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A Workable Downloadable Movies Business Model?
Posted by
Zonk
on Fri Nov 04, 2005 09:32 AM
from the money-for-nothing dept.
from the money-for-nothing dept.
sane? writes "Following on from the music industry attempting to push up the cost of iTunes music downloads comes word that Sony is looking take robust control of the pricing for legal movie downloads - to the tune of $8 a movie. What is the maximum acceptable price that slashdot readers would give to different types of downloadable product, taking into account their perception of its true value to them? How can sensible pricing and workable business models be reconciled?"
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iTunes (Score:5, Insightful)
However, barring malware distribution by major corporations, I believe that Apple has showed the industry exactly the business model to follow for media distribution, so, provided a fair and reasonable DRM policy like that of iTunes, I would be more than happy to pay $5/movie, but not more than that. Come on now, the industry has the opportunity here to make far more money off of not just recently released movies, but following a long-tail model [thelongtail.com], they could make obscene amounts of money off of older movies/content that is no longer available or being distributed. Think about all the old classic Sci-Fi movies or classic movies that are only available on TCM on occasion? What if you really could watch them "on demand" rather than waiting for them to rotate through. How about old TV shows?
Being able to watch movies at home on your computer or on your laptop on the plane is not just a convenience that they should be charging premium costs for. It is a mass market scheme to drive insanely high revenues if the price point is made attractive. If they were smart, these movies would be made available more cheaply and the "premium" experience could still be had at the theatre.
So, for an industry that already is sitting on media that is no longer generating significant income, they have the opportunity to create potential huge revenue streams for media already bought and paid for, so why gouge the customer? It is a surefire recipe for slower adoption, delayed revenue streams and potentially failure.
Re:iTunes (Score:2, Insightful)
Re:iTunes (Score:2, Insightful)
Re:iTunes (Score:3, Insightful)
I know that I'll watch a movie a few times, then not again for years. Listening to songs on the other hand...
Re:iTunes (Score:5, Interesting)
Parent
Re:iTunes (Score:3, Interesting)
TV Show (20 minute or 40 minute): $0.50-$1.50
Movie: $3-$4
Song: $0, I'll d/l for free and if I like it I'll buy the CD.
All of this can change if it's based on a "rental" model. I'm not willing to spend as much if I can only watch it once or only for a certain period of time. I'd say for $2 I might be willing to "rent" a movie in which I could d/l it and watch it for so many hours after the first time I played it. Then have a cheaper rate to rewatch it if
punks and beatniks... (Score:3, Informative)
Re:iTunes (Score:5, Interesting)
Could you explain that point further? If you want everyone to follow Apple's "Fairplay(TM)" DRM model, what is it specifically about that model that makes it more attractive then the others? What where your logical reasons for choosing that as the best DRM solution?
It can't be the robustness of the data - if the latest iTunes update (or OS X update) kills your harddrive (again), or the computer simply dies as they sometimes do, it's Apple's policy to charge you for the music all over again, even though they have the records showing you legally own it. Apple DRM certainly isn't making digital music as long lasting as the physical disk technology. Even Apple's closest competitor offers a partial though far from perfect solution - the proof of ownership can be backed up seperate from the music (meaning you can make as many copies as you want), and then can be used to obtain the music without being charged again if you suffer a harddrive crash.
It can't be the number of copies you're allowed - most other DRM schemes also allow 3 copies (again, Apple's closest competitor allows any number of copies to be specified, and can even allow the ability to create "lending" copies - you can give a time limited copy to a someone to try out, and you don't have to worry about them returning the licence to you)
It can't be the ability to burn to CD - again, Apple's competitors support this too.
It can't be the future proofness of the format - "Fairplay" is currently glued to Apple, you can't play Apple DRM music on anything that doesn't have an Apple logo. One of the best arguments for open source is that closed source software leads to documents that can no longer be opened because the application required only exists for an obsolete platform. With "Fairplay", all the eggs are with one company - if Apple, just one company, disappeared, your music would left stuck in a format dieing of player entropy. This is what we call "vender lockin", and it's a bad thing. Some of Apple's competitors avoid this through partially open standards, other avoid this by spreading the format to as many companies as possible - if one dies, the others can fill the gap.
So please help us understand what specific, technological or contract, parts of Apple DRM we should be trying to make more widespread. Why is "Fairplay(TM)" so superior, other then the fact that it lives within the safe confines of the Apple reality distortion field, guarded by a phalanx of Apple fanbois?
