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A Workable Downloadable Movies Business Model?
sane? writes "Following on from the music industry attempting to push up the cost of iTunes music downloads comes word that Sony is looking take robust control of the pricing for legal movie downloads - to the tune of $8 a movie. What is the maximum acceptable price that slashdot readers would give to different types of downloadable product, taking into account their perception of its true value to them? How can sensible pricing and workable business models be reconciled?"
Well, if Sony is going to be trying to install rootkits onto my computer, they could not pay me to download their movies. Screw-em.
However, barring malware distribution by major corporations, I believe that Apple has showed the industry exactly the business model to follow for media distribution, so, provided a fair and reasonable DRM policy like that of iTunes, I would be more than happy to pay $5/movie, but not more than that. Come on now, the industry has the opportunity here to make far more money off of not just recently released movies, but following a long-tail model, they could make obscene amounts of money off of older movies/content that is no longer available or being distributed. Think about all the old classic Sci-Fi movies or classic movies that are only available on TCM on occasion? What if you really could watch them "on demand" rather than waiting for them to rotate through. How about old TV shows?
Being able to watch movies at home on your computer or on your laptop on the plane is not just a convenience that they should be charging premium costs for. It is a mass market scheme to drive insanely high revenues if the price point is made attractive. If they were smart, these movies would be made available more cheaply and the "premium" experience could still be had at the theatre.
So, for an industry that already is sitting on media that is no longer generating significant income, they have the opportunity to create potential huge revenue streams for media already bought and paid for, so why gouge the customer? It is a surefire recipe for slower adoption, delayed revenue streams and potentially failure.
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If I can burn it to a DVD, watch it on ANY DVD player, and treat it as if it were mine (IE, let my friend borrow the disc), then yes, I'll pay 8 dollars/movie. Otherwise, I'll keep my netflix subscription thank you very much.
--sig fault--
I don't get this phenomenon of wanting to watch movies on your cell phone or iPod or even sitting at your desk in from of your computer.
To me, movies are a *big* experience; I want a nice big screen, a great sound system, dim the lights, a big bowl of popcorn and a giant soda.
Watching movies on "cell phone" is contrary to everything I hold dear about the cinematic experience.
Sam
If they don't have a wide selection (not just Sony movies), people will get dissuaded and it will fail ..in my opinion.
1) Wide selection
2) Convenience (that includes not instaling a rootkit on my PC, thanks)
3) Price
Of course I havent created a multi billion dollar corporation, so what do I know? I've watched some corps fail though.
I'd pay $10, no problem.
One of my main issues with going to the movies, outside of the stupidly high food prices, listening to ads before the movie starts, being asked to not pirate (When I just bought a ticket), is that my wife hates movies.
So I resort to downloading them off of the internet if I can't get a friend to go with me. I have been wanting to watch movies in theatre at home for a long time. I haven't been able to understand how we have Tivo, and I'm sure decent hardware encryption capabilities on my satellite or cable box, but I can't securely get movies in theatres.
Good news all around..
At most, I'd be willing to pay half of what it costs to buy the DVD at Wal-Mart. This assumes that the download is of comparable quality and includes any extras that are usually reserved for DVD.
I see little reason to pay more than half, considering how much cheaper it is for the studios to put it out on the internet rather than produce, package and ship DVD's. In fact, even if the internet downloaded movie costs half as much as the store bought DVD, the studio will still make more money from the transaction.
Of course, this is all a pipe-dream. Looking at the track record of greed and abuse by the movie studios and their lackeys, you can be sure that internet downloaded movies will have artificially high prices. They'll intro the service at $8 for all movies, and then after a year or so they'll start demanding $15 for new releases. And, to top it off: you know there is no way in hell that these downloads will be legally transferable. If I buy a DVD, and decide it blows, I can at least take it down to the pawn shop or give it to someone else. Can the same thing be said with these DRM laden downloads? I seriously doubt it.
/dev/random
It all depends on the quality of the video and how restrictive the DRM is. For a full length, DVD quality movie that can be burned to a DVD or compressed for a PVP, I think people would be willing to pay as much as $10. For something like Apple's current model (low res, high DRM), people aren't going to pay very much.
