Downloadable Video: Will Anyone Actually Buy It?

by: Eric Savitz

The floodgates have opened: Now everyone is offering downloadable video. First, Amazon (NASDAQ:AMZN) unveiled Unbox. Then Apple (NASDAQ:AAPL) launched video downloads on iTunes. And now everyone wants to get in on the download thing. late last week reported that Wal-Mart (NYSE:WMT) is getting ready to launch a download service of its own, possibly offering free digital copies of movies to people who buy DVDs.

And Monday, Time Warner’s AOL (NYSE:TWX) and Intel (NASDAQ:INTC) made a fairly confusing announcement about making AOL Video content available to people with PCs that include Intel’s Viiv home entertainment technology. (Not too many people in that category, I bet.) “The joint effort delivers AOL Video’s leading online library of premium movies, full-length TV shows, music videos, concerts, sports videos, and more, as well as the ability to easily search videos from the Web to Intel Viiv technology-based PCs,” the companies said a release. “These videos can then be easily viewed on any large-screen television.”

On the AOL/Intel deal, the blogosphere is full of non-believers. For instance, Here’s ArsTechnica’s take:

[T]o get your purchases on the big screen (that is, your TV), the key ingredient will be Viiv, Intel’s media-center platform. This aspect of AOL’s plans seems particularly limited, owing to the fact that Viiv penetration can’t be particularly good. The brand is too new and, until now, there has been little incentive to buy it. We’d be very surprised if AOL keeps the Viiv-specific limitation intact, if indeed it’s really even there. Why limit your potential market to a subset of an already smallish Media Center elite?

Can AOL fight off Apple’s iTV? It’s hard to see how they can. Apple’s living room solution, while still months away, will eventually be platform agnostic. Although AOL has a wider range of studios signed up—including 20th Century Fox, Sony Pictures, Universal Pictures, and Warner Bros. Home Entertainment Group—consumers are currently limited to watching the films online, on a PC, or on portable video players.

Meanwhile, Paul Kedrosky thinks Wal-Mart should simply buy Amazon. (He’s been saying that for a while now.)

Mike Langberg, the tech columnist at the San Jose Mercury News, asserts that both the Amazon and Apple download offerings are “inferior to DVDs in just about every way.”

And before you try out Unbox, you might want to read Cory Doctorow’s astounding rant about Amazon’s terms of service.

To me, the bottom line is this: Sure, some people will want to watch movies on their PCs and mobile devices. And sure, some people will wile away the hours watching short clips on the Web. But most people want to watch their full-length movies on big screens in high-def quality, or at least in DVD quality, and at a reasonable price.

The endpoint is clear: we want to be able to flip on our mighty LCD or plasma and watch any movie we want, in high quality, on a whim. Until that happens, the DVD rental and sales business will remain alive and well. Someday, some geeky genius if going to figure how to make it all work in glorious digital high def. But not one has just yet.

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