Parent
Re:iTunes (Score:5, Interesting)
Apple's policy, however, does not prevent you from doing four things:
Burn the music to a CD (something like 10 at a time; change the playlist and burn ad infinitum)
Burn the file to a CD (infinite times)
Copy the file to another HD (infinite times)
Load the file to an iPod (infinite times)
In any event, only an act of God would wipe out your clever backups.
The model that Apple has demonstrated to it's success is threefold:
1) Software doesn't suck. The same software and interface used to interact with your own music library is the basis for the interface for their online music store.
2) Hardware that doesn't suck. The iPod
3) THe price doesn't suck. If Sony wants to charge 8, I'm willing to bet Apple will charge less ($4.99? $3.99?) for a movie.
Fairplay can be actually played on HP Media Center PCs, Motorola ROKRs and soon RAZRs, iPods, Macs, and PCs. More to the point, you can burn to a CD and play on any CD player you want; there are also numerous unlocking tools of dubious legality, but not of dubious morality.
So if Apple disappeared, no, the music would not die; you would still have your iPod, still have your iTunes, still have your CD player, etc.
The reason Fairplay is superior is that it was the first that allowed you to:
1) Connect a song from a PC to an MP3 player without extra charges
2) Burn said song to a CD any number of times, with a few constraints
3) Make as many copies of the file as you want
If the other DRM have caught up, it isn't because Fairplay isn't superior; it's because it is, and the others adopted Fairplay's design.
Parent
Re:iTunes (Score:5, Insightful)
It can't be the ability to burn to CD - again, Apple's competitors support this too.
Well originally that was a big part of it since Apple's competitor's did not allow burning until they were beaten to a pulp by Apple. Many people who evaluated the different DRM schemes in the past have not realized this is now available on other DRM systems. Also for Windows Media based systems less technical users don't realize that the CD is a way of removing DRM, since Windows Media Player applies DRM to ripped files by default, unlike iTunes.
I think a big part of the reason people favor Apple's scheme is that it does not get in their way (for the most part). People are unhappy with Real and WM because when they try to play them on a portable it does not work (most portables are iPods). That is just the way the market has shaped up and has nothing to do with the DRM scheme per-se. For slightly more tech savvy people, look at the competition. No one trusts Real since they killed their reputation with spyware. No one trusts MS since they always abuse their formats to lock people in. Who else is a major player in the space?
I've purchased songs from the iTunes store, but not because their DRM is any better (now) but because they had what I wanted and it was unavailable elsewhere and because they don't use a stupid rental scheme, and because they were not too expensive, and because I could take the DRM off of the music easily and legally using the CD burning method, or using easily available freeware without losing any quality.
I agree that DRM in general, and closed, proprietary DRM is a terrible thing for the industry, but at the same time if I am going to buy something with DRM on it, I'd rather it was from Apple rather than Real or Microsoft simply because I trust them more. Also, it is apparent that Apple executives know that DRM is useless and will always be able to be bypassed, so they don't try too hard to do annoying new things with it. Basically the DRM is not really any better, just the people providing it are more trustworthy (IMHO).
Parent
Re:iTunes (Score:3, Interesting)
Whatever other faults the man has, he's a master negotiator and manipulator, and although he wants to make a buck, he knows that there are two sides to the transaction, and low prices are necessary for the two sides to enter into an agreement. He was also the first DRM advocate to understand that people would rather buy music than rent it. This is sensible since right now I'm listening to music I've bough
Re:iTunes (Score:4, Insightful)
I would pay the price of a movie ticket or perhaps $10, whichever is cheaper. That, to me, is a reasonable price. Not as much as a DVD (yes I know you can buy some DVDs for under $10) because I would have to provide my own media to use if I wanted to travel with it, but certainly as much as I would pay to see it once in a theater.
Unless this is a temporary use model that I couldn't save and reuse. If this is a temporary use model, I wouldn't pay more than $2, personally. I can rent movies for that price via netflix and other stores so why would I want to pay more?
Parent
Re:iTunes (Score:3, Insightful)
Just for comparison... (Score:4, Interesting)
A DVD is more flexible (at the moment) than a downloaded movie. It can play on any computer or DVD player, which is a cheap device. Your downloaded movie would be considerably harder to play on your TV or portable device, and even if they were to incorporate the DRM code to allow you to authorize that device it would be inconveninent and jack up the price of that object.
