Tuesday, November 25, 2008

Netflix streaming device could spell the end of DVDs

It's kind of ironic that I saw the following article this morning after ordering my new Netflix streaming video device. HBO sounds totally arrogant but they had better be "newly afraid". Although HBO has made some outstanding miniseries like "Rome" and "Band of Brothers", I, like the man in this article, don't see any reason to pay a hefty subscription fee to have access to a channel that I, otherwise, rarely watch. Ditto for Showtime. I subscribed to Showtime just long enough to watch "The Tudors", then disconnected it as soon as the current season aired. If I don't have any other way to watch Season 3 in March, I will once more subscribe for the 9 or 10 weeks it takes to watch it then unsubscribe again. HBO and Showtime should take notice of Starz recent partnership with Netflix which allows Netflix subscribers (and there are millions of us!) to stream Starz channel movies and programs over our internet ready devices for no extra charge. Such devices include those that many people already have including wireless Blu-Ray DVD players and X-Box game systems. I don't have either one so I bought the basic streaming Netflix player for $99. (I've been thinking about a Wii because I like the movement integration but as of now it is not equipped for internet streaming).

I'd been catching up on "Heroes", watching on my computer, but now I can join the rest of my family in the living room on the big screen TV (no, I haven't coughed up enough for an HD replacement yet). Since I have a Qwest DSL wireless modem, I have wireless coverage in the living room and I was told by Netflix customer service that the player will auto detect it and no extra equipment is needed. I'll report back once it gets here.

As for watching streaming video as opposed to buying a DVD, I have actually lost interest in buying most DVDs. I made an exception for the Oscar-nominated foreign film, "Mongol", that I saw at the local Arts theater and really liked. I wanted to watch it again more carefully now that I have listened to Conn Iggulden's novel "Genghis: Birth of an Empire" that I found to be outstanding. I wanted to study the historical differences between the two films. Conn Iggulden was quite up front in his author's notes about where he diverged from actual history but I thought it would be interesting to see the differences. I am also interested in any supplementary material that was produced for the DVD. Quite honestly, I think it's going to come down to being the extra features as the only reason to buy a DVD in the future. If those are provided online as well, there won't even be that reason left.

MATTHEW BOWERS, of Chicago, has been paying to have HBO piped into his home every month for nearly two decades. He tunes in for the occasional episode of “Entourage” and every couple of months orders a movie on demand. Recently, the whole family watched “Sweeney Todd: The Demon Barber of Fleet Street.”

But when his company laid him off in September, he started to think about the value he was getting out of the premium cable channel. “It’s ridiculous to pay for this service I rarely use when I can get the same stuff online and save a lot of money,” he said. The result? HBO is losing a customer.

Does an economy in tatters slow down or speed up the shift to watching TV shows and movies on the Web and mobile devices? The entertainment industry doesn’t like the answer that is rapidly becoming clear: A global economic crisis almost certainly means a sharp acceleration in the move to new ways of consuming content, setting the stage for a new clash between consumers and studios.

Historically, the movie factories haven’t been terribly afraid of tough economic times. In fact, they have almost welcomed them. During the Great Depression, people continued to turn to the movies for escape. VHS rentals boomed during the recession of the early 1980s, while DVDs got a boost from the downturn earlier this decade.

And an HBO spokesman said he was sorry to see Mr. Bowers go, but he dismissed the notion that many other people would be joining him. “No industry is recession-proof, but pay television has performed very well in previous downturns,” said the spokesman, Jeff Cusson.

But the current gloom has the Hollywood establishment rattled. DVDs are now where the industry makes its money, and Nielsen VideoScan reported a 9 percent drop in DVD sales in the third quarter over the quarter a year earlier — before the economy ran into a buzz saw. In television, crucial car advertising is drying up.

Moreover, consumers now have cheaper ways to see movies and TV shows. Hulu. Vudu. YouTube. Netflix. Amazon Video on Demand. iTunes. Crackle. FunLittleMovies.com. Movielink. CinemaNow. The list goes on. As a result, movie and television studios seem more intent than ever on protecting their established businesses from cannibalization by new media, which are growing rapidly but still generating very little revenue comparatively.

Warner Brothers Television, which supplies “The Mentalist” and “Eleventh Hour” to CBS, recently asked the network to pull full-length episodes from its Web site, along with the comedy “Big Bang Theory.” The thinking is that they were potentially too hurtful to old-fashioned syndication sales to television stations down the road.

Metro-Goldwyn-Mayer’s recent deal with YouTube to stream full-length movies and TV episodes did not include any of the studio’s prize assets like the James Bond movies or “Rocky.” Instead, MGM is giving YouTube movies like the flop “Bulletproof Monk” and reruns of the original “American Gladiators” series — a safe deal for this stage of the game. (MGM says that more-sought-after content will follow, and notes that it has been one of the more aggressive movie studios when it comes to disseminating content on new platforms.)

Studio experimentation in digital distribution is going by the wayside, too. When DVD sales were booming a couple of years ago, for instance, companies could afford to stream a TV show here and a movie there. But with operating income at 20th Century Fox down 31 percent in the recent quarter over the year-earlier period, and Walt Disney Pictures down 42 percent, studios are newly afraid..." - More at the NY Times

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