Movie Downloads Get Even More Confusing Thanks To Sony

from the this-is-not-a-step-forward dept

The New York Times is talking up a new experiment that Sony is running with the movie Hancock. Before the movie is even available for rental, owners of a specific Sony television with a special "internet package" (only $299) will be able to download the movie for a fee (as if the $299 weren't already enough). The New York Times piece seems to go out of its way to make Sony look like it's made some huge breakthrough with this offering, in part because it brings together the content side of the business with the consumer electronics side -- two groups that not only rarely spoke, but were often at odds with each other on certain projects. On that part, perhaps it is a step forward -- but for the overall market, this seems like a big step backwards.

Requiring a specific brand of TV just to watch a movie over the internet seems hugely problematic. And, when you combine that with Apple, Netflix, Blockbuster and others all working on their own proprietary solutions for downloading movies to watch on your television, the entire market is splintering. By now, you would think the industry would recognize that proprietary solutions that only play on a particular piece of hardware tend not to be a very good solution, and actually scare off buyers who don't want to get stuck having bet on the wrong horse. But, apparently, someone forgot to tell all of these guys working on their own proprietary movie download solutions.

40 Comments | Leave a Comment..

Central Planning Didn't Work In Russia And It Doesn't Work On Your Set-Top Box

from the competition dept

Here's a roundup of movie-download services -- Apple TV, Vudu, Movielink, Unbox -- all of which have underperformed expectations. This won't come as a surprise to Techdirt readers, as we've panned these products before. And the reasons they've flopped are frankly pretty obvious: high prices, restrictive DRM, and no easy way to move videos to the device of your choice. I won't re-hash those arguments, but I think it's interesting to compare the anemic development of the digital video marketplace with the rapid development of digital audio a decade ago. The fundamental difference is that Hollywood kept a tight grip on the digital video market, while the DMCA didn't come along soon enough to give the music industry control over digital music. They tried to outlaw the MP3 player, but because there was no DRM involved, they lost in court, and the result was the flowering of innovation that led to the iPod and other MP3-based devices.

There's still something of a mystery here, though: most video download services are not just bad but spectacularly bad. For example, Hollywood sunk $100 million into Movielink before giving up and selling the whole mess to BlockBuster for $20 million. Even assuming that Hollywood wants to limit how its content is used, it's obviously not in their interests to make things this crippled. So what's going on? I think a key insight is offered by an excellent paper that Columbia law professor Tim Wu wrote a couple of years ago called "Intellectual Property, Innovation, and Decentralized Decisions." Wu's basic insight is that too much centralization of control over any one part of the economy can lead to poor decision-making. In an extreme case, such as Soviet Russia, a government can try to run a whole economy by central planning. But the same principle applies on smaller scales. The modern cell phone industry, with half a dozen competitors, is evolving a lot more rapidly than the old Ma Bell monopoly used to. And on the other hand, there's a lot more innovation going on in the open Internet than locked-down networks of cell phone companies. (Apple doesn't seem about to change the walled garden wireless model.)

The same principle applies to the digital video marketplace. Right now, Hollywood has veto power over innovations in the video space. They've made some dumb mistakes, like charging too much and mandating the use of DRM. Unfortunately, thanks to the DMCA, competition hasn't had a chance to kick in. People can't route around Hollywood by using DVD-ripping software the way they routed around the record labels in the 1990s using CD rippers. So if somebody has a great idea for a digital video product, they have to go begging to Hollywood before they can implement it. But Hollywood isn't run by technologists, so they make bad decisions. And because nobody else is allowed to enter the market without their permission, the whole world suffers for it.

Timothy Lee is an expert at the Insight Community. To get insight and analysis from Timothy Lee and other experts on challenges your company faces, click here.

35 Comments | Leave a Comment..

Surprising Survey Results Reveal That Movie Download Sites Do, In Fact, Suck

from the how-much-clearer-can-we-be? dept

It's incredibly obvious -- to everybody but the Hollywood movie studios, apparently -- just how bad movie-download sites are. When the first studio-backed efforts launched several years ago, the problems were clear. In the following five years, they haven't been fixed, despite plenty of reviews pointing them out. The studios made "protecting" their content with ridiculously restrictive DRM their top priority; delivering a good user experience came in somewhere down towards the bottom. Now, a new study has yet again pointed out that consumers don't like these services, and yet again makes it clear why: poor selection, unreasonable prices, poor quality. Add in the general difficulty in getting video from the services to users' TVs, and you've got a recipe for failure. These are many of the same points that have been made over the download services' lifetime, but that the studios and companies running the services have largely failed to address. It's little wonder, then, to see a site like Movielink, the studios' own download site, get sold at a huge loss since it's going to take wholesale changes to give it any chance of success.

8 Comments | Leave a Comment..