Of course the model changes when looking at other video content, such as television shows. With a TV show people are usually looking for something more disposeable. They're not likely to watch it more than once or twice so they probably won't pay as much. $2 is probably the ceiling here, but the quality probably doesn't need to be as high either.
This is a moot point right now. Until the content providers will allow these things to be burned to standard DVD's, people simply aren't going to buy them in large enough quantities to support the business model.
Well, they think they do. When I rent a movie from Blockbuster, rip it to my PC with DVDShrink and then I have a copy I can watch whenever I want (even though 99% of the time I only watch it once). What's the difference between that and letting me download the binary version for $2.99? If it saves me the trip to the store and back, I'll use the online service.
Sam
Put very simply, if Sony wants to charge $10 then they're going to have to bend over backwards on this.
A new release DVD cost, lets assume, $20.
$20 New DVD
$02 But I don't get packaging. Minus $2.
$01 I don't get fixed media. I have to store this myself. Minus $1
$05 DRMed to hell! I can't make backups! Minus $5.
$05 I have to download it and pay for the bandwidth. Minus $5.
----
$8
Well there's the $8. Now if they don't screw up ANYTHING else that's fine and I'd probably buy it... but only for a new DVD. No way would I shell out $8 for a DRM copy of 2001 or something. God help them if they install rootkits.
On a related note - I assume everyone saw the rather clever exploit for WoW using the Sony rootkit? If not, security focus has it.
Killfile(TGK)
No trees were killed in the creation of this post. However, many electrons were inconvenienced.
Sony has it all wrong. I don't want to pay a per-download fee. I want to pay a monthly fee, like I do for my satellite, internet, and Netflix subscription.
With my Netflix sub, I pay a flat fee, and I can basically have any movie I'd like to watch practically the day after tomorrow. This flattens the revenue stream for the company, which I'm sure pleases them immensely. I can get my copy of LOTR from Netflix, invite my friends over, watch it on my projector, and have a ball - there's no "per use" fee, no extra money because I had friends over, no "oversize image" charge.
It continually blows me away how clueless and out of touch Big Media is. Look, here's what we want: movies, on demand, on a subscription basis. The revenue potential is immense. We want to watch our first run movies in the theatre, with the option of watching them at home a week or two later. We want them at full DVD quality or better, and we want to be able to save them to our hard drives for convenient watching at a later date.
2 words market segmentation
Theres a legitimate watch-it-once market, and a legitimate I-want-the-box market. The question is whether the I'm-cool-with-a-digital-copy market is something that is acutally worth getting into.
If everyone in the digital-copy market is a subset of one of the other two markets the answer is a resounding no. However, if there are new people who don't rent movies because watching it once isn't enough, and also don't buy the movie for whatever reason then it may be a market worth persuing. If the movie company takes a larger hit from people defecting from the I-want-the-box catagory than they gain by tapping the new digital-copy market it's not worth persuing no matter how cool it is.
I use an existing model - Netflix - to determine reasonable pricing. It's about $1 per DVD (including any extras). For that dollar, Netflix is able to pay round-trip postage (i.e., network transport) and give the movie industry their cut.
Movie downloads should cost no more that $1.
Music downloads, compared to other media downloads (movies, above), should cost no more than 10 cents per track or $1 per album.
After all, I can go to my local library and get the DVDs/CDs for zero dollars.
Can You Say Linux? I Knew That You Could.
A really good business model would include a less expensive option with an expiration date for those who only wished to rent, and a more expensive option for those who wish to keep the videos around for future viewing, like me.
I'm thinking, like, $3 for rental or $6 for purchase. And, it would be nice to have the option after paying the $3 for rental to then kick in $3 more if you really liked it to invalidate the expiration date.
As long as there were no shady malware problems and stuff like that, that is somthing I could probably get behind. $8 or $10 is kind of pushing it for me when I don't get the shiny DVD and the cool packaging, but if they knocked it down a little more, it would start to get me thinking about it.
Given the 'discount bin' movies for $5-10. at most big box stores, already on a platter in a box, unless they were willing to provide content *ahead* of DVD release (unlikely), they're pricing themselves out of the market.
