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?"
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.
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
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.
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...
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!
Right now, DVDs are "rent once, rip once, play anywhere" because I can play DivX on my computer, burn to an optical, or whatever. Downloading something in a proprietary format that only works with certain software or hardware - blech. That's why I don't own an iPod.
Re:iTunes (Score:5, Interesting)
Re:rental cost (Score:2, Interesting)
On the other hand I own zero movies, and a lot of other people own many, so maybe they will pay $20 to own it on their computers. It still seems to me that people who would pay $20 and like to have a video library would prefer to have the disk, the case, and everything.
Maybe the downloads will not have all the "DVD Extras" that the DVSs have.
Re:Not $8 for Consumers (Score:3, Interesting)
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?
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.
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?
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's less convenient for me to get the file, I'll probably stick to buying or renting, though I don't do too much of that as it stands.
Re:$5 (Score:2, Interesting)
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.
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.
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.
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 you don't have to d/l it again. I'd probably pay $.50 for a tv show if I could only watch it once. This all is based on the fact that the timer starts when I watch the movie for the first time.
I find it hard to believe that a TV show wouldn't want to allow people to d/l and watch at least the first half of one TV show for free. You have to come up with some want to attract new viewer.
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 bought years ago. Clearly, it retains its value!
Now, I agree that Steve really should keep a record of what we've ordered and let us re-download it, but as has been said before, Apple does allow and encourage the making of backup copies. You're better off with Apple's system than if you had a physical CD protected by DRM.
On the whole, then, Apple has earned our trust as customers. I'm not going to lurch into fanboyism and say that Apple's flawless or that Apple hasn't done a few bad things to its customers, but on the whole their record's a lot cleaner than their competition.
So who do I trust, Apple or Sony?
Pretty easy call, no?
D
Never from Sony (Score:3, Interesting)
So, Sony could price these things at 2 cents and I wouldn't touch them.