DigitalDistribution
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Blu-ray and digital distribution not enough to hedge DVD's 2010 decline
Despite 2009 being the best box office year of all time hitting a record $10 billion, the Digital Entertainment Group has announced that the home media market continues to lose ground when compared to last year. The first six months of 2010 still managed to earn $8.8 billion for Hollywood, which is still a lot, but it is down 3.3 percent when compared to the first half of 2009. This is despite the fact that Blu-ray revenues were up 83 percent over the same period hitting a new record of $982 million for both sales and rentals. And digital distribution was also up to new heights gaining 23 percent and hitting the new record of $1.1 billion (which includes sales and VOD). Sales were actually almost flat in the second quarter, but it would've taken a lot to make up for the lost ground in the first quarter. This is obviously a white whine as not many industries would complain about only earning over a billion dollars a month and actually transactions were up 2.3 percent, which does indicate there might be a trend towards renting vs buying during hard economic times. The 30 day value rental window imposed by Warner and others might help explain why the second quarter fared better than the first, but one quarter alone isn't enough to call the practice a success. Full release with many more details after the jump.
Physical and digital distribution sales for games nearly equal, GameStop CEO thinks people like boxes
There are two ways to look at physical media. Some see it as needless clutter; useless relics taking up shelf space and collecting the airborne remnants of your dearly departed skin cells. Others, however, see rows and rows of boxes and books with a sense of pride -- proof that they have incredibly good taste when it comes to spending free time. According to the NPD, those two parties are rapidly becoming equal when it comes to gaming, with 21.3 million "full-game" PC titles downloaded (legally) in 2009 and 23.5 million boxed copies sold. That's awfully close, and ignores all the PSN and XBLA titles that are currently making our console hard drives cry for mercy. Should brick and mortar software stores be nervous? Not according to GameStop CEO J. Paul Raines, whose franchises are decidedly ceramic and paste-based: "The world won't be all digital tomorrow... In this business, users still want physical content." And he's right, you know. We'd say it'll be more like 18 - 24 months.
Lionsgate first to sign content deal with XStreamHD
XStreamHD is the videophile's digital distribution dream, but a dream is what it has remained for almost three years. The bad news is the 1TB Whole Home Media Server and clients aren't shipping yet, but the good news is one of the big studios has signed a deal with XStreamHD to distribute titles day and date with DVD, as well as access to 12,000 catalog titles. This, of course, has to be one of many such deals if the service is to be successful -- high quality 1080p video and DTS-HD alone won't be enough. The content isn't the only thing that concerns us though, as the up front cost for hardware (we admit we really like the user interface) and the $9 monthly service fee is a lot to swallow for the privilege of renting movies at $3 to $6 a pop. We'll reserve judgment until we get to play with it for ourselves, but distribution deals like this and a great demo is a good start, if you can call it at start after all this time. The full details are tucked in the press release after the jump.
Sonic bringing DTS 5.1 audio to Blockbuster, Best Buy VOD services
We've talked a lot about picture quality differences between downloads and disc, but audio is also a big part of the experience and Sonic appears committed to improving that in its new deal with DTS. No word on the exact specs, but the partnership will result in DTS "high performance" audio support including 5.1 surround in the RoxioNow video platform that supports Blockbuster and Best Buy's digital movie stores. Like Netflix, it plans to add the extra channels of audio later this year, check the press release after the break while we wait to see who gets there first.
Sonic acquires DivX to expand online movie delivery options, share of Kazaa downloads
Just because Sonic shifted its CinemaNow name into the care of Best Buy, don't think it's taking a break from working digital movie delivery options into every device it can. To that end it's purchased DivX, formerly a name you knew only as an illegal download enabling codec, but is now a legitimate enterprise that has agreements with major movie studios and more than 150 consumer electronics manufacturers. The cash and stock transaction should cause the two to get together and make the whole world believe them, with RoxioNow ending up in the millions of devices currently ready for DivX while increasing possibilities for DivX encoded movies going on sale in the United States. The DivX TV internet video frontend for set-top boxes and connected televisions should also get a boost from the deal, we'll see how it competes with widgets, TiVo and Google. There's a DivX TV trailer after the break for those interested plus the press release while related financial details, projections and promises can be found in the linked PDF.
