Is The Time Right For Digital Delivery Of Movies?
September 1st, 2006 by MikeMichael Arrington points an article in Business Week that claims that Apple will begin selling movies for download this month. According to Business Week, Walmart is up in arms because Apple is getting a better wholesale price.
I was surprised by Arrington’s closing remarks:
“Given that it will be trivial for iTunes users to simply burn a DVD of these movie downloads, Walmart has good reason to be worried. Netflix should be nervous, too.”
When the stars align and bandwith providers, movie studios, consumer elctronics makers, and digital distribution partners like Apple, Amazon, Walmart, AOL and Netflix get digital distribution right some old business models will certainly be eclipsed. But I think it’s a little early for Netflix to worry.
As Mark Cuban notes, download times are still abysmal:
“Easier to download a movie? Maybe. Easier to download 2 or 3 movies than going to the store to buy or rent ? Never. Never, ever, ever. (Which means not in the next 5 years).”
You think going to the movie store is a pain in the arse? How many of our average citizens will be able to endure the download time, much less figure out how to burn a dvd of the movie? That’s assuming, of course, that all of the aforementioned players above allow one to freely do so.
I am sure the Netflix never saw delivery by the mails as a permanent solution to the “watching movies at home and on the go” industry. As I mentioned before, their relatively luddite service was possible because Blockbuster sucked and digital delivery hadn’t (and even with Apple’s entrance, still has not) been perfected. Like Apple, Amazon, Walmart, and a host of other companies, Netflix always planned to offer a digital service when it becomes feasible.
No doubt, Apple launching any service should make its competitors nervous. But in this case, I don’t think Netflix has anything to worry about for quite sometime.
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September 1st, 2006 at 11:50 am
I’ll be interested to see what standard screen size and compression rate the folks at Apple use. If it’s anything like what they’ve done with their television episodes, the loss when transferring to a DVD is substantial. Of course, if the quality is significantly lower, there is something to be said for a lower wholesale price.
September 1st, 2006 at 12:31 pm
Go Timberwolves circa 89′ - nice color scheme
September 1st, 2006 at 12:33 pm
http://en.wikipedia.org/wiki/Image:Richardson1_200_8990.jpg
September 1st, 2006 at 1:05 pm
Point taken, thanks for the illustrative graphic… per Luke’s earlier comment I also got some Seattle Seahawk’s going on.
September 2nd, 2006 at 2:54 am
[…] Once Apple reveals the new widescreen iPod in the coming months, we’re going to hear a lot more about the iTunes Movie Store. After all, that iPod is going to be the hottest product on shelves come this Christmas season, and a digital store for movies that is as easy to use as iTunes is going to make for one hell of a struggling DVD sales season for Walmart. Serves them right, I say; maybe they could stop worrying about making jillions of dollars and offer employees better pay and benefits. BusinessWeek dropped the (long-expected) bomb this morning, and the usual gang is weighing in with thoughts around the blogosphere. « I Get (almost) No Spam […]
January 16th, 2007 at 12:12 pm
[…] I have written several posts about the interesting space that Netflix filled by building a company to deliver movies through the mails at a time when physical stores were becoming obsolete and digital delivery hadn’t become feasible on a massive scale. In my last Netflix post I noted that: “… Netflix never saw delivery by the mails as a permanent solution to the “watching movies at home and on the go” industry. As I mentioned before, their relatively luddite service was possible because Blockbuster sucked and digital delivery hadn’t (and even with Apple’s entrance, still has not) been perfected. Like Apple, Amazon, Walmart, and a host of other companies, Netflix always planned to offer a digital service when it becomes feasible. […]