Monday, September 18, 2006

Will Downloading Movies Be A Big Business?

The New York Times says video available online is exploding and movies will clearly be a huge market. I say: not so fast. Let me explain why iTunes has done so well when selling music singles and TV shows. Now why was Napster such a smash hit? Because people wanted to steal music? No, because they wanted digital downloads and NO RECORD COMPANIES WOULD SELL THEM. The second iTunes came online, digital thievery slowed down and legal digital singles became a huge business. Why were people paying $1 for singles online? Because they couldn't buy them anywhere else. Record companies had basically STOPPED SELLING SINGLES. If you wanted to buy the #1 song in the country, nine times out of ten you had to pay $15 for the entire CD. Singles simply weren't available. For more obscure songs? Forget about it. This idiocy on the part of the record companies is despite the fact that singles were the backbone of the industry, a great way to break new artists and an even better way to get kids to buy music. They were forced into selling songs on iTunes and now they're going to make billions of dollars.

Now why are people buying recent TV shows on iTunes? Because those TV shows aren't available anywhere else. Just like singles, a recent TV show simply isn't available after it's aired. If you forget to watch a show or Tivo it, you can beg or borrow a copy on VHS or recordable DVD from a friend. But if no one you know taped it, you have to wait until it comes out on DVD maybe a year later. If you love sci-fi but don't own cable and want to watch "Battlestar: Galactica," you can wait until a year passes and rent or buy it on DVD. Or you can pay $2 and watch the show right away. If you like the episode, you might buy next week's too. And so on. In short, TV shows on iTunes are a success because they fill a need and offer shows right away that aren't available anywhere else. You can watch a lot of TV at $2 a pop before equalling the $90 I pay for cable. (That's equal to the entire season of four shows just in one month.)

Now, movies. Movies won't be available to download online until they're also on DVD. Would you spend $15 to spend hours to download a movie without all the extras, a copy you can only watch on your computer (and maybe a few other computers)? Or would you pay $15 for a DVD that looks much better, has tons of extras and can be watched on your computer or your TV or your portable DVD player in your car or on your boat or at your friend's house or at your parents or anywhere you damn well want? Duh. Downloadable movies (especiallly say 20 years from now when you can quickly download say any movie in history) could be a business. But it won't be a huge success the way music and TV shows are because it offers a much poorer experience with much fewer options compared to DVDs and video on demand that are available at the very same time.

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