Mark Cuban foretells Netflix demise, sees a future filled with on-demand video
To call Mark Cuban eccentric would be akin to describing the ocean as wet, but what's not so often acknowledged about the Dallas Mavericks owner is the sharp mind and commercial nous that have gotten him to the position of hiring and firing millionaire ball players. One of Mark's recent blog posts, entitled "The future of TV ... is TV," got the attention of NewTeeVee, who sought to debunk his contention that VOD (video on demand) services from cable operators would become the primary means by which we consume digital media in the future. They cite the growing success story of Netflix's digital distribution model, as well as the 12 million hours of March Madness video consumed via CBS' web portal, in arguing that web streaming is indeed the great new hotness. Mark's response tackles Netflix head on, and points out that the company's rapid growth is about to start working against it, with movie studios and other content providers likely to jack up prices and demand further concessions from the streaming service as it turns into a real competitor to cable companies. According to him, Netflix is presently getting its content at prices that are unsustainable, and his prognostication is that content owners seeking bigger levies -- together with the expansion of VOD choice, which he sees as foolproof compared to the overwhelming complexity that web streaming entails -- will lead to Netflix passing costs on to the consumers and losing out to cable operators. Irrespective of whether you agree with him, the whole exchange is well worth a read. Use the links below to get filled in.
Netflix inks with Universal and Twentieth Century Fox: first TV streams, more films, and 28 day rental delay
Everyone's streaming media darling, Netflix, has just reached terms with both Universal and Twentieth Century Fox. Both agreements beef up Netflix's streaming content while limiting Netflix to renting DVD and Blu-ray discs 28 days after the retail street date -- yup, just like with Warner Brothers. To put that into perspective, while Twentieth Century Fox's "Avatar" DVD/Blu-ray will hit shelves on April 22nd it won't be available for Netflix rental until the end of May. On the plus side we've got a first time, Netflix TV streaming agreement with TCF -- albeit, released in a window it decides. Content includes the complete prior seasons of shows like "24," "Bones," and "Lie to Me" in addition to older library titles like "Buffy the Vampire Slayer." Can't say we didn't see this one coming.
Warner Music talks trash about free streaming services, keeps using them
Warner Music Group CEO Edgar Bronfman Jr. isn't happy with free music streaming services. Shocking, right? Coming out yesterday with a barrage of disparagement for online streamers like Spotify and Last.fm, Bronfman Jr. made it clear that they do not represent "the kind of approach to business that we will be supporting in the future." Why is that, Eddie? The man in charge seems to think that paid subscription models are the future, because "the number of potential subscribers dwarfs the number of people who are actually purchasing music" online. That's wonderful and all, but he neglects to tell us the specifics of how and why Warner will succeed at something that every publisher would love to have, but none have managed to translate into reality yet. Additionally, WMG is not withdrawing its music library for the moment -- something a lot of publications seem to have erroneously reported (see Spotify tweet below) -- which leads us to believe the entire spiel is more of a renegotiating ploy than a concrete statement of intent. [Thanks, Wiggy Fuzz]
Digital distribution is the real winner of Warner/Netflix deal
We just love when analysts make obvious statements, it makes us wonder why we aren't professional analysts -- Ralph Schackart, digital media analyst with William Blair & Co. states that companies who rent movies digitally have the most to gain from the recent Warner/Netflix deal. If this doesn't seem obvious to you then consider this. Right now the only (legal) way to rent a new release without leaving the house in the first thirty days is via Netflix. If Netflix strikes similar deals with the other studios, it'll really level the playing field between physical media and digital distribution rental services. It is obvious now that studios want to find a way to roll back the 2009 trend of renting instead of buying, but we're not so sure this new window will have the intended effect. Netflix said that most customers won't notice the new window and in our own personal experience, a 30 day window isn't going to make us buy anything we weren't going to buy already. Assuming we are right, the sooner Hollywood figures this out, the sooner we won't have to wait the extra 30 days, no matter what our preferred distribution channel is.
Scribd positioning self to become Amazon competitor, sell books on Kindle?