So, let's say that DRM'ed downloads would be of less general utility than the DVD. The downloads would have some advantages (e.g. the ability to back them up), but that's relatively minor.
Still, it sounds like you're really lowballing them on the price at a mere five bucks. Can I then infer that you think that $20 for a DVD as it is now is too much, and that you don't buy many DVDs?
Parent
Re:Just for comparison... (Score:4, Interesting)
$20 bucks IS way too much to pay for a DVD. I will do it occassionally, for films I really love, and will watch over and over, films where every deleted scene, commentary track, and outtake are precious to me.
There aren't very many of those.
Most films I will watch once, and if I can keep them around, maybe a couple more times later on, if I want to show them to a friend that hasn't watched them. Hell, seeing them in the theatre is cheaper than getting a DVD if you only watch it once or twice.
Now, a rental price is more reasonable. 4 or 5 bucks. But I still never do that, because it is inconvenient. The price is fair for the value of the entertainment I get, but they don't get very many sales out of me because it takes too much effort on my part.
Enter netflix -- The monthly subscription model means I am spending way more money on movies than I would without netflix. The price per movie is less than a rental, but the convenience means that I watch way more movies. Win-win. I get more movies, and they get more money. . . just less money PER movie. It's like a discount for buying in bulk, and giving them a guaranteed amount of business each month.
Any downloadable movie distribution service needs to accept the same philosophy. Since the product isn't physical, and they don't actually deplete their stock of content by letting me download it, it isn't about how much 1 movie should be worth -- it is about what price will maximize the total amount that I spend.
If they will sell me one downloaded movie for 5 bucks, I might buy one, now and again. Maybe once a month. But if they sell them to me for 3 bucks each, I'll probably buy two a month. They just made an extra dollar by charging me less per film.
Parent
Re:iTunes (Score:3, Insightful)
Consider, Dishnetwork has pay-per-view movies for ~$5, I can purchase the DVD (hard drive crash insurance)for $15 at Wal-Mart. So, the download must compete against physical information (purchase) as well as temporary physical (rental); weighed against inconvenience (download time).
Now, if these companies want t
A Brilliant Mind (Score:4, Interesting)
He was able to regain his senses and apply his intelligence to real-world problems. For this he was acclaimed and honored. But for the rest of his life, he was never sure whether the people that he met or even his interaction with daily routine was real or part of his unbalanced imagination.
Such an apt metaphor for the movie industry. $8 downloads per title is fantasy, and all the financial projections based on such a figure are fantasies. Maybe, just maybe, for some excellent movies, for some wealthy people, $1 per download might work.
Movies are simply too available now for there to be any vast difference in price between what is there and what is new. Blank DVD ROMs are about 25 cents each. This is the current 'swap meet-water cooler exchange' rock-bottom price for a movie. Anything above this price is the utility that is added by the MPAA companies. Store prices of last years theater releases are $15. That's the max upper price for a physical disk, box, packaging, and resellable legal license. Older movies go for $5 for the same deal, regardless of quality.
So what Sony is saying is that their new movies are so good, so special that they are worth far more than any of the titles of the 20th century. And this is so without the disk and packaging. And you have to pay for the downloading and storage costs.
Such incredible arrogance.
I give them about 10 years before they're gone. And that's because they are such an integrated hardware-software company and have a lot of built-up good will from the 20th century to squander on madness.
Someday, someone will point out to them that the era of 200 million dollar movies with $30 theater tickets-popcorn-baby sitter costs are over. Whether the fantasy infected minds of the top executives will be able to separate reality from fantasy will determine the fate of their company and the people who work for them.
Parent
Re:A Brilliant Mind (Score:4, Insightful)
Not the issue.
Look, they don't charge more for a DVD of a $100 million dollar movie than they do for a $10 million dollar movie. Production cost is largely irrelevant. What we're talking about (mainly) is optimal pricing.
When you have something like digital files, where the per-copy "production" cost is trivial, you have huge flexibility in pricing. $1 a copy may be a better price than $8 if you sell 20 times as many copies. What Sony et al need to figure out is that optimal price, and in so doing, they need to analyze what they're selling against. And they're selling against DVDs, Netflix, Peerflix, libraries, what's on TV, and legal and illegal sharing. You don't have to undercut all of these on price, but you do need to make your product more appealing than the alternatives in enough situations to make it worth it to customers.
It's my judgement and the judgement of others here that $8 is too high. Some here claim it is immorally too high. I disagree, morals are not the issue, competitive pricing is.
