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Uh-oh. You know how online movies are always being held up as the pot of gold waiting at the end of the rainbow? How downloading movies, or streaming them over the internet, will more than make up for dwindling DVD revenue? Well, London-based consultancy Screen Digest has downgraded its digital film sales forecasts by one third.
The consultancy, whose forecasts all the Hollywood studios subscribe to, has slashed its digital film revenue estimate from $1.5 billion in 2014 to $943 million.
It seems we’re just not as keen to watch movies on PCs and on our Xboxes as Hollywood wants us to be.
Alarm bells rang when last year’s digital film sale revenue was off by 19%. Screen Digest had predicted $360 million in sales. The reality was $291 million. This is the first time that Screen Digest has restated its forecasts for the sector since 2006.
Senior analyst Arash Amel tells me that 2009’s results hide a more troubling figure. The drop off in interest in downloading movies to own is even steeper. The consultancy expected DTO to generate $250 million last year. Now it believes the industry struggled to pass $199 million. Amel says, “Download-to-own has always been seen as the pot of gold at the end of the rainbow, just out of reach. Well, that pot of gold is fading.”
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Well, let’s hope this means an up tick in DVD/Blu Ray sales. Now with plasma/LCD televisions at an all time low, coupled with Blu Ray players/discs going down. We could see a bigger and better boost on that end.
the ironyyyyyyyyyyyyyyyyyy.
Hmm… perhaps because pay-to-download films are spectacularly overpriced and offer no benefit over Netflix, physical DVDs, or piracy?
Include bonus features. Make it easy for users to get from their PC to their TV. Then we’ll see if this is about people’s unwillingness to download films, or the industry’s unwillingness to make it a pleasant experience.
Well Said!! When it is VOD and is immediately viewable on your large home screen, we will see what the reality is.
Who wants to watch movies or tv on a computer? Maybe some scenes while playing around on the internet.
Thank you.
Is it that people are really not keen on downloading movies or is it that they are downloading illegally because they don’t want to pay? On a few forums I visit the number of people who say they download movies from various illegal sites is growing and the reason being is that they aren’t bothered about actually owning the movie long term on their PC, or whether the quality is a little below par they just want to watch the latest movies for free. To add to this most of them say that if they enjoy a movie enough they will buy it on DVD rather than continue to watch the downloaded version and so wouldn’t want to pay for a download version anyway.
Well, not a surprise.
As Amazon discovered, the Internet is a “niche marketing” vehicle, not a “mass marketing” technology. So with motion pictures, it will be the same. The problem is one of both marketing/public awareness and cost/scale.
For example, saw one is a fan of European and South American movies. How to keep up, know what is being released and what is worthwhile? Now of course if one is a rabid fan, then well…the rabid-ness takes care of that. But if one simply interested in foreign films, one needs an easy way of knowing what’s out there.
So (cost-effective) marketing will be key. Perhaps there will be websites that tailor to different niche audiences so that fans can easily find their personal-taste films.
The Internet will also allow increased opportunity for downloadable product. But download costs must be low – think “impulse buy” like candy at the supermarket check-out stand – and the production costs have to be scaled as such.
A question that enters into this is: would a old-style “studio system” serve producing lots of QUALITY inexpensive product (films – don’t flame me!)? Like the old days, directors and actors will work on 6 – 8 – 10 or more films a year.
There will still be tentpole movies, of course.
People will stream for sure and the video quality needs to keep improving, along with that of the offerings (Netflix’s streaming via things like XBOX Live is pretty slick but the offerings are, in totality, pretty insulting, enough to discourage adoption or retention).
Obstacles to DL to own:
Your DL’d file you’ve bought is still not universally compatible media relative to something like DVD or BluRay – even among computers.
Your DL’d file still faces a perceived more-endangered lifespan than physical media to a potential owner/buyer. People know how to care for their physical media. Digital files can be corrupted or damaged or rendered unusable in any number of ways through no fault of the user. Robust fulfillment for buyers (file replacement rights without limitations, no restrictions on plays, etc.) needs to be explicit in the purchase agreement and not taken away when it suits a company down the road.
