It's official, if not particularly surprising: Movie downloads have arrived. Consumers are clearly interested in video downloads, but Monday's news from the major movie studios looks like a pricey experiment.
The major movie studios -- General Electric's
However, consumers will pay through the nose for their digital flick fix. News reports say the download fees will be a steep $20 to $30 for new releases, although older flicks will be considerably cheaper. Although buyers will be able to burn backup DVDs of the movies and watch them on up to three computers, those DVD copies won't yet play on regular DVD players. (That feature is still being developed, although it apparently won't be available for several months). Downloads will take about an hour on high-speed Internet connections, although viewers can start watching before they are complete.
Given the fees and the limitations involved, it seems to me that this development mostly pays lip service to the nascent digital downloading industry. In reality, the movie studios seem to be discouraging viewers from taking the download option. (It's also worthwhile to note that the studios don't want to cause a rift with the bricks-and-mortar retailers who peddle DVDs -- Wal-Mart, for example.) Although movie studios want to discourage digital piracy, I think such high price points are likely to backfire. (When the music industry was besieged by digital piracy, Apple's
Recent rumors that Amazon.com
Movie downloads may be here, but given their limitations and high price, I doubt they'll be a force to reckon with just yet. I wonder if the movie industry will make some of the same mistakes as the music business has; its desire to charge premiums will only serve as a steep psychological barrier to sales, and it might drive tech-savvy consumers to piracy. Nice shot, Hollywood, but this volley seems to have missed the mark.
For more recent related stories, see the following Foolish articles:
- Amazon keeps 'em guessing about digital video.
- DirecTV plans a video vault.
- Will people make it a Google night?
Alyce Lomax does not own shares of any of the companies mentioned.