The de facto place to buy Kindle books is, of course, Amazon. Given how tightly this allows Bezos & Co. to manage things we're guessing this is how the company would like to keep it, but there may be direct-to-kindle competition brewing from an unlikely source: Scribd. The site, which started off as a place to dump and share random documents, has been following the YouTube path and is now selling access to fully copyrighted works. Many of those are downloadable as text, Word, or PDF documents, meaning Kindle users can already conjure up some conversion magic and get them on their devices. But, according to Scribd CEO Trip Adler, straight to Kindle distribution is next. The question is: will they be for-pay titles, or only the billions of pages of free content the site offers? Places like Feedbooks and Gutenberg.org let you download free content direct to the Kindle already, but we're not aware of anyone selling that content yet -- other than Amazon, of course.
Amazon's Disc+ program tosses in a free VOD with your Blu-ray or DVD
In a move that could help counter the instant gratification valley that currently separates online shopping from heading to the local retailer, Amazon is pushing a "limited time offer" called Disc+ On Demand that pairs 300 or so of its movies with a free Amazon VOD copy. That digital version pops into the buyer's Video Library instantly after purchase and still has to play by all the usual video on-demand rules of 24 hr / 30 day windows, U.S. address, and is currently only available in standard-definition. Still, this combination of the digital and physical purchase worlds means the online giant has beaten Best Buy's similar plans to the punch and approaches the convenience of Netflix's Watch Instantly. Just its usually lower prices has already driven many of you to be come online only disc buyers, we'll see if this helps Amazon grab the rest.
So is Blu-ray really ripping off consumers?
That's the idea behind a recent column on TheStreet.com, which cites consumers happiness with DVD and the oncoming march of downloads as reasons that "Blu-ray rips off consumers." Now to be fair, actually within the article are less hyperbolic statements like "Blu-ray hasn't failed" but even from here we can see several holes in the author's theory. To begin, he claims that downloadable and streaming high definition video is "360 lines away from providing the same clarity" demonstrating an unfortunate ignorance of 1080p downloads already available from Vudu and streaming from CBS.com. Unfortunately, as we all should be aware there's more to the movie experience than simply resolution, and even with more 1080p movies on the way from Xbox Live, it will be some time before a customer can get the same experience available on Blu-ray from any internet service. Another assumption? That Blu-ray "expects customers to ignore the rapidly advancing technology right on their doorstep." Tell that to companies like Samsung, LG and Panasonic, who already sell Blu-ray players that double as digital distribution set top boxes delivering HD movies from Netflix and Amazon. Check out all three pages of this guy's opinion yourself and let us know if we missed anything.
Sony working on "good will" program to give digital copies of your UMD collection
We just sat down for an interview with Sony's John Koller, who among many other interesting tidbits and factoids (more on those later) assuaged fears that our giant UMD library would be entirely forsaken. While light on details -- they're still figuring it out, he said -- there will be a "good will" program by which owners of current disc-based titles will be able to obtain digital copies for use on the PSP Go -- "a set number of titles for a set period of time," to be exact. He couldn't confirm all games, or at least all your personal collection, would be transferrable -- that might have to do with the number of digitized games they'll have at launch, which will be at least 300 but not the whole back catalog -- but despite calling it a short-term program he did say, should you receive a new UMD game later down the line, you should still be able to make the digital transfer. As for price, we're still looking to confirm something there, but they wouldn't be putting so much effort into the program if it wasn't at least for a discount, if not free. If you happen to like your discs, Koller said UMDs aren't going by the wayside so long as the PSP is still around, but he expects digital to start taking an increasing share. Looking to the future, he confirmed all first-party titles and most third-party titles (by the developers' own volition, not a mandate) will be available as digital downloads day and date with the UMD hard copies, and yeah, despite the reduced shipping and manufacturing costs, it'll be for the same price, too.
Best Buy prepping an entry into the digital distribution game
Apparently Blu-ray sales aren't increasing fast enough for everyone, in its ongoing plan to not pull a Circuit City, Best Buy is reportedly in talks with CinemaNow and other, unnamed, movie services about launching a digital delivery arm as early as this summer. CinemaNow is well prepared to set up online video stores for others, with Blockbuster (bad example) and Dell already on board. Variety suggests Best Buy could market and sell Internet-connected TVs and set-top boxes that include CinemaNow access, with a shared revenue stream between the two, but nothing is final. Netflix has a hit on its hands with Watch Instantly so think it over, would you give an Insignia Blu-ray player or HDTV a second look if it could download movies?
