The idea of true, pure, unfettered video-on-demand has been a movie industry chimera since the dawn of time. What if, executives say teasingly to their audiences, we gave you everything in our catalogs whenever you want it? You would never leave the couch.
Never mind that that studios don’t necessarily even know what they own. Video-on-demand, as imagined by consumers, requires unlimited bandwidth, unlimited storage, and unlimited time. I think we’d settle for wide selection at reasonable prices. First, of course, we need to get the households of America wired and networked for downloadable video. Total downloadable domination isn’t technically feasible yet, so why are the studios so terrified of angering Wal-Mart?
Let’s face facts. DVD sales are declining. Internet usage is up. Shelf space in bricks-and-mortar stores is limited. Hard drive space is cheap and easily expandable. Not everyone has access to a Wal-Mart. Not everyone has a broadband connection.
The Los Angeles Times suggested in a recent article that Apple rushed its announcement of downloadable movies due to competition from Amazon’s Unbox service. The lead in the Times story showed a profound case of ostrich-in-the-sand syndrome: “Considering that the news leaked out days in advance, Steve Jobs’ announcement this month that Apple Computer Inc. was expanding into movie downloads came as no shock.” Considering the buzz since the iTunes store was openeed, this was a “when not if” announcement. If there was any shock at anticipated, it was because it took so long.
iTunes reportedly moved 125,000 units of Disney films in the first week of distribution. You don’t need me to tell you that’s an amazing feat, but I will anyway. It was amazing for a lot of reasons. Mostly because downloading movies takes a lot longer than downloading songs. Technology, you see, is the real limiting factor.
The estimated $1,000,000 in revenue is nothing to Disney, and if they’re looking at annual dollars in the $50 million range, someone’s not doing something right. You’re looking at a slate of a mere 75 films, a mix of catalog, new releases, and Pixar titles. A lot of these films are already living happily on the shelves of consumers. Look at the success curves of iTunes music and television programming. Let’s talk when “Pirates 2” hits the virtual and physical shelves at the same time.
Which reminds me — hello? consumers? The fact that studios are bowing and scraping and delaying online releases of product to satisfy physical retailers such as Best Buy and Wal-Mart indicates that they don’t get their consumers. Stop playing games with us. Give the choice, we’ll make the purchase that best suits our needs.
Much is being made of the fact that only Disney product is available in the iTunes store. It’s two weeks later — is anyone talking about Unbox? I went to a dinner party recently, not a word about Unbox was breathed; lot of talk about how acquiring an iPod after one member of the household discovered how easy it was to transfer media from the store to her (daughter’s) iPods. She’d been struggling for a year with her Windows-based MP3 player, and stopped using it because it was so hard. The harder you make it for consumers, the faster they walk away.
Businesses like Wal-Mart don’t fear the Amazon deals with studios because businesses like Wal-Mart don’t like competition. Amazon, with its pricing and restricted use, isn’t competition. iTunes is competition. It will make people think about pricing and flexibility. iTunes movies will naturally have more variety. iTunes movies will give consumers choice. That should terrify Wal-Mart, but it should also remind Wal-Mart that this is the nature of the American economy: the next big thing is always around the corner.