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post #1 of 76 Old 02-03-2012, 06:45 AM - Thread Starter
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The major film studios think they've found a way to sell and deliver movies online. Will consumers buy it?

http://tech.fortune.cnn.com/2012/02/...source=cnn_bin

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post #2 of 76 Old 02-03-2012, 07:23 AM
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Amazon already has this for their mp3s. Part of me sees the appeal, and part of me wonders what you do when your internets goes down.

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post #3 of 76 Old 02-03-2012, 07:27 AM
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Not much appeal when the majority of isps either have or are threatening data usage caps. And I don't particularly like the fact that someone else is in control of my media. The cloud is not consumer friendly, but of course that's probably the reason why corporations are pushing it.
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post #4 of 76 Old 02-03-2012, 08:23 AM - Thread Starter
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IMO, this is the first step toward a standardized approach to streaming .. which could lead to a one web site central storage location .. and allow the studios to possibly control the content more than they can now ..

Whether Netflix / VUDU / Amazon and others will directly be effected, who knows .. however, I'm guessing Warner factored this in when they doubled the NF / RB window ..

Will consumers embrace it .. ?? If you get a free cloud copy of a movie when you buy a physical disc and you own it for life .. or, if you can just buy the cloud rights at a cheap price .. or even do just a one shot rental ..

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post #5 of 76 Old 02-03-2012, 08:46 AM
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I don't have a problem with UltraViolet, it makes sense to have one format to stream to multiple devices. It's no different than the cloud service Amazon, VUDU and CinemaNow use to store movies you buy. Having said that I have never bought a streaming movie because I like to have a physical copy, if I get a free digital copy then I think it's a bonus.
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post #6 of 76 Old 02-03-2012, 09:20 AM
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I have a problem with Ultraviolet, since it's the first step to studios forcing you to get content from them.

Why would they let Netflix or Vudu stream a movie to us when they can force us to stream from their service? What's their incentive to license any content to anyone?

It's no different than a network not allowing us to view their content on Hulu or HBO not licensing to Netflix. Only this time it's something I actually care about.

It's just a step for the studios to kill off the 3rd party rental services, IMO.
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post #7 of 76 Old 02-03-2012, 09:22 AM - Thread Starter
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I'm pretty sure that's the whole idea .. and the execs are likely rubbing their hands together in hopes that the plan works .. after all, that's been their goad since the first VHS tape was rented ..

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post #8 of 76 Old 02-03-2012, 09:47 AM
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At least the studios are starting to figure out streaming. Since the movies belong to them, they are within their rights to charge whatever they want for them and distribute them any way they choose. We as consumers, however, have the right to not use their services or pay their prices. Let the market decide. Embrace the streaming model you want to see succeed and inform others to do the same.

Having said all that, after paying large amounts of money for internet access, I will will tend to have very little left over to pay for individual content. This is something Hollywood needs to understand and I don't think they do yet.
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post #9 of 76 Old 02-03-2012, 10:00 AM - Thread Starter
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My own feelings are:

1) If content can be streamed from the studio supported central hub at a quality level similar to what VUDU offers, with various quality options, and the price is kept to a level that would be comparable to a RedBox BD rental .. let's say, $1.50 or a max of $2.00 since I won't have to drive anywhere twice .. and for that you would get the equivilent of a VUDU HDX feed ..

2) If they can come up with a truly one stop website .. and the content is available on, or even before disk release date (which they have been playing with on VUDU) ..

3) If you get a free cloud copy with a disk purchase that last a lifetime

I'd likely be in ..

Whether we like it or not, the expert opinion is BD is the last of the mainstream physical media .. so we may just have to adapt ..

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post #10 of 76 Old 02-03-2012, 10:08 AM
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Quote:
Originally Posted by mgkdragn View Post

1) If content can be streamed from the studio supported central hub at a quality level similar to what VUDU offers, with various quality options, and the price is kept to a level that would be comparable to a RedBox BD rental .. let's say, $1.50 or a max of $2.00 since I won't have to drive anywhere twice .. and for that you would get the equivilent of a VUDU HDX feed ..
.

I think that price is wishful thinking since most VOD and a la carte streamers are around the $4-$6 mark. I suppose they could drop it a bit to undercut the other guys, but I really don't see them dropping to Redbox prices if they can get away with it, especially since Redbox itself might raise prices in the future.

