In 1955, “The Seven Year Itch” starring Marilyn Monroe, was the first “edited for television” movie. This event was a milestone in the history of movie and video distribution. No longer did we have to go to a theater to see a movie.
In the 1980s, movie rentals, made possible with the widespread availability of videocassette recorders, became popular. Eventually, Blockbuster Video emerged as the movie rental king. Now, however, Blockbuster, hurt by the emergence of the home delivered rental and the pay-per-view movie, is more than a billion dollars in debt.
NetFlix pioneered the home delivered movie rental, an offshoot of the movie rental business, in 1999. NetFlix now offers more than 100,000 TV show and movie titles from their library. Wal-Mart, DVD Avenue, and Blockbuster now also offer DVD rentals at rates ranging from $9 up to $18 per month. With these services, the media (DVD format) is usually selected online, but delivered and returned through the mail. NetFlix currently has more than 8 million subscribers, with a goal of 20 million subscribers by the 2012.
Pay-per-view (PPV) service from a cable or satellite service provider is a form of movie download, only the signal does not travel over the Internet. The primary limitation for these services is the number of movies available. But PPV in this format is very popular. According to Kristie Fortner (Rentrak VP), 2007 orders of free on demand movies were up 66 percent, orders of subscription programs like Showtime or HBO were up 23 percent, and PPV movie rentals were up more than 40 percent.
Online (Internet) downloaded movies appear to be the dominant delivery technique of the future. Vudu, TiVo, Apple’s iTunes, NetFlix, and Amazon.com currently offer video content via a broadband Internet connection. However, the number of movies in the download libraries is a bit less than the DVD libraries, with about 10,000 movies now available for download on NetFlix.
Most of the services are either offering movies in HDTV format, or planning to do so soon. Video quality is difficult to compare between the different services. The video compression algorithm, called a Codec, plays a significant role. The best objective method to compare signal quality is bit-rate. A comparison of bit-rate for some of the current online video alternatives:
Service….. Bit-Rate (mbps)
Vudu HDX………. 9-20
Vudu HD……………. 4
Xbox………………… 7
iTunes………………. 4
Cable TV……… 10-15
Satellite………….. 6-8
Blu-Ray……………. 40
Prices are coming down for the equipment needed for these services. Vudu slashed the price of their set-top box to $99 for the 2008 Christmas season (from about $300), but $50 of movie credits needed to be purchased with the hardware.
Kudos to Vudu for their online service. The interface has been compared to IMDB.com (a movie-buff website). You see an actor, select the resume, and you can see what other movies they’ve been in, and easily find your selection. It’s makes the process absolutely pleasant.
A significant downside of video downloads in the unavailability of recent releases. Movies are generally unavailable for at least a month after release, in order to protect the brick and mortar movie theater market. This is unlikely to change, at least in the near-term.
According to Joshua Danovitz (TiVo), the issue of download limits differs in each country. In the United States and parts of Asia, bandwidth capacity is still available and Internet users have fewer constraints, while other countries, including Canada, the ISPs are starting to restrict users bandwidth consumption. The problem will only get worse with the increased popularity of video downloads. Today, more than half of Internet bandwidth utilization in the United States is peer-to-peer, and most of that is video download. Peer-to-peer traffic is notoriously hard to control.
It is likely that the movie distribution business will follow the path blazed by the audio distribution business. The only reason for the time lag is that video files are much larger, and the Online capability was not yet ready.