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|Steph Sums it up|
It’s the passing of an era. The kiosk has taken the video store’s place in rental market share, according to The NPD Group, with subscription services such as Netflix holding the biggest chunk of the rental market.
Consumers no longer trek to the local video store to choose an evening’s entertainment at the same rate they did in the past. Instead, a disc or two just shows up in the mail, or mom picks up a $1 rental while buying groceries. The communal experience of going to the local video store with the family or a group of friends to see what’s available and to agree on entertainment for the night is no longer an integral part of the American zeitgeist. Perusing the recommendations of the local store clerks or asking the customer in the aisle next to you, “Have you seen this? Is it good?” are a thing of the past. Movie rentals are no longer a destination pursuit.
It’s been a gradual shift. My 12-year-old, who once recalled “those boxy things we used to watch movies on” (VHS), owned most of the movies she wanted to view. My 8-year-old doesn’t remember a time when movies weren’t on little discs. Neither of them really did what I did as a kid, which was to go with my parents or a group of friends to the local video store to pick a movie to see for the night.
Home entertainment is increasingly an individual pursuit. Dad might be watching an action flick on the big screen while Mom updates her Facebook page and the kids use the Web to chat with friends or stream a TV show on their phone.
Each time I pass the deserted Blockbuster location near my house, I feel a bit sad. No store has yet opened in the empty spot, which still sports the trademark blue and yellow paint. You can just make out the ghostly outline of the Blockbuster logo.
Perhaps the video store will have a second act. Blockbuster may yet reinvent itself as it comes out of bankruptcy. Certainly, there are scrappy independent rentailers who have managed to weather change and forge a business that coexists with kiosks and Netflix.
But I do think the era of the communal video store trip is waning. The competition for each family member’s eyeballs is pulling Mom, Dad and the kids in different directions. The exploding variety of entertainment available is making the habit of hitting the video store a thing of the past.
By: Stephanie Prange
The ball-thingy fell out of my Blackberry. I tried to fix it, but various little plastic and metal parts kept falling out.
Should I get a new ball-thingy for my Blackberry? Should I get a new phone/e-mail device? My employer settled on the latter, but — unfortunately — it wouldn’t be available until after the Consumer Electronics Show.
Thus, I was stuck with a cumbersome, but working, black behemoth of a Blackberry with the old click wheel at CES. How embarrassing!
I might as well have walked around with a cell phone the size of a banana (if you don’t remember, see the last few scenes of My Best Friend’s Wedding).
It got me thinking about planned obsolescence, you know the idea that companies create things to become obsolete so you have to buy another version.
It has worked quite well in the home video business. Studios that sold classics to folks on VHS were able to get them to buy the same movie on DVD and perhaps yet again on Blu-ray Disc. Extra features via “special editions” offered other chances to prompt the public to buy yet again. The promise of 3D Blu-ray could extend that format even further, leading consumers to buy films they have in 2D in 3D as well. On the cusp of CES, Walt Disney Studios Home Entertainment announced plans to release at least 15 movies in 3D Blu-ray in 2011, including animated classics The Lion King and Beauty and the Beast, and current theatrical releases Tron: Legacy and Tangled.
But what comes after Blu-ray?
Streaming and download options, obviously, are the brave new world of home entertainment. But how will planned obsolescence look in that realm?
Certainly, download and streaming speeds will improve, offering better and better picture and sound quality that will someday match Blu-ray Disc.
Consumers will have to store their digital purchases on a hard drive of some sort or in the “cloud,” amongst the amorphous digital field controlled by outside servers.
In that environment, will anyone really want to “own” a movie or TV show?
As content becomes ephemeral, unattached to physical technology, many of the old models may fall by the wayside.
We are already seeing the concept of windows change. For instance, should the studios allow consumers to see movies in their homes shortly after they hit theaters — for a price? Perhaps, that is the new world of obsolescence — windows. If you want to get the latest title in the highest quality, you will need to buy into an earlier window. Still, windows are just part of the equation.
Digital technology is sure to offer more options than ever before for HOW consumers see a movie or TV show — on a small screen or large, with a low-quality picture for mobile or on high-definition for the big screen, just after it has left theaters or broadcast or many months or years after the last promotional spot has run.
The technologies that deliver movies are more diverse than ever, as are the options for consumers in viewing a particular movie or TV show. What may be obsolete to one consumer accustomed to seeing the latest content could be just the ticket to another who likes to view content on demand on a mobile phone, no matter how old it is.
Planned obsolescence in the content world could one day become obsolete.
By: Stephanie Prange
The recent dustup between Comcast and Netflix tech partner Level 3 Communications has brought to light a growing issue in the anything, anywhere, anytime brave new world of digital delivery.
Level 3 is protesting a new fee imposed on it by Comcast for transmitting movies and other content (the volume of which has jumped due to its new deal with Netflix).
Comcast claims it’s merely a distribution pipeline with limited resources, much like shelf space on the store floor. To expand that “shelf space” for Level 3’s new Netflix content, Comcast says it needs more compensation to deliver the greater flow of content. Level 3 says Comcast is doing its cable customers a disservice by not giving them what they want regardless of the content source.