I suppose it loses you as a customer, but were you ever a customer of VUDU?

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post #11 of 76 Old 02-03-2012, 10:13 AM - Thread Starter
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Quote:
Originally Posted by Tulpa View Post

I think that price is wishful thinking since most VOD and a la carte streamers are around the $4-$6 mark. I suppose they could drop it a bit to undercut the other guys, but I really don't see them dropping to Redbox prices if they can get away with it, especially since Redbox itself might raise prices in the future.

I suppose it loses you as a customer, but were you ever a customer of VUDU?

No question .. that's why I used the word "If" ..

I will say, though, that they can sell the content direct for less money that a 3rd party provider charges the public and still make the same money they make now .. I don't know what a VOD / a la carte provider pays per unit / but it's certainly less than they charge the public ..

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post #12 of 76 Old 02-03-2012, 10:21 AM
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I just think their mentality would be "Joe Streamer pays X amount to stream VUDU. We could also charge X, or maybe slightly less than X to undercut VUDU." I don't see them even thinking of Redbox as a competitor, at least not one they need to drop prices to match.

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post #13 of 76 Old 02-03-2012, 10:35 AM - Thread Starter
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Maybe .. or they could drift to the Walmart mentality to drive out the competition .. who knows ..

I'll bet the pricing will be less, however .. they are eliminating the middle man ..

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post #14 of 76 Old 02-03-2012, 11:24 AM
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The problem, as I see it, with the studios directly competing with third parties is the issue with library titles, not so much new releases. If the studios succeed in this, they have zero incentive to license old content to people like Netflix and absolutely nothing will come without a per-view price. They may offer package deals from time to time, but I seriously doubt they will ever offer a buffet package except for huge amounts of money.

I still think the ideal service would be something like a one-stop service, like Netflix, with a set monthly fee and the gross revenues shared according to per view. It could even be tiered according to content age, etc. The more people watch your stuff, the more money you get. That keeps the content owners honest and the quality of content high.
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post #15 of 76 Old 02-03-2012, 12:08 PM
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I don't think the movie studios want to get rid of the middlemen(ie VUDU) for PPV because the studios get a percentage of every sale(probably 60-70%), as was mentioned rental prices are $4-6 and purchase prices are $15-20 so I think the studios have a big say on the price. I also agree that BD is the final disc format we will see as more consumers prefer to stream to their devices, many of us are tired of replacing our libraries with new formats.
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post #16 of 76 Old 02-03-2012, 12:20 PM - Thread Starter
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The studios have wanted direct control of the consumer market since the first VHS was rented .. and why not ..?? The make the content / they control the content and the pricing .. eliminating the middle man is the name of the game and the goal here ..

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post #17 of 76 Old 02-03-2012, 01:14 PM
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Quote:
Originally Posted by mgkdragn View Post

I will say, though, that they can sell the content direct for less money that a 3rd party provider charges the public and still make the same money they make now .. I don't know what a VOD / a la carte provider pays per unit / but it's certainly less than they charge the public ..

Don't underestimate the overhead in providing the streaming service. And not just the physical act of streaming you have to include all of the ongoing expenses... marketing, billing, support, etc. I'm not saying they can't deliver it less expensively although I don't think it's a slam dunk in ease or increased margins.

Pricing wise I believe they look at relative value (their perceived value) versus cost of delivery plus margin. So they will work backwards in charging what they can and only lowering it if the net result produces more profits. Even then they may fight lowering prices.

Personally, I think the content owners want to make as much as they can (who can blame them) and as such don't give a hoot who is or isn't involved.
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post #18 of 76 Old 02-03-2012, 01:46 PM
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That's why I think the current $4-$6 per movie pricing is here to stay. Ignoring Netflix's buffet pricing, if everyone is charging around that price, that's probably what the market supports, in expenses and profit margins.

No reason to drop the price unless you know what it nets you in the long run.

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post #19 of 76 Old 02-03-2012, 02:15 PM - Thread Starter
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The content providers without a doubt in my mind want to control their product .. that's why we have delay windows with some (not all) releases as it relates to NF / RB / CATV .. the studios will do whatever they can to maximize the money .. remember the self destruct DVD's .. ??

Thus, it makes perfect sense for them to control the content in-house .. they can deny any other provider other than themselves for any period of time they wish .. and, at the same time, reduce the cost to provide that content ..

