Olyteddy, I completely agree with you. I have two kids, so we have a minivan that gets 17 MPG. Further, per the IRS, it costs $0.50 per mile to operate a car. Plus, with two kids (3 & 6 years old), I don't have the time to run to the store every time I want to see a movie.

I very much appreciate downloading movies, and think Vudu's 1080P product is a good deal, especially given my recent purchase of a projector. Vudu also offers a $0.99 movie every day - I've been able to watch stuff like The Expendables, Ray, Apocalypse Now, and, The Kids are All Right in 1080P/5.1 sound for $0.99. Now that's a bargain...

^ Agreed. I don't think the 4.99 or 5.99 is overpriced when you consider the convenience as well as the cost of driving to rent a disc or going to the theater (and don't get me started on babysitter and food expenses).

I think it just boils down to Netflix is so freaking cheap, that the VOD options are expensive by comparison. For example, my average Netflix rental (disc+streaming) is 64 cents, according to Feedfliks.

I rent Vudu or Zune titles occasionally, but it's just hard to justify spending that much when I have 50+ titles in my Netflix instant queue sitting there. Yes the the PQ/AQ blows Netflix away and there's newer titles, it's hard for me to justify the additional 4 or 5 bucks over the budget option.

But I really don't think the price is unfair for what it is. Would be nice if it was a buck cheaper though. I think just Redbox and Netflix has set the bar so low for cost that everything seems expensive by comparison.

it's all subjective.

Personally I don't make 200K+ a year, so that pricing for a rental seems outrageous to me. Especially when most of these movies are available in uncompressed BD with extras for purchase at $15-20. 1/3 of the cost just to stream it once at a slightly lower quality seems like a ripoff.

But I also rarely go to movies in the theatre, so maybe I'm a little more cost-conscious than some.

Exactly. I think a lot of us remember having to drive to the local BB and still paying $3 or $4 per movie, then having to return it the next day. By the time you factor in 2 trips for gas, and the cost of the movie, and of course the lost time in the car (and of course the idiot behind the counter), a movie really ended up costing 4-5 bucks or more and maybe 30-60 minutes in the car.

10 years later and I can sit on my couch and start watching the movie in a few seconds for pretty much the same price seems reasonable.

But of course that's subjective because Netflix and Redbox have changed what a "reasonable" cost means to people because they are so comparatively cheap. As I said, I primarily use Netflix because I personally don't feel the additional quality of Vudu or Zune is worth paying 4-5 bucks more than the Netflix title is going to cost me, and I'm fine with waiting to see the new release on disc (much the same reason I don't feel the additional quality or special features or seeing it 28 days earlier is worth buying a BD for $15-$20 over what the rental version is going to cost me)

Netflix built a huge infrastructure of distribution centers, maintains a huge inventory of product, ships physical discs all over the country, and yet can profitably rent BD releases to me for about $1.50 per title if I watch them promptly and get the full 8 per month my mail service will support.

Redbox built a huge infrastructure of physical machines, set up a billing network, bought the discs, transports them around, maintains inventory, etc, etc, for $1.50 for new-release BD's and is also profitable.

So why can't streaming services price a single HD stream of the same titles for less than $4-5?

I think it's because they're banking on lazy or impatient (and I'm not pointing at anyone in this thread) peoples' cost/benefit for waiting for a disc vs. just hitting "purchase" on their remote. Also, trying to strike while the iron is hot and before people starting actually thinking the cost through. In a few years, it'll either be all $5 a movie or $1 a movie - there won't be much room for in between IMO. Not with the public more aware of and with easy access to cheaper options for streaming.

Easy answer: because studios won't allow them to... Big hollyweird is doing whatever they can to get as much profits as possible.

The major studios are run by complete idiots.

Technical issues aside, if they could get every household in the country to sign up at $10 a month for streaming access to every movie ever made, their yearly revenues would actually go up by $1.5 billion a year, plus no more distribution costs, printing, storage, shipping, piracy, etc. Their only costs would be to make the actual movies. The TV networks could do the same for probably $5 a month. Like I said, complete idiots!

thank you .. I could not have said it better myself ..

I think there are many factors including...

• Relative value - price is often based on perceived value not the actual cost. New releases have much more value (greater demand).
• Different market costs - the market for streaming is much smaller than the other forms as such you need to charge more to make the effort worthwhile.

As with most pricing they find the sweet spot. If they raise it they lose money and if they lower it they lose money. Such that if they charge more the amount of lost sales more than offset the increase. If they lower the cost the increased sales doesn't offset the price drop.

Overall I tend to think they work in reverse (to a large degree). How much money do I need to make this worthwhile (return on investment). Divide the amount by the expected number of customers (throw in the above) and price it accordingly.


Unfortunately they live in the real world.

Curiously... has anyone seen reported what's the average number of days for a Redbox rental? Surely it can't be 1.0.

How is that factoring in the value of their catalogs? Netflix is proving there is much value in them if spread among many people.


If 99% of households can have a TV, car, etc., they can certainly have a universal streaming service. I'm not saying it would be easy or cheap to set up, but we already pay for bandwidth as it is. This cost would reflect only the actual content. The point I was making is that the studios and networks as a whole can practically give their content away and still make as much money as they are making now. All they have to do is get everyone on board.

Are you saying you would not pay $15 a month for every movie and TV show ever made? I sure would. I wouldn't even mind if they held new content back by six months so they could sell into other channels, such as theaters, physical discs, PPV etc., if the demand was there.

Pie in the sky? I don't see why it should be. It's an elegant solution to what we have now and the content owners actually gain in the deal. They have practically a guaranteed revenue stream going forward at no cost to them.

