There’s been so much happening in the worlds of packaged media and media distribution over the past week that I’m just going to provide quick recaps and analysis today, a la ESPN’s “The Thirty” program. See if you can spot the trends!
Remember InMotion? Their original business model, circa 2000, was to rent DVDs and portable DVD players to air travelers. The discs and player were picked up in one city and dropped off in another, or returned to the city of origin. But cheap laptops with built-in DVD drives and portable media players like the iPod put a big dent in that revenue stream.
Now, customers use InMotion kiosks to download feature films, TV programs, and music for playback on Windows-based laptops, netbooks, and tablet devices. Download times are fast — NCR and Mod Systems claim two minutes for a typical movie — and prices are competitive with online and in-store rental and purchase charges. Rental customers have 30 days to start a movie, and 48 hours to watch it once they begin.
According to the story, Hulu has generated over $100M in advertising revenue during its two-year existence, but that number pales in comparison to conventional TV advertising income. One reason for that is the smaller commercial load carried by Hulu programs, which is expected to eventually rise to the same level of TV programs. (Comcast, which is trying to acquire NBC Universal, has been a vocal proponent of moving Hulu to an all-subscription model.)
Earlier this month, Seagate announced it would ship their FreeAgent Go 500GB portable backup drives with 21 pre-loaded movies from Paramount, including Star Trek (a free viewing after online registration). The remaining 20 movies can be unlocked at prices ranging from $9.99 to $14.99.
The idea is to kick-start a customer’s home media library by simplifying the purchase of additional titles, although you may not care for Seagate’s pre-loaded selection, which includes such ‘can’t miss’ gems like Jackass 2.5, The Love Guru, and Nacho Libre.
The Hollywood Reporter stated last Friday that retailers had already sold out 60 percent of their Blu-ray inventory in one day. The disc is widely available at stores ranging from Best Buy and Wal-Mart to Target, grocery stores, and even drugstore chains, and it has been sold at a discount ($19.99) over the usual BD pricing.
These unprecedented numbers beg a few questions: First, if 2.7 million Blu-ray 2D versions of Avatar have already been sold, how will the ’special edition’ Blu-ray release do later this year? And what about the 3D version that is expected to hit stores early in 2011? Why not just wait until Christmas and release the 3D version, skipping the ‘enhanced’ 2D roll-out? Three BD editions of this movie in less than a year seem excessive, and I don’t expect the demand for these secondary releases to be anywhere near as strong.
As for the rest of the market, how will Netflix 2D streaming revenue for Avatar compare to traditional DVD rental income? (Netflix customers will gain access to the Na’vi pic in late May.) And how long before digital downloads are made available to services such as InMotion? Consumers are clearly moving towards streaming and digital downloads and away from optical media, based on industry trends for the past five years. What impact will this trend have on the enhanced 2D and 3D releases?
That’s it for now. Back to your regularly-scheduled work day…
Peter Putnam is president of Roam Consulting. Reach him at pete@hdtvexpert.com