Retailers for some time have charged fees to put products on endcaps or give them special placement. Shelf space is limited at a brick-and-mortar store and, in order to offer a broad range of products, the store may not necessarily be able to stock as much of a given product as consumers would like. The Internet, ostensibly, was supposed to be different, with consumers calling the shots on what they wanted to buy without restrictions. The new controversy calls that promised Internet nirvana into question.
In the case of Level 3, Comcast claims it is being asked to greatly increase the content delivery network’s allotted “shelf space” for its new Netflix traffic at no extra charge. Complicating the issue is the fact that Comcast itself wants the prime “shelf space” for its own cable and Xfinity service, which increasingly competes with Netflix streaming.
The key is how much traffic Comcast owes Level 3 at what price. It’s unclear just how much the extra traffic is costing Comcast, which is the heart of the problem.
Perhaps the upcoming FCC vote on this issue, dubbed “net neutrality,” will find some common ground. It may be that the Internet needs some sort of traffic cop to balance the wishes of consumers and streaming companies against the cost to companies that deliver that streaming and other services via the Web.
Unfortunately, the Internet’s “shelf space” may not be as easily defined as that of Walmart or Target. Which companies or persons bear which costs may be very difficult to determine.
By: Stephanie Prange
Drowned out by the Wall Street hype about the growth of digital delivery, industry pundits (myself included) have often wondered if the economics of streaming content would ever work out.
Netflix’s bow of a $7.99 streaming-only subscription in the United States this week, on the heels of Hulu’s rollout of its “premium” service at the same price (after a price drop), may finally enlighten us. Each move starts to give the industry some way of quantifying the streaming offerings out there.
I was a big critic of Netflix’s decision to offer streaming at no extra charge at the outset, concerned that when you offer something for free, consumers are reluctant to pay for it afterward. I may be proved wrong in my initial reluctance to giving customers something for free. But I think most would agree that the ultimate test is a streaming service that makes a profit without leaning on the old-fashioned disc rental business (in the case of Netflix) or on free, unlimited access (in the case of Hulu).
Still, Netflix has somewhat muddied the streaming waters by offering the streaming-only service at the same time it raises prices for disc rentals. If you want to rent Blu-ray discs from Netflix, there’s an even steeper premium.
Each is taking a big gamble, and it will be interesting to see which has its finger on the pulse of the consumer. We are getting much closer to finding out if there is actually any money in streaming.
One anecdote from my own life: My mother recently signed up for Netflix. She checks e-mail only about once a month, so the idea of her streaming anything seems remote. When she gets wind of the fact that the price may go up, I’m not so sure she will stay on. Will other disc renters feel the same way? Will the sub price for streaming plus disc rentals plus the premium for Blu-ray make some re-evaluate Netflix’s offering? A dollar or two to rent a disc from Redbox may start to look really inviting.
In a poll at hackingnetflix.com, by Nov. 23 nearly half of respondents said they wouldn’t change their Netflix plan, while about a third said they would downsize their plan to save money and about 10% would drop DVD rentals to go streaming-only; 10% said they would quit Netflix.
Still, the jury is out, and I give credit to Netflix and Hulu for trying to quantify their product. I’m ready to get past the hype and move toward digital profit. The ultimate goal is an entertainment industry in which content owners, creators and distributors can make a decent profit.
By: Stephanie Prange
While Wall Street pundits have proclaimed that Netflix’s streaming growth is coming at the expense of packaged media, it looks to me that the subscription service’s streaming is actually complementary to traditional forms of entertainment.
In a recent speech, Netflix chief content officer Ted Sarandos said repurposed television shows account for 50% of streaming content for Netflix subscribers (see story). And now Netflix has bowed a streaming-only option (see story).
Sarandos rightly said that subscribers like to stream in short bursts, and that the service is complementary to existing cable and satellite service.
“It fits peoples’ lifestyles,” he said.
That makes sense to me.
While on a plane, at the gym or waiting in line, I’d like the ability to stream a TV show on an iPod, iPad or other mobile device. I’m not exactly going to haul around a laptop to view an entire feature-length movie on Blu-ray Disc or DVD just to run errands.
Even on the plane, where there are so many interruptions, viewing a short TV show on my mobile device cuts down on the amount of equipment I have to lug around and offers a snack-sized bite of entertainment when I may not be able to get fully engrossed in a feature.
Having access to Netflix on your mobile device is like owning a library of TV reruns that can be viewed to pass the time. I recently saw an amusement park attendee viewing her iPad while waiting for her kids to get off a ride. I doubt she was perusing an feature-length drama. I’m betting a TV episode would last about as long as it would take for her kids to finish the ride (it was a slow day, after all).
On a mobile device to pass the time, lower-quality video streaming fits the bill. Most folks aren’t looking for top-notch picture and sound while on the move, but just a bit of entertainment to pass the time while they wait in line at the post office or trudge on the treadmill at the gym.
That’s why Blu-ray sales continue to grow at the same time streaming services such as Netflix also flourish. They serve two different, but ultimately complementary, consumer needs.
By: Stephanie Prange