I love the simpleton view that ignores that making movies is a business and not a charity service for providing cheap entertainment.

And how many brand, model and style of TV, car, etc do we have?

I'm not sure what you are asking. Not far from me is a company which represents only dead celebrities.

http://www.cbsnews.com/stories/2010/...n6598800.shtml
http://www.cmgworldwide.com/index.html
http://www.cmgworldwide.com/offices/indy.html

Their goal is to obtain the highest value they can for their clients and I see the studios much the same with their catalogs. Although I'm sure their revenues are taken into account much earlier on.


More not living in the real world. For the foreseeable future they couldn't give their content to everyone even if they wanted.


At that price the number of new movies and TV shows would be zero.

Clearly people are confusing the physical world with the digital world. Once a thing is digitized, it is infinitely profitable at practically zero extra cost. Does anyone really think people everywhere won't soon figure that out?

The point is those are not the content creators or owners. They are the leaches sucking off the host. In their world, they are performing a great service, but in reality they create nothing (for a small fee, of course)

Charles,
Besides, the figures quoted in the articles are already factored into the studio's and network's gross revenues. That's yet another set of fees they would get to keep by streaming their own content. You just pointed out another plus for the content owners to switch.

You simply are not understanding the economy of scale behind what I am saying.

Think of it this way: Your value as an employee is the sum of your lifetime of labor, correct? The value of a movie studio is essentially the same thing except that you cannot get a direct revenue stream from your past labor, but movie studios can.

There are 100 million households in the US. At $10 a month, that's $12 billion a year, which is $1.5 billion more than the top 12 studios grossed last year. The more movies they make available, the more people will buy into this. It's a lot less risky business model than packaging and repackaging discs or hoping the next movie will bail you out for another year. Because it's so easy to track usage from streaming, it's a simple matter to distribute revenue. If you make movies that people want to watch, you get more money. Just like it works now, but the beauty of it is that you have a constant revenue stream from your catalog titles rather than surviving movie to movie. Does that make business sense to you?

Again, would you pay $XX a month to have every movie made available for streaming?

You are assuming that 100 million have TV's and an ISP capable of delivering a streaming service.
Let's also not forgot they need a device to stream the content as well.

I don't see SW companies giving away content at very low prices.
Just because it's digital doesn't mean the consumer can dictate the price when demand I high.
Gas anyone?

I presume the same would be for an auction house selling paintings. Sorry, but they are the ones who create the value. Excuse me but I have zero interest in further responses and added an ignore.

Here's a link to how Wall Street is starting to view the streaming model. Read especially the comments on page 4, just above Conclusions. There are also some nice polling numbers further down.

http://www.scribd.com/doc/48599776/Netflix-Tilson

Sorry you won't read this, but who creates the value here? The auction house did not create, nor do they own the paintings, they are merely middlemen. The technology now exists to sell digital media directly to the customer on a global scale. If the studios play their hand right, everyone can win.

p.s. I do apologize if I offended you. I used strong imagery to make my point. It was not personal.

Me thinks you would make a fantastic streaming evangelist or something. But I think then you would see that not everyone, esp the studios who actually own the content, agrees with you...

It's a tough crowd here The cynicism is pretty thick. My time frame is 10 years. We'll see what happens. I'm pretty sure it will be much closer to what I think it will be than what it is currently.

Plasmaman42 asked if I was assuming enough people had TV's and ISP's to stream, so I looked it up. Even I was too conservative. According to the cable industry, homes passed by high-speed internet service number over 120 million but only 43 million pay for HS internet currently. Even cable television penetration is less than 50%. But the basic infrastructure is already there to allow streaming to just about every home in the country.

http://www.ncta.com/Statistics.aspx

Nielsen also reports households with TV's at 114 million.

http://blog.nielsen.com/nielsenwire/...9-2010-season/

It has begun.....

http://www.amazon.com/Video-On-Deman...&node=16261631

Nice. For $80 a year, it's pretty cheap (like $6.66/month). Guess I'll be signing up to compliment Netflix.

oooh...and there's a one month free trial. Perfect.

hmmm....... I have prime. I wonder how this works on my Tivo.

Showing 1 - 24 of 2,153 Results

What content have you found them to be offering exclusively (not available via Netflix)?

I haven't really looked, but just glancing at the front page I see a few (without checking every one, I know Unstoppable, Syrianna, It's Kind Of A Funny Story aren't on Netflix)

I honestly haven't paid much attention to Amazon VOD, but I think they are HD/5.1 (and I know someone mentioned the HD looks better than Netflix, but not sure how true that is since I use Netflix on the PS3 and the HD stuff looks pretty decent). I'll have to look a bit. I'm pretty sure I can get it on the 360 (can't I?). Maybe I jumped the gun a bit since I was pretty sure you could. I'll have to do some research later.

I don't think the site is set up very good.....I don't really understand it. Oh wait, it looks like the Prime buffet plan only gets a subset available of what's actually available (2,153 results). But if you click on movies or TV on the left side, there are like 34,800 movies and 6,248 tv shows. But I guess those aren't included in Prime? Ok, maybe I got excited for nothing....2100 movies and TV shows isn't going to cut it. I saw Unstoppable on the front page and got excited. I just glanced through the first 8-10 pages of prime eligible stuff and saw squat.

Lame But at least it's a start, I suppose.

http://www.amazon.com/s/ref=s9_al_bw..._rd_i=16261631

This link displays all of the free Prime titles. I looked at the first 20 pages (500 titles or so) and wasn't impressed. Over time who knows. Perhaps a bidding war breaks out and both offer enough exclusives to become compelling. I can see existing Prime members using it and perhaps not signing up for Netflix but right now I can't see streamers adding or switching completely (to any degree).