. How is this so? Simple: users could exploit their already existing CD collections (although the RIAA is now trying to stop this). Imagine being Apple and trying to sell the iPod if the only thing you could put on it was materials bought from iTunes. Still think those sales numbers would be what they are? Of course not.

Sony Announces Beta, er, Blu-Ray Price Points

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This week, Sony announced that the wholesale price points for DVDs in their new High-Definition Blu-Ray format will be between $18-$24. This is in line with the price points for the new High-Definition HD DVD titles from Warner Home Video. That’s the only good news for consumers in this whole Hi-Def DVD war: the fact that the prices for these higher-quality discs will be much lower than they otherwise would have charged.

Sigh. 20 years later, and nobody has learned a goddammed thing: two competing video formats, sponsored by warring big-moneyed camps, and — if history repeats itself and one format reigns supreme in the marketplace — the big loser will be the film buff who stocks up on that eventual losing format. So bollocks to all of them: this film buff — who already has hundreds of DVDs and would be a natural and even eager target audience for High Def DVD — is staying far away from all of it. And I’m guessing that I won’t be the only one.

Rehabilitating Movie Theaters

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It’s not easy being a movie theater these days: for more reasons that I can recount, people aren’t seeing theater-going as the best way to enjoy motion pictures. Studios and theater owners are rapidly moving toward digital distribution (see also: customized content for theaters), but this expensive investment in infrastructure sometimes feels desperate. It’s not scratchy prints that ranks highest on the consumer dissatisfaction list.

But digital distribution will allow theaters to use their spaces for more than traditional films. You can now enjoy all the glory of a concert without the hassle of parking and crowds. And if you’re short like me, chances are you spend more time watching the video monitors than the action on stage. . .if only because you can’t actually see over the person in front of you. In addition to music, look for sporting events and conventions (ah, the joy of going to a movie theater and munching on popcorn during the Democratic National Convention). And look for some confusion on the part of patrons:

“I’ve never been to one of these,” one attendee noted, “so I don’t know whether I am supposed to sit and watch or stand and clap.”

The First Crack In The Window

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Windows — those periods of time a motion picture (defined as a movie or television show) are available for viewing via a specific media — are sacred in Hollywood. Each window provides a certain type of revenue stream. Using movies as an example, the dollars flow more-or-less in the following order: theater, non-theatrical venues (airplanes, for example), pay-per-view, home entertainment (DVD is the pre-eminent source here), regular pay television like HBO, network television, various international television markets, domestic syndication (for those who like to watch their TV on Saturday afternoons), and a never-ending stream of subsequent television sales.

As we’ve seen with product developed for the network market, some products are being released (almost) concurrently with the network window. This is causing all sorts of heart palpitations among the traditional set — windows are set and shouldn’t be toyed with.

Which is why there’s more than a little gloating that, for perfectly logical reasons, the window-free release pattern for Steven Soderbergh’s new movie Bubble is being viewed as less-than-successful. Except for those who view it as a huge win for the new world. Soderbergh partnered with Internet-savvy Mark Cuban’s 2929 pictures, and the product was licensed to a range of media concurrent with the theatrical release, including the Landmark theater chain.

Though an experiment in breaking windows, the film suffered from short-sighted attitudes of established theater chains:

While the film’s box-office performance was modest because major theater chains refused to run it, the film’s backers declared victory for their release strategy.

Considering that more viewers than ever are staying home from theaters, the fears of the theater chains are understandable. But, considering that more viewers than ever are staying home from theaters, it makes sense that content providers would capitalize on advertising dollars by hitting all media types at once. Another consideration for both theater owners and content providers is the fact that there is not necessarily crossover when it comes to theater-going audiences and DVD-viewing audiences. Why penalize one group in favor of another?

It is a matter of time before the next day-and-date release comes from major studio. The next time, it probably won’t be a small-budget film aimed toward a limited audience. Then the question of whose gloating now will become a Hollywood game.

Warner Brothers “Brave” P2P Experiment

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On the surface Warner Brother’s new plan to sell movies and television programs online using file sharing networks seems brave and brilliant. Brave, because the company is making the effort to fight Internet pirates on their own turf, and brilliant, because the company is using an established P2P infrastructure that requires no investment on their part. Forget trying to build an iTunes killer, just take advantage of the delivery opportunities that are already in place.

Upon further investigation, however, the new In2Movies service looks like it might need some retooling.

Some issues immediately come to mind:

1. While they may be popular with millions of early adopters, file-sharing networks are too complex for the masses.

2. File sharing networks have virtual zero quality of service guarantee. How will WB ensure that downloads are quick and painless?

3. File sharing is just that – file sharing. Essentially, consumers will be asked to take an active role in distribution of WB’s product. Even more amazingly, WB will be asking consumers to pay for the privilege.

4. Presumably WB’s products will be competing along side pirated products that are available for free download (including, probably, some of the same titles WB is hoping to sell).

5. The initial test is limited to a small group of countries. The pilot will launch in Germany and expand to Austrian and Switzerland in March. The last time I checked it was nearly impossible to restrict file sharing to a single country.

Unless WB plans to create an entirely new file sharing system this pilot program is full of fatal flaws.

The Window is Closed

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Back in the 1980’s, video store proprieters referred to the amount of time between when a huge hit such as “Rambo” or “Beverly Hills Cop” debuted in the movie theatres and the time when a person could enjoy the same piece of entertainment at home. Typically this window was between several months and a year, depending on how big of a hit the movie was. The flipside of this, of course, were those films that the studios deemed to be huge turkeys, and didn’t even bother to put in the theatres: the much-derided “straight-to-video,” which was code for “this movie sucks.”

Over the past two decades, that has all changed for several reasons: things like the video & DVD revenues making hits of films that failed in the theatres; the splintering of the mass audience into a zillion different pieces; the rise of digital media and distribution have all contributed to lessen the equation that theatre release means quality in the mind of the public.

So that window kept rolling up: a year became six months became 3 months becomes simultaneous. At the end of this month, a film from a major director — Steven Soderbergh — will be simultaneously released in theatres, DVD and HDTV. On purpose, as a marketing strategy, with no comment implied on the quality of the film itself. This is a quantum leap, even if the movie tanks or sucks (and it’s one of his more experimental films, so we’ll see), the idea itself of the release window is antiquated in a world where you can have everything when you want it.

And if it even remotely succeeds, we will be able to add downloading to that simultaneous release schedule very very soon.