Price confusion. There are so many floating price points out there right now between full price BluRays, discounted BluRays, standard DVD’s in the clearance bins and any number of tiers for digital versions (free/included with DVD purchase, full price download, pay for limited play windows), etc. that it’s no wonder the rental models have grown in attractiveness. BluRays need to come down in price if the business hopes to sell titles other than Avatar or the like. $30 for Hot Tub Time Machine, Valentine’s Day or The Blind Side on home DVD? Are you crazy? The high price points on BluRay in particular are even making people with HUNDREDS of DVD titles already in their home libraries VERY selective in their disc purchases and many are probably content to rent until they come down or the studios and providers get on the same page.
Improve streaming options and offerings and tack on “buy” systems to capture renters that are inclined to a purchase after a rental view. Make HD streaming and file quality the defacto standard with mobile options/resolutions supported in the same purchase. Get Blu pricing down to $20-$25. Provide better quality titles to streaming services and work with them to capture incremental sales from people actively watching your titles.
Also please hire me I need a job.
The DTO thing doesn’t surprise me. I own literally close to 1,000 VHS tapes and over 2,000 DVDs, but i’d never for a moment consider DTO. I want a box to look at, read the blurb, check the run time, weigh up between one film and another. I might (although i haven’t thus far) consider downloading a movie as a rental just to see but if i like a movie enough to own it i want to see that i own it.
This is not like music you put on an ipod and wander around with. I’m watching movies in my home so my collection if right there with me.
sounds like the industry needs to make better movies.
I think the industry is missing that consumers still have a MUCH higher demand for tangible items. As much as I love my ipod, I still regret not owning the actual CDs I bought on itunes
Maybe it’s not the technology, it’s the movies. Who wants to own — as in “live in the same house with” — most of the crap that’s out there?
VSDA and other surveys have revealed that as many as 40 percent of the people who buy DVDs never even unwrap them. The theory is that they want to preserve the experience they had watching the movie in a theatre but don’t want to risk it by actually watching it again, this time at home. So they just keep it around as a talisman.
it’s not rocket science. most people (myself included) don’t want to buy a movie on our Xbox if we can’t transfer it over and watch it on our computer or our iphone or ipad or our cell phone, etc. until the studios come up with a format that’s at least as versatile and portable as DVD, sales will never reach DVD levels. it’s funny to me that the studios all hate on Steve Jobs for bilking them out of so much money via his iTunes, but at the end of the day he seems to be the only guy who is even attempting to solve these problems and transition us into the digital age. i guess we’ll just have to wait for him to come up with a solution for this particular problem as well (and unfortunately the solution is NOT Apple TV)
Online movies will work when films are released simultaneously day and date.
This is truly the future, but the distributors do not want the exhibitors to fear this is coming.
Let’s make a wild guess…it is coming soon to a living room near you, but will probably be highly tested before the process is fully implemented.
I think the elephant in the room everybody’s trying to ignore here is that online movies get easily pirated.
everyone jumped on the download bandwagon too quickly. they assumed that the massive number of illegal downloads implied that the culture was ready to squint at a fucking macbook to watch their favorite movies. never mind that those downloads were disproportionately perpetrated by middle-aged video store employees living in their mothers’ basements, bored college students who wouldn’t have paid for most of the shit they downloaded anyway and eastern europeans with otherwise limited access to cool shit.
wait until someone (probably apple) develops a user-friendly platform that makes people comfortable enough to give up their physical media, because at present, when pressed with spending thirty dollars on a blu-ray dvd or streaming something to my computer from netflix at 11:30 pm, i’m going to ignore both and opt for porn.
Just watched a coupla great quality, recently released movies on a comfy couch in the living room in HD on a 52″ LED/LCD TV via a MacBook via Vuze (…er, at a friends. Really.) Cinema downloads are alive and well, trust me. Just no one’s paying.
First Hollywood needs to make more movies that people want to see before they will download them. If the