And, since they are legally protected, they can, essentially, control any phase of release .. and have ..

And as far as the price of a movie rental, it's based on what the studios demand as well as the markup by the provider ..

VOD should actually be cheaper than disk .. not the other way around ..

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post #20 of 76 Old 02-03-2012, 02:59 PM
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Quote:
Originally Posted by mgkdragn View Post


And as far as the price of a movie rental, it's based on what the studios demand as well as the markup by the provider ..

And what the consumer is willing to pay. If no one would pay the $6 for an HDX VUDU movie, they'd either drop their prices or close up shop tomorrow.

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post #21 of 76 Old 02-03-2012, 03:06 PM
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Originally Posted by mgkdragn View Post

VOD should actually be cheaper than disk .. not the other way around ..

I totally agree, that's one reason I have never bought a digital movie. I might be inclined if the SD version was $6 and the HD was $10. I rent PPV movies all the time but I refuse to pay more than $4. Another reason for not buying digital movies is because I'm locked into one company, if I buy a new player it might not have VUDU(or Amazon, etc) on it. The last reason I don't buy digital movies is if VUDU(or Amazon, etc) goes broke then what will happen to my movies? Again I see UltraViolet as a bonus and wish all distributors would sign up, if and when my BD gets scratched I still can stream it for free on any device.
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post #22 of 76 Old 02-03-2012, 03:13 PM - Thread Starter
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And what the consumer is willing to pay. If no one would pay the $6 for an HDX VUDU movie, they'd either drop their prices or close up shop tomorrow.

I'd guess VUDU is not profitable or at least marginally if so .. but with the Walmart cash behind them, it's still trying to build that niche ..

If streaming is the future, then to make it grow as a medium, the price to rent must come down .. in order to convince the renter that they are better off with streamed delivery, and thus grow the customer base, when cheap disk rentals have become so popular (fueled the growth of NF as well as RB) ...

All I'm saying is if a $2.00 high quality stream on a solid new release were available, then it would expand the market .. and volume, if nothing else, would make up for lower pricing, regardless of the infrastucture cost ..

The reason the $6.00 stream / VOD is not replacing the disk is for those same reasons .. bring the price down and it will grow exponentially ..

I have no idea what the ultimate plan of the studios is .. but you can bet they have a plan ..

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post #23 of 76 Old 02-03-2012, 03:21 PM
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All I'm saying is if a $2.00 high quality stream on a solid new release were available, then it would expand the market .. and volume, if nothing else, would make up for lower pricing, regardless of the infrastucture cost ..

Risky proposition, IMO. I don't doubt they could expand that way, but it would get hairy really quick. Redbox is tough to compete against because they have little in the way of infrastructure costs once the kiosks are paid for, compared to ongoing costs that the streamers have (that bandwidth doesn't pay for itself.)

You can get the equivalent of $1 per disc through Netflix, but Netflix would rather you didn't. Remember when they tried to throttle people who rented as many discs as they could? That was and still is cutting into Netflix profits (some of which the streaming has made up.) Netflix would also love to dump the DVD side, they just botched it with the pricing fiasco and that Quikster trainwreck that they had to regroup. They're still trying to find out what exactly their pricing structure for their services should be.

Honestly, though, and I said this in another thread, rental prices today for anything is dirt cheap for what you get compared to how it used to be when Blockbuster and video stores ruled. IMO, $6 for an HD rental delivered to you in seconds isn't all that much.

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post #24 of 76 Old 02-03-2012, 03:31 PM - Thread Starter
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Quote:
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Risky proposition, IMO. Redbox is tough to compete against because they have little in the way of infrastructure costs once the kiosks are paid for, compared to ongoing costs that the streamers have.

You can get the equivalent of $1 per disc through Netflix, but Netflix would rather you didn't. Remember when they tried to throttle people who rented as many discs as they could? That was and still is cutting into Netflix profits (some of which the streaming has made up.) Netflix would also love to dump the DVD side, they just botched it with the pricing fiasco and that Quickster trainwreck that they had to regroup.

Yet, the experts continue to insist streaming is the future ..

Hastings, if he is to be trusted, has stated on more than one occasion that NF does not want to dump the disk .. at the same time, with Warners latest move, the studios are doing their level best to cramp the NF / RB cashflow .. because that's exactly what windows do .. and the longer the window, the tighter the cash flow gets .. physical media rental works off cash flow .. it always has .. which is much more of a profit drag than consumers quickly returning disks to get the price down to an average of a buck each ..

