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?"

Comments

iTunes

[BWJones]

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.

Re:iTunes

[BWJones]

Don't try your mind tricks on me young man. :-) Seriously though, the amount I will pay is what I believe it is worth to me, and that is up to $5.00. I go to matinees specifically because the average Hollywood fare is simply not worth the $7-14 that theaters charge for prime time showings and it is not because money is tight for me. Quite the contrary, I am more than happy to pay extra for quality products, but in this case, movies are entertainment that while entertaining are usually are quite dispensable and having to deal with an increasingly rude population who does not have any concept of proper theatre etiquette simply drives me away from theaters. There are rare cinematic exceptions however.

Re:iTunes

[Michalson]

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

Could you explain that point further? If you want everyone to follow Apple's "Fairplay(TM)" DRM model, what is it specifically about that model that makes it more attractive then the others? What where your logical reasons for choosing that as the best DRM solution?

It can't be the robustness of the data - if the latest iTunes update (or OS X update) kills your harddrive (again), or the computer simply dies as they sometimes do, it's Apple's policy to charge you for the music all over again, even though they have the records showing you legally own it. Apple DRM certainly isn't making digital music as long lasting as the physical disk technology. Even Apple's closest competitor offers a partial though far from perfect solution - the proof of ownership can be backed up seperate from the music (meaning you can make as many copies as you want), and then can be used to obtain the music without being charged again if you suffer a harddrive crash.

It can't be the number of copies you're allowed - most other DRM schemes also allow 3 copies (again, Apple's closest competitor allows any number of copies to be specified, and can even allow the ability to create "lending" copies - you can give a time limited copy to a someone to try out, and you don't have to worry about them returning the licence to you)

It can't be the ability to burn to CD - again, Apple's competitors support this too.

It can't be the future proofness of the format - "Fairplay" is currently glued to Apple, you can't play Apple DRM music on anything that doesn't have an Apple logo. One of the best arguments for open source is that closed source software leads to documents that can no longer be opened because the application required only exists for an obsolete platform. With "Fairplay", all the eggs are with one company - if Apple, just one company, disappeared, your music would left stuck in a format dieing of player entropy. This is what we call "vender lockin", and it's a bad thing. Some of Apple's competitors avoid this through partially open standards, other avoid this by spreading the format to as many companies as possible - if one dies, the others can fill the gap.

So please help us understand what specific, technological or contract, parts of Apple DRM we should be trying to make more widespread. Why is "Fairplay(TM)" so superior, other then the fact that it lives within the safe confines of the Apple reality distortion field, guarded by a phalanx of Apple fanbois?

Re:iTunes

[bkr1_2k]

Keep in mind I am in the US and consider my price points accordingly:

I would pay the price of a movie ticket or perhaps $10, whichever is cheaper. That, to me, is a reasonable price. Not as much as a DVD (yes I know you can buy some DVDs for under $10) because I would have to provide my own media to use if I wanted to travel with it, but certainly as much as I would pay to see it once in a theater.

Unless this is a temporary use model that I couldn't save and reuse. If this is a temporary use model, I wouldn't pay more than $2, personally. I can rent movies for that price via netflix and other stores so why would I want to pay more?

Re:iTunes

[2nd Post!]

If you step on your CD, it is Best Buy's policy to charge you for a second CD, even if you have a receipt proving you legally purchased said CD last month.

Apple's policy, however, does not prevent you from doing four things:
Burn the music to a CD (something like 10 at a time; change the playlist and burn ad infinitum)
Burn the file to a CD (infinite times)
Copy the file to another HD (infinite times)
Load the file to an iPod (infinite times)

In any event, only an act of God would wipe out your clever backups.

The model that Apple has demonstrated to it's success is threefold:
1) Software doesn't suck. The same software and interface used to interact with your own music library is the basis for the interface for their online music store.
2) Hardware that doesn't suck. The iPod
3) THe price doesn't suck. If Sony wants to charge 8, I'm willing to bet Apple will charge less ($4.99? $3.99?) for a movie.

Fairplay can be actually played on HP Media Center PCs, Motorola ROKRs and soon RAZRs, iPods, Macs, and PCs. More to the point, you can burn to a CD and play on any CD player you want; there are also numerous unlocking tools of dubious legality, but not of dubious morality.

So if Apple disappeared, no, the music would not die; you would still have your iPod, still have your iTunes, still have your CD player, etc.

The reason Fairplay is superior is that it was the first that allowed you to:
1) Connect a song from a PC to an MP3 player without extra charges
2) Burn said song to a CD any number of times, with a few constraints
3) Make as many copies of the file as you want

If the other DRM have caught up, it isn't because Fairplay isn't superior; it's because it is, and the others adopted Fairplay's design.

Re:iTunes

[99BottlesOfBeerInMyF]

It can't be the ability to burn to CD - again, Apple's competitors support this too.

Well originally that was a big part of it since Apple's competitor's did not allow burning until they were beaten to a pulp by Apple. Many people who evaluated the different DRM schemes in the past have not realized this is now available on other DRM systems. Also for Windows Media based systems less technical users don't realize that the CD is a way of removing DRM, since Windows Media Player applies DRM to ripped files by default, unlike iTunes.

