Web On-Demand In a Holding Pattern3 Jun, 2005 By: Holly J. Wagner
You might expect executives at legal movie download services Movielink and CinemaNow to swim for shore with rumors of new Internet-based video-on-demand (VOD) providers like Netflix or Amazon.com swirling around them like sharks.In fact, just the opposite is true.
“I always assumed Netflix would get into it,” said Movielink SVP of marketing Alan Citron. “It sounds funny to say you are happy about competition, but it means people are starting to get it.”
The sentiment is similar at CinemaNow, the download service that counts Lions Gate Films and Blockbuster Inc. among its investors.
“We know there is going to be more competition. I would be a fool to discount it,” said CinemaNow president Bruce Eisen. “I'm not shaking in my boots.”
Movie downloading is still in its infancy in terms of consumer and studio adoption. At any given time, Movielink, which is backed by five of the seven major studios, offers about 800 titles. CinemaNow has about 3,000. Movielink won't give precise figures, but executives have said the service averages about 100,000 downloads a month. CinemaNow, which launched ahead of Movielink, only said it registers thousands of downloads a month and has thousands of subscribers.
The services offer many of the features available with DVD: fast forward, rewind and pause. CinemaNow even offers a few high-definition titles, mostly Imax films. CinemaNow's Eisen said he hopes to offer downloadable bonus materials by the end of the year.
TV Connection a ‘Biggie'
Still, Eisen and Citron agree growth at this stage seems to depend more on consumer awareness and better home networking than it does on content or broadband availability.“The biggie is being connected to the television,” Citron said. “The truth is that most people don't watch movies on PCs today.”
“The answer to that is a box, a consumer electronic device that costs $100 or $200 that you can easily connect to your television or your PC or home network, and you can sit on your couch and watch CinemaNow from there,” Eisen said.
Public awareness of, and comfort with, downloading also is an issue, even though Movielink has placed full-page ads in tech magazines like PC World and Wired. The company has scaled back advertising in college newspapers in favor of on-campus demonstrations, although, surprisingly, the services' demographic has already graduated.
Both executives said their best customers are male, 25 to 45 years old, college-educated, tech-savvy and well employed. Business travelers like the service because playing downloaded movies puts less drain on laptop batteries than DVDs. College students, often living on a shoestring and bucking societal rules, are harder to lure away from illegal downloads.
“Our demographic, at the younger end of it, is about 25,” Eisen said. “They are out of college. They are making more money, they have less time and the thrill of downloading … it's just less fun.”
CinemaNow offers download-to-own, which keeps the movie file from expiring after the download, but so far none of the major studios are cooperating. Most of the download-to-own titles are from Image Entertainment. And the option still does not allow the user to burn the movie to a DVD at home.
‘Play Anywhere, Copy Nowhere'
“The next evolution will be to download to your PC and then copy it to three or four other devices. Then, finally, it will be download-to-burn,” maybe even later this year, Eisen said. He's looking forward to a “play anywhere, copy nowhere” model that would let people download a movie and burn it to a DVD that will play on any player.
Even when legal movie downloading reaches its prime, the executives said, they don't think it will replace other forms of home entertainment.
“I don't think people are going to forego or drop cable and satellite to get CinemaNow,” Eisen said. “They offer a lot more than we do. Cable service gives me my cable modem, and I can watch VOD. They are in the living room, they have the remote. The good news that I have that they don't is about 3,000 titles.”
Still, the idea that content alone will drive adoption may be a myth, Citron said.
“It follows its own path, and you have to be ready to take advantage of it,” he said. “As bandwidth improves and more people have not only broadband, but faster broadband, it will happen. We will market to them, but they will pay more attention.”
In the end, he said, consumers will decide.