Add in the fact that most folks are more interested in watch-once than ownership, and the cost for Blockbuster, Netflix or even cable VOD is about half this, they're way off the mark.
Netflix has already established what the market will bear. Its a little under $2 per movie (12 movies a month for around $22). Yes, I know that's for rentals, not purchases (wink, nod). Sony is welcome to try for $8 but they're in for a painful learning experience if they do.
Moderating "-1, Disagree" is simple censorship. Have the guts to post your opinion.
I don't understand why people have a a problem with them making a profit.
Not the issue.
Look, they don't charge more for a DVD of a $100 million dollar movie than they do for a $10 million dollar movie. Production cost is largely irrelevant. What we're talking about (mainly) is optimal pricing.
When you have something like digital files, where the per-copy "production" cost is trivial, you have huge flexibility in pricing. $1 a copy may be a better price than $8 if you sell 20 times as many copies. What Sony et al need to figure out is that optimal price, and in so doing, they need to analyze what they're selling against. And they're selling against DVDs, Netflix, Peerflix, libraries, what's on TV, and legal and illegal sharing. You don't have to undercut all of these on price, but you do need to make your product more appealing than the alternatives in enough situations to make it worth it to customers.
It's my judgement and the judgement of others here that $8 is too high. Some here claim it is immorally too high. I disagree, morals are not the issue, competitive pricing is.
Ooh, a sarcasm detector. Oh, that's a real useful invention.
I mis-stated what I meant
/risk analysis and decide that the teeny risk of getting caught by the **AA is not a big deal. Yes, the copyright holders are trying to make this riskier, but honestly - unless they haul tens of thousands of people to courts, it's a losing battle.
:)
Replace my sentence with
"Basically what you can obtain today (ab)using bittorrent".
Not taking any stance on legality or morality or any of that. Fact is that lots of people are currently offering what lots of people want. For free. With the caveat that it's not legal. People make cost/benefit
The fact remains, as long as nobody is offering a competiting legal option that offers the same quality and ease of use with just as few strings attached, there is NO HOPE WHATSOEVER that the paid option would become popular.
- Choice 1: High quality, new releases, no DRM strings, pretty easy to find what you want (+free, illegal)
- Choice 2: Lesser quality, releases made available who knows when, braindead DRM restricting common fair uses, limited selection based on rightsholders whim (+pay money, legal)
The last bits - money/legality is NOT whats gonna make or break choice 2 from the plate. The other stuff decides if anyone is interested. The day someone rolls out a service that gives high quality, new releases (at least on par with DVD launch somewhere in the world), no DRM and wide selection, that someone will make a killing for the movie studios (and probably bunch of money themselves as well).
Any current halfhearted attempts at video download services are completely and utterly TRASHED by the free/illegal option. ONLY pay-to-download video services that offer what the purchasers want (just the quicktime/avi/divx/whatever, no strings, reasonable price/quality ratio) are, unsurprisingly, services offering p0rn... I mean what *other* stuff you can pay-for-DL at or above DVD resolutions without DRM crap except p0rn?
The ONE AND ONLY REASON iTunes became popular is because the 'DRM' is a non-DRM. You pay, you download, you burn CD, it's yours - plain and normal CD.
Give me 'You pay, you download, you burn DVD, it's yours to watch', and don't overcharge - instant hit. Doesn't matter if its 9GB to leech. People have broadband connections that are currently 95% unused. Some ISPs might groan, but people will happily leech away even if it takes couple of days to get the whole thing. Add crappier resolution versions for those who don't want to wait - give the choice to the customer (without charging extra).
What is the maximum acceptable price that slashdot readers would give to different types of downloadable product, taking into account their perception of its true value to them?
Personally, if content is DRM-crippled in any way (such that I cannot freely convert it and copy it to all devices I own, etc) then its true value to me is basically zero. I would be willing to pay $8.00 US to download a high-quality (TV-quality or better) movie that was not DRM-crippled. I would be willing to pay no more than about $0.50 US to download the same DRM-crippled content.
Moderator hint: a comment is neither "Flamebait" nor "Troll" if it is true.
Please, don't forget to include the $150 purchase price of Windows XP, since there's no way in hell that this will be available on Linux.
That's pre 7-11 thinking....