I think a big part of the reason people favor Apple's scheme is that it does not get in their way (for the most part). People are unhappy with Real and WM because when they try to play them on a portable it does not work (most portables are iPods). That is just the way the market has shaped up and has nothing to do with the DRM scheme per-se. For slightly more tech savvy people, look at the competition. No one trusts Real since they killed their reputation with spyware. No one trusts MS since they always abuse their formats to lock people in. Who else is a major player in the space?

I've purchased songs from the iTunes store, but not because their DRM is any better (now) but because they had what I wanted and it was unavailable elsewhere and because they don't use a stupid rental scheme, and because they were not too expensive, and because I could take the DRM off of the music easily and legally using the CD burning method, or using easily available freeware without losing any quality.

I agree that DRM in general, and closed, proprietary DRM is a terrible thing for the industry, but at the same time if I am going to buy something with DRM on it, I'd rather it was from Apple rather than Real or Microsoft simply because I trust them more. Also, it is apparent that Apple executives know that DRM is useless and will always be able to be bypassed, so they don't try too hard to do annoying new things with it. Basically the DRM is not really any better, just the people providing it are more trustworthy (IMHO).

Not $8 for Consumers

[duerra]

FTFA, $8 is the price that Sony is expected to be charging the content distributors. This is not the price that we would be paying as end consumers, which would look more like it would be to the tune of $10, or something along those lines.

Of course, this would probably all be highly compressed, DRMed to hell video files, too. Given that I can go to a local Wal-Mart or Target and get a lot of these old titles for $6 at full quality, and make my backups using something like CloneDVD, I'm not likely to be purchasing a $10 movie download anytime soon.

Re:Not $8 for Consumers

[NoMaster]

$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

Not being able to perform simple subtraction? Priceless...

rental cost

[SamSeaborn]

Unlike songs, I don't want to *own* movies. Just watch them once.

For me, the cost would have to be the same or less than a movie rental for me to buy in. $8 is too much. I'd say $2.99 is about right -- and I don't care if the $2.99 movie expires after a certain period of time or anything. Like I said, 99% of the time I just watch a movie once.

Sam

Hard Copy

[NETHED]

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.

Too expensive

[slavemowgli]

It's hard to say where the limit would be, but 8 bucks simply is too much - I can go to a video rental place and get pretty much every movie I want for considerably less than that (the local one in the town where I live charges up to 4,50 per movie, depending on how recent it is; not sure what the big chains take).

Sure, it requires me to walk there first (I don't have to drive, considering that it's pretty much just across the street), and they might not have what I'm looking for; but on the upside, I get the movie within minutes instead of having to wait for a big download first.

So for me at least, an online place would have to be considerably cheaper than a real store in order to be attractive. And considering that a lot of the costs associated with having an actual walk-in store with real DVDs and real employees don't exist here, I'd say that they could still make a comparable amount of money even if they charged less than the offline stores do, too.

Movies...

[Manip]

If we are talking new "On at the cinema" movies, I would pay just under what the local cinema charges me; primarily because you get surround sound at the cinema.

If we are talking "Out on DVD" movies, I would pay up to 50% of the cost of the DVD version... I mean with a internet version you get "nothing"; with the DVD version you get higher quality, a box, a disk and perhaps bonus features.

I am from the UK -- And purchased a couple of lost episodes even though the DVD versions of series 2 will be cheaper; but those episodes aren't on in the UK yet, and thus the extra cost was well worth it.

I would also be willing to pay a smaller fee to "rent" an internet movie (one that stops playing after n time limit)... So like $3.50 and you get to watch a new movie for a week wouldn't be all too crazy...

Re:First post

[SamSeaborn]

watch it anywhere like cell phone using streaming video as well

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

$8!!!

[alecks]

For 8 bucks they better include at least 20 min of previews before the movie

Use an existing model

[macemoneta]

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.

Re:Just for comparison...

[Zenaku]

Hell, I think 5 bucks is too much. I would have said $3.50, maybe $4.00. Here's why.

$20 bucks IS way too much to pay for a DVD. I will do it occassionally, for films I really love, and will watch over and over, films where every deleted scene, commentary track, and outtake are precious to me.

There aren't very many of those.

Most films I will watch once, and if I can keep them around, maybe a couple more times later on, if I want to show them to a friend that hasn't watched them. Hell, seeing them in the theatre is cheaper than getting a DVD if you only watch it once or twice.

Now, a rental price is more reasonable. 4 or 5 bucks. But I still never do that, because it is inconvenient. The price is fair for the value of the entertainment I get, but they don't get very many sales out of me because it takes too much effort on my part.

Enter netflix -- The monthly subscription model means I am spending way more money on movies than I would without netflix. The price per movie is less than a rental, but the convenience means that I watch way more movies. Win-win. I get more movies, and they get more money. . . just less money PER movie. It's like a discount for buying in bulk, and giving them a guaranteed amount of business each month.

Any downloadable movie distribution service needs to accept the same philosophy. Since the product isn't physical, and they don't actually deplete their stock of content by letting me download it, it isn't about how much 1 movie should be worth -- it is about what price will maximize the total amount that I spend.

If they will sell me one downloaded movie for 5 bucks, I might buy one, now and again. Maybe once a month. But if they sell them to me for 3 bucks each, I'll probably buy two a month. They just made an extra dollar by charging me less per film.

Netflix

[Spazmania]

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.