A Workable Downloadable Movies Business Model? 365
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?"
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.
Hard Copy (Score:5, Insightful)
Re:iTunes (Score:2, Insightful)
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
Wide selection (Score:1, Insightful)
1) Wide selection
2) Convenience (that includes not instaling a rootkit on my PC, thanks)
3) Price
Of course I havent created a multi billion dollar corporation, so what do I know? I've watched some corps fail though.
Re:Not $8 for Consumers (Score:1, Insightful)
One of my main issues with going to the movies, outside of the stupidly high food prices, listening to ads before the movie starts, being asked to not pirate (When I just bought a ticket), is that my wife hates movies.
So I resort to downloading them off of the internet if I can't get a friend to go with me. I have been wanting to watch movies in theatre at home for a long time. I haven't been able to understand how we have Tivo, and I'm sure decent hardware encryption capabilities on my satellite or cable box, but I can't securely get movies in theatres.
Good news all around..
Re:iTunes (Score:2, Insightful)
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.
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...
Depends (Score:1, Insightful)
Of course the model changes when looking at other video content, such as television shows. With a TV show people are usually looking for something more disposeable. They're not likely to watch it more than once or twice so they probably won't pay as much. $2 is probably the ceiling here, but the quality probably doesn't need to be as high either.
This is a moot point right now. Until the content providers will allow these things to be burned to standard DVD's, people simply aren't going to buy them in large enough quantities to support the business model.
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: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 way would I shell out $8 for a DRM copy of 2001 or something. God help them if they install rootkits.
On a related note - I assume everyone saw the rather clever exploit for WoW using the Sony rootkit? If not, security focus [securityfocus.com] has it.
Re:iTunes (Score:2, Insightful)
I know I'm planning to sell my shit to all those morons. Selling to Apple fanbois is like having a license to print cash!
Take a look at Netflix (Score:1, Insightful)
With my Netflix sub, I pay a flat fee, and I can basically have any movie I'd like to watch practically the day after tomorrow. This flattens the revenue stream for the company, which I'm sure pleases them immensely. I can get my copy of LOTR from Netflix, invite my friends over, watch it on my projector, and have a ball - there's no "per use" fee, no extra money because I had friends over, no "oversize image" charge.
It continually blows me away how clueless and out of touch Big Media is. Look, here's what we want: movies, on demand, on a subscription basis. The revenue potential is immense. We want to watch our first run movies in the theatre, with the option of watching them at home a week or two later. We want them at full DVD quality or better, and we want to be able to save them to our hard drives for convenient watching at a later date.
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 persuing. If the movie company takes a larger hit from people defecting from the I-want-the-box catagory than they gain by tapping the new digital-copy market it's not worth persuing no matter how cool it is.
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.
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?
Re:iTunes (Score:3, Insightful)
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 somthing I could probably get behind. $8 or $10 is kind of pushing it for me when I don't get the shiny DVD and the cool packaging, but if they knocked it down a little more, it would start to get me thinking about it.
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 to have their own 'unique' format; that only their software can decode, I'm all right with that. However, if they insist on installing spyware on my machine; they are sorely mistaken.
Paddlocks do not keep thieves honest; they keep 'honest' people honest. The pirates who mass-produce the movies will continue to do so; until the penalty outweighs the risk/profit. Threatening the public at large only creates resentment such as what the RIAA is currently enjoying.
If they can't download rentals for less than $5 (I'm thinking $3.99 as there is NO physical media, no advertizing costs assocaited, no labor involved and the distribution network is already in place); they need to re-visit their model.
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: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).
Netflix (Score:5, Insightful)
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.
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
The fact remains, as long as nobody is offering a competiting legal option that offers the same quality and ease of use with just as few strings attached, there is NO HOPE WHATSOEVER that the paid option would become popular.
- Choice 1: High quality, new releases, no DRM strings, pretty easy to find what you want (+free, illegal)
- Choice 2: Lesser quality, releases made available who knows when, braindead DRM restricting common fair uses, limited selection based on rightsholders whim (+pay money, legal)
The last bits - money/legality is NOT whats gonna make or break choice 2 from the plate. The other stuff decides if anyone is interested. The day someone rolls out a service that gives high quality, new releases (at least on par with DVD launch somewhere in the world), no DRM and wide selection, that someone will make a killing for the movie studios (and probably bunch of money themselves as well).
Any current halfhearted attempts at video download services are completely and utterly TRASHED by the free/illegal option. ONLY pay-to-download video services that offer what the purchasers want (just the quicktime/avi/divx/whatever, no strings, reasonable price/quality ratio) are, unsurprisingly, services offering p0rn... I mean what *other* stuff you can pay-for-DL at or above DVD resolutions without DRM crap except p0rn?
The ONE AND ONLY REASON iTunes became popular is because the 'DRM' is a non-DRM. You pay, you download, you burn CD, it's yours - plain and normal CD.
Give me 'You pay, you download, you burn DVD, it's yours to watch', and don't overcharge - instant hit. Doesn't matter if its 9GB to leech. People have broadband connections that are currently 95% unused. Some ISPs might groan, but people will happily leech away even if it takes couple of days to get the whole thing. Add crappier resolution versions for those who don't want to wait - give the choice to the customer (without charging extra).
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.
Hidden costs? (Score:2, Insightful)