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post #25 of 76 Old 02-03-2012, 03:35 PM
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Oh, I don't disagree that streaming is the future. It's the reason I waited on buying a Blu-ray player that also added streaming and DLNA. I just think the pricing structure isn't going to come down anytime soon. Not without a humongous "streaming good, disks bad" PR push, though.

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post #26 of 76 Old 02-03-2012, 03:38 PM
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I wonder if the studios don't run a risk to losing control of movie distribution if streaming becomes a much bigger source of revenue than the box office and they cut the streaming services off. Wouldn't Apple, Netflix, and Amazon just start buying rights direct from the producers? I'm sure James Cameron could easily raise the necessary cash to produce Avatar 2 by selling the electronic distribution rights to one of the streaming services while still selling the theater distribution rights separate.
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post #27 of 76 Old 02-03-2012, 03:45 PM
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Wouldn’t Apple, Netflix, and Amazon just start buying rights direct from the producers?

It depends on the producer's existing contracts and relationships already established. While a handful of producers could pull it off, most would need the studios just to get the cash to make the films. Cameron could do it, but he also takes years to make an Avatar level film. I'm not sure the streamers could rely on him for consistent content.

You could do independent financing, but that tends to take forever (a studio already knows the risk, a hedge fund that hasn't invested in film before wants all the ducks in a row before signing off.)

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post #28 of 76 Old 02-03-2012, 03:57 PM
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I like the idea of Ultraviolet.....I currently have over 300 movies I own on VUDU.....I'm watching very carefully the development of UV.....There is supposed to be a download component to it at some point and THAT is what I want....Their CFF (Common File Format) is supposed to allow downloading.....I've tried a few films on CinemaNow and was able to download them to my WDTV Live Hub.....If there is only streaming, that is a deal-breaker for me....
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post #29 of 76 Old 02-03-2012, 05:19 PM
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Quote:
Originally Posted by mgkdragn View Post

All I'm saying is if a $2.00 high quality stream on a solid new release were available, then it would expand the market .. and volume, if nothing else, would make up for lower pricing, regardless of the infrastucture cost ..

The studios (honestly) believe such pricing undervalues their content. That's why they are so anti Redbox, Netflix, etc. They are currently fighting to recover this perceived value and have no interest in reducing prices. I think this was proven when Starz walked away from Netflix... have they struck a deal to replace those lost revenues? Right now they are giving up millions to fight the good fight...

Quote:


The reason the $6.00 stream / VOD is not replacing the disk is for those same reasons .. bring the price down and it will grow exponentially ..

Certainly lower pricing has the ability to increase sales but it doesn't guarantee increased profits. There is always a sweet spot... and as long as VOD as been around I can't believe they aren't aware of it. Not to say when the infrastructure is in place it won't be different.

Long term (far, far away) I see very few delivery providers. There will be clearing houses for virtually all streaming content. There won't be an endless number of streaming services offering their own or others content. Rather there will by few (ultimately one?) companies providing an integrated interface to your world of entertainment.
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post #30 of 76 Old 02-04-2012, 10:51 AM - Thread Starter
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The studios (honestly) believe such pricing undervalues their content. That's why they are so anti Redbox, Netflix, etc. They are currently fighting to recover this perceived value and have no interest in reducing prices. I think this was proven when Starz walked away from Netflix... have they struck a deal to replace those lost revenues? Right now they are giving up millions to fight the good fight...

Netflix offered STARZ a reasonable price to renew, substantially more than the original deal .. STARZ said no, we think it's worth more .. so far, no one has stepped up with a better offer, including Netflix .. so, STARZ suffers the financial loss .. not a good choice, IMO ..

Quote:
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Certainly lower pricing has the ability to increase sales but it doesn't guarantee increased profits. There is always a sweet spot... and as long as VOD as been around I can't believe they aren't aware of it. Not to say when the infrastructure is in place it won't be different.

The reason VOD has not ever become a prefered rental medium is the price .. and the price includes the cost to aquire and a markup .. as I said, the studios could price actually slightly higher than a VOD today and make more money than they are currently making as well as lower the price to the consumer .. voila, same or better profit margin ..

Good debate ..

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