Digital distribution not expected to rule packaged media anytime soon
Whoa, vaquero -- calm your jets. This is just a projection, which may or may not prove to be indicative of reality. That said, there's still quite a lot here to discuss, particularly since we've been hearing so much hubbub over the supposed explosion of digital distribution. Media Control GfK International has forecast that sales of Blu-ray Discs will increase some 150 percent to $2.9 billion, up from $1.1 billion in 2008. For those keeping count, digital distribution only generated $1.5 billion last year, and that's including every penny made from VOD and broadband services. In-Stat analyst Michael Paxton was quoted as saying that the "bandwidth required to stream any type of HD video is way beyond what most households have," and he continued by noting that the "convenience factor is still not there for streaming media." You owe it to yourself to hit up the read link for the full report before blasting your opinion in comments below, but we suppose we can't stop you either way.
Blockbuster takes a hint, makes push for better digital distribution model
It's no secret that the movie lovers of the world are leaning more and more towards that instantly gratifying digital download option, and judging by Q4 numbers, we'd say Netflix has done a better job at exploiting that demand than rival Blockbuster. In a move we're honestly thrilled to see happen, the latter firm is apparently waking up and attempting to play catch-up. Here in the past week Blockbuster has hired on former Philips executive Kevin Lewis as Senior Vice President of Digital Entertainment, a spot that'll be responsible for "strengthening commitment to multi-channel entertainment delivery." Additionally, Robert Barr was selected as VP to Blockbuster.com, a move that signals the company's seriousness about getting its online division formidable. As easy as it is to kick the guy that's already down, no consumer in their right mind wants Netflix running this show solo -- there's a word for that type of situation, and it ain't good for your wallet.[Image courtesy of Manda Mia]Read - Kevin Lewis hireRead - Robert Barr hire
Analyst sees Netflix adding surcharge if Watch Instantly gets too popular
Oh c'mon -- you had to know this was a possibility, right? As Netflix's Watch Instantly service becomes more viable and its library expands, more and more users are going to start tapping into those servers for instantaneous enjoyment. Eventually, suggests Cowen and Company analyst James Friedland, all that instant gratification could lead to more costs, and not surprisingly, it'll be the end-user paying up. As an increasing amount of subscribers use the online streaming feature, Netflix is asked to shell out more cash to studios for the content. Friedland predicts that "the company will charge an extra fee for the service [if it] starts to squeeze profit margins," just like it already did with Blu-ray Discs. We get the feeling most customers wouldn't balk at another $1 per month charge so long as the instant library started to include new releases, but if not, who knows what the backlash would be.
Netflix HD streaming shootout goes down at Engadget Classic
This is it, folks -- the shootout you've been waiting for. We've worked with our brethren over at Engadget Classic to assemble an end-all HD Netflix roundup, which pits the BD-P2500, BD300, TiVo HD, Xbox 360 and Roku Netflix Player against one another. We know you're salivating at the thought of it, so rather than just telling you who emerges victorious, we'll point you over and let you dig in yourself.
Blockbuster, Sonic Solutions team up for online movie delivery
Oh, Blockbuster -- what will we ever do with you? After first launching that branded MediaPoint box that all of four people purchased, you're now waltzing into the digital distribution party a few months late. According to a somewhat ambiguous report issued this morning, the movie giant has teamed up with Sonic Solutions in order to "give consumers access to a vast library of premium digital entertainment across a wide assortment of home and mobile electronic devices." In other words, those kosher with downloading content via Sonic's existing CinemaNow products and the like can soon have Blockbuster material on their handhelds, laptops and LCD-equipped threads. At least initially, BB will still be selling this material on a pay-per-view type system, though a subscription model could be implemented (read: should be implemented) shortly.[Via CNET]
Study finds interest high for connected HDTVs
Connected TVs are being blasted out hot and heavy here at CES, so it's a good thing that early studies are showing quite a bit of consumer interest. New research carried out by Oregon Networks has discovered that 71% of respondents would prefer a media browser to be installed within their next HDTV, and if for some reason it didn't, 45% said they'd be inclined to download one while 29% "definitely would" download one. Researchers also found that online video portals such as YouTube and Hulu were seen as value-add inclusions, and having them baked into HDTVs would enable families to spend more time together enjoying the spoils of digital video. Moreover, those polled voiced their love for being able to access networked media around the home on their sets, which makes us wonder if either technophiles were intentionally asked or if the world really is swaying to appreciate media streaming.
