Movie downloads will be a big business... but for whom?

Riders and runners

Will these film downloads be able to be burned into the new PSP miniature DVD format, the UMD? Or can they only be held in flash memory? And will there be cheap home based players that can also use the UMD format or play the flash memory? And will Sony launch the service with a big enough marketing bang? Will it become global, or just a US operation? Will it also include Sony Ericsson phones, which can play Sony flash memory?

All these questions will have to be answered before we can gauge the potential success of Sony’s online film service effort.

But even those answers will not be enough. There’s the simple and immediate issue of price. Apple realized early on that music cost too much, and if you were also taking away the cost of CD manufacture and distribution through a retail network, then surely it should cost substantially less to buy online music. Here is where it initially differed from the record labels.

The same needs to apply to any online film service. Also the small matter of content availability and giving an online film service “enough” content has to be considered.

The obsession that ALL VoD services, pay per view services and online movie rental services exhibit, is the idea that only the top 100 films are worth putting out.

This means that recent films which are in the same relatively early stage of their exploitation cycle are put side by side on the assumption that everyone that watches TV has already seen all the old movies. Classics are priced low and there are never enough of them. Fastweb, CinemaNow and Movielink, to name three services, all say that the big viewing potential are the top 100 to 150 films.

But this is a hangover of existing services. iTunes has managed to create an environment which can serve as a buying place for both old and new content. If you wish to have digital versions of all your old vinyl records, and put them on an iPod, it is possible. If you want to keep in touch with one specific genre, it is possible, if you want to own everything an artist has ever done, it is nearly possible.

The same needs to be possible in any successful version of an online film business. Simple search criteria for finding types of films, films with certain actors in, the entire works of a particular director, films which have the same or similar plot lines, or specific scenes in them. All this is a given and a standard way of indexing films and creating key metadata, still needs to be arrived at (it was the job of MPEG 7 but where is it?).

But unless you have a huge amount of film content, virtually every film that enjoyed widespread distribution throughout the last 25 years, a service will not become the natural home of film buffs. If a service has too many holes in it, customers will look elsewhere. If prices vary too much per film, people will look elsewhere. If films can either only be bought or rented, not both, then people will look elsewhere.

But looked at from the film producer’s point of view, this way of exploiting a back catalog is far more preferable than what happens right now, say in DVD sales or rental.

In retail sales or rental, a DVD takes up storage space, so is discontinued once people stop asking for it, which is often inside 12 months from its release. That means you have a year to make your money. After that there is no pay per view revenue and little DVD revenue, only TV repeats revenue, which is miniscule.

But a digital copy of a file takes up virtually no space, and on a file download service a single copy can support an entire sub-continent. So old films should never be out of date or out of print. This is the experience of the new online DVD rental companies like Netflix, and it’s an effect that someone on Wired Magazine nicknamed The Long Tail, because instead of revenues just dropping dead, they tail off for years after the film’s launch date.

But more questions need to be solved by any online film store which is going to have as much effect as iTunes had on music. The most important thing is how do these films get to your home/portable device?

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