Parent
Not $8 for Consumers (Score:5, Interesting)
Of course, this would probably all be highly compressed, DRMed to hell video files, too. Given that I can go to a local Wal-Mart or Target and get a lot of these old titles for $6 at full quality, and make my backups using something like CloneDVD, I'm not likely to be purchasing a $10 movie download anytime soon.
Re:Not $8 for Consumers (Score:3, Insightful)
A new release DVD cost, lets assume, $20.
$20 New DVD
$02 But I don't get packaging. Minus $2.
$01 I don't get fixed media. I have to store this myself. Minus $1
$05 DRMed to hell! I can't make backups! Minus $5.
$05 I have to download it and pay for the bandwidth. Minus $5.
----
$8
Well there's the $8. Now if they don't screw up ANYTHING else that's fine and I'd probably buy it... but only for a new DVD. No w
Re:Not $8 for Consumers (Score:5, Funny)
Parent
Re:Not $8 for Consumers (Score:3, Insightful)
Add in the fact that most folks are more interested in watch-once than ownership, and the cost for Blockbuster, Netflix or even cable VOD is about half this, they're way off the mark.
Re:Not $8 for Consumers (Score:3, Interesting)
rental cost (Score:5, Interesting)
For me, the cost would have to be the same or less than a movie rental for me to buy in. $8 is too much. I'd say $2.99 is about right -- and I don't care if the $2.99 movie expires after a certain period of time or anything. Like I said, 99% of the time I just watch a movie once.
Sam
Re:rental cost (Score:2)
This is aimed at the I-don't-want-a-disc market, which the media companies have been wholly unable to figure out.
Re:rental cost (Score:3, Insightful)
Well, they think they do. When I rent a movie from Blockbuster, rip it to my PC with DVDShrink [dvdshrink.org] and then I have a copy I can watch whenever I want (even though 99% of the time I only watch it once). What's the difference between that and letting me download the binary version for $2.99? If it saves me the trip to the store and back, I'll use the online service.
Sam
Re:rental cost (Score:3, Insightful)
Theres a legitimate watch-it-once market, and a legitimate I-want-the-box market. The question is whether the I'm-cool-with-a-digital-copy market is something that is acutally worth getting into.
If everyone in the digital-copy market is a subset of one of the other two markets the answer is a resounding no. However, if there are new people who don't rent movies because watching it once isn't enough, and also don't buy the movie for whatever reason then it may be a market worth
Re:rental cost (Score:3, Insightful)
I'm thinking, like, $3 for rental or $6 for purchase. And, it would be nice to have the option after paying the $3 for rental to then kick in $3 more if you really liked it to invalidate the expiration date.
As long as there were no shady malware problems and stuff like that, that is
First post (Score:2, Troll)
Re:First post (Score:5, Insightful)
I don't get this phenomenon of wanting to watch movies on your cell phone or iPod or even sitting at your desk in from of your computer.
To me, movies are a *big* experience; I want a nice big screen, a great sound system, dim the lights, a big bowl of popcorn and a giant soda.
Watching movies on "cell phone" is contrary to everything I hold dear about the cinematic experience.
Sam
Parent
Re:First post (Score:3, Funny)
But more inline with *today's* cinema experience, now the annoying teens can talk on their cell phone and watch the movie. Now that's convergence.
Hard Copy (Score:5, Insightful)
Re:Hard Copy (Score:3, Interesting)
I replaced a lot of my music collection when I went from vinyl to CD.
I replaced a lot of my video collection when I went from VHS to DVD.
I'm not paying for the same bitstreams again!
Righ
Re:Hard Copy (Score:3)
Because mp3s are proprietary?
Too expensive (Score:5, Interesting)
Sure, it requires me to walk there first (I don't have to drive, considering that it's pretty much just across the street), and they might not have what I'm looking for; but on the upside, I get the movie within minutes instead of having to wait for a big download first.
So for me at least, an online place would have to be considerably cheaper than a real store in order to be attractive. And considering that a lot of the costs associated with having an actual walk-in store with real DVDs and real employees don't exist here, I'd say that they could still make a comparable amount of money even if they charged less than the offline stores do, too.
That's Easy (Score:3, Funny)
-Charlie
P.S. If you think the current rootkitting DRM schemes are bad, wait till you see the next gen ones, like the ones for HD movies. Yikes.
