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Panel Says VOD's Time Has Come

29 Mar, 2006 By: Jessica Wolf

It's clear that brick-and-mortar video rental businesses such as Blockbuster and Movie Gallery are going to have to “evolve or die,” said panelists from the video-on-demand realm speaking at the Digital Hollywood Conference in Santa Monica March 29.

The handwriting is on the wall, said Sean Besser, director of business development for studio-backed VOD service Movielink; consumers want digital delivery.

“As consumers get more connected and start building their digital libraries, there will be less if no need for brick-and-mortar stores,” he said.

The rental chains are the likeliest to lose out if it comes to shifting over and launching their own digital delivery options, Besser said.

“They aren't going to be able to move as swiftly as us,” he said.

That doesn't mean it's clear-sailing ahead for VOD companies, though panelists said it is infinitely easier to license content for their digital offerings than it was five years ago.

April 4 marks an industry first and a harbinger of what's to come for feature film, said Carl Crabill, VP of sales and marketing for VOD service MovieBeam, as Disney's The Chronicles of Narnia: The Lion, the Witch and the Wardrobe becomes available on that service the same day the hit movie streets on DVD.

Meanwhile, while bandwith is getting wider, faster and more affordable, digital files are also getting larger and more complex, panelists said.

DVD quality or better is the standard they have to deliver for the highest satisfaction, panelists said.

What's even more ambiguous about their exploding industry, these VOD providers agreed, is that they really must, at this point, be all things to all people.

Downloaders want content cheap, they want access to “everything that's ever been made” and they want to be able to use that content any way they want, said Curt Marvis, CEO of Web-based VOD service CinemaNow.

Each consumer is different and their tastes and desires for content can change on a dime, Besser said.

The solution, from a business-model point of view, is an “a la carte” mentality, said Rex Wong, CEO of Dave.tv.

“Let the user decide,” he said.

While feature films have always been and will remain the biggest dollar drivers of the video market, regardless of delivery format, the digital domain opens up all kinds of opportunities for other programming, even user-generated.

Already studios are shifting large portions of advertising budgets to the Internet, targeting these kinds of users, said Scott Roesch, VP and GM of AtomFilms, a site that offers a plethora of short-form indie content for download.

All the moves in the VOD space of late, even if it creates more competitors — like iTunes tossing around the idea of a subscription model, and announcements that Universal and Sony are going to offer film downloads — are good for the space as a whole, Marvis said.

“The more companies that are in the space educating people, the more people will download,” he said. “It's hard to get people on to their first download.”

What panelists were particularly pleased about is that they've been saying for several years that “this is the year of digital downloads,” and it looks like in 2006, that statement is finally true.

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