星期一, 二月 19, 2007

Video and Movie Downloads

After iTune expanded into video downloads, including popular TV shows like "Lost," google also start offerring paid contents, like full length movie. However, there are good reasons they are not going to fly in the next 2 to 5 years.

Each episode of "South Park" costs $1.99. I think this price is based on the DVD they sell. However, this does not make sense, because the DVD has higher resolution and you get the dics. Sure everyone can burn downloads on DVD and DVD+/-R are very cheap now. However, it is not the price of the dics that cost us more for downloads, it is the effort. Customer softwares does not allow you automatically put downloads on DVDs in an orgnized fashion. Can a software automatically burn all my "South Park" downloads on DVDs, but not touch my other less interesting downloads? Can the software automatically organize the downloads by season?

I think the executive must have thought about this hard. Sure, they can set the price lower and attract more downloads and may even make more money. But they probably worry about the longer term effect of a lower price, which is when the problem of downloads are all solved, they could not increase the price. What they fail to see is that for a new technology to take hold, it has to be cheap, or if we interprete it in a different way, make more efficiently. DVD plays now cost less then VCRs, that's why it took off. It also provide better quality, so it is more efficient to get the same result. Video and movie downloads can be like DVD to video, but the difference is that for the people paying premium today, they are not getting a better quality video than DVDs. The hard to solve problem is due to video downloads depends more on infrustuactures than DVD and VCR. When DVD first came out, the only we have to do to take full advantage is to buy a DVD player. If you have a good stereo, it would be better, but that's not essential to experience the higher quality. To get better than DVD video downloads, people needs faster internet connection. Today DSL or cable cannot satisfy this need. And internet infrustucture take a long time to move forward. It has been years since Verizon announced their fibre optical offering and I still cannot get it in my home.

Here is my prediction on video downloads. The marketing guys needs to have a longer term plan. This means they have to cut the price now and leave enough reason behind in people's mind, that when the HD quality downloads are available, people has to pay higher price. In fact, with downloads, it is quite easy to offer different prices for downloads. My opinion is the starting price for video downloads should be about $0.50 per episode of TV show, and $2 per movie to view and $5 to own and $20 to allow people to use short footage to make home video for YouTube. What this leaves out is any HD or even DVD quality stuff. They can offer HD or DVD quality downloads for 3 or 2 times the price, depends on how soon HD will replace DVD.