Nothing left to say (Score:2, Interesting)
No hard copy (Score:2, Interesting)
This isn't like music where one usually only wants 1-3 tracks from the album. Buying 1-3 tracks from a CD, you're paying... 20%!
I'd want the same discount on a downloaded movie, 20% for what I want, even though that's (usually) the entire thing.
Movies... (Score:5, Interesting)
If we are talking "Out on DVD" movies, I would pay up to 50% of the cost of the DVD version... I mean with a internet version you get "nothing"; with the DVD version you get higher quality, a box, a disk and perhaps bonus features.
I am from the UK -- And purchased a couple of lost episodes even though the DVD versions of series 2 will be cheaper; but those episodes aren't on in the UK yet, and thus the extra cost was well worth it.
I would also be willing to pay a smaller fee to "rent" an internet movie (one that stops playing after n time limit)... So like $3.50 and you get to watch a new movie for a week wouldn't be all too crazy...
$8!!! (Score:5, Funny)
At most.. (Score:3, Insightful)
I see little reason to pay more than half, considering how much cheaper it is for the studios to put it out on the internet rather than produce, package and ship DVD's. In fact, even if the internet downloaded movie costs half as much as the store bought DVD, the studio will still make more money from the transaction.
Of course, this is all a pipe-dream. Looking at the track record of greed and abuse by the movie studios and their lackeys, you can be sure that internet downloaded movies will have artificially high prices. They'll intro the service at $8 for all movies, and then after a year or so they'll start demanding $15 for new releases. And, to top it off: you know there is no way in hell that these downloads will be legally transferable. If I buy a DVD, and decide it blows, I can at least take it down to the pawn shop or give it to someone else. Can the same thing be said with these DRM laden downloads? I seriously doubt it.
Screw that... (Score:2)
Use an existing model (Score:5, Insightful)
Movie downloads should cost no more that $1.
Music downloads, compared to other media downloads (movies, above), should cost no more than 10 cents per track or $1 per album.
After all, I can go to my local library and get the DVDs/CDs for zero dollars.
Phony Slashdot responses (Score:3, Interesting)
I keep seeing posts saying "I won't pay $8 for a movie" even though that is what 4 million people do every day [plunkettresearch.com]. Today you pay $8 to go to a theater, wait in line, watch 20 minutes of previews, watch 10 minutes of commercials, listen to cell phones and annoying people... Yet suddenly $8 is too much to pay. Oh, right: I post on Slashdot, so nobody must know that I once bought a Brittany Spears CD or that I watch anything other than the Sci Fi channel. Oh the horror!
Another poster said that they would only pay $2.99 because they would rather rent. That makes some sense. Except that the very same poster points out that they currently pay more than $2.99 and that they must also include the price of gas, the chance of the rental store being out of stock, and the time involved in finding the movie.
Maybe asking people what they would pay for a product is just not a realistic way to determine what it is really worth. People say $8 isn't worth it, then the go buy it anyway.
Re:Phony Slashdot responses (Score:3, Interesting)
The market will set the price. If 8.00 really is too much, it'll come down. If it's not enough, it'll go up.
The great thing about the market today is that p2p stands as a safety valve. When the cost becomes too high, p2p traffic goes nuts, and the stores and studios are forced to lower prices.
I'm glad to see someone finally offering movies, but I think a lot of its failure/success will depend on the DRM. 8.00 is more than I pay for most of the DVDs I buy (----bargain rack junkie), and if it
Netflix (Score:5, Insightful)
Never from Sony (Score:3, Interesting)
So, Sony could price these things at 2 cents and I wouldn't touch them.
Maximum acceptable price (Score:3, Insightful)
Personally, if content is DRM-crippled in any way (such that I cannot freely convert it and copy it to all devices I own, etc) then its true value to me is basically zero. I would be willing to pay $8.00 US to download a high-quality (TV-quality or better) movie that was not DRM-crippled. I would be willing to pay no more than about $0.50 US to download the same DRM-crippled content.
Does it come with Root Kit Source Code (Score:3, Funny)
I'd be willing to pay more for the movie if it came with the source code to the root kit that they wanted to intall on my machine to enforce DRM in order for me to watch it...
Re:most likely too expensive (Score:3, Insightful)
Replace my sentence with
"Basically what you can obtain today (ab)using bittorrent".
Not taking any stance on legality or morality or any of that. Fact is that lots of people are currently offering what lots of people want. For free. With the caveat that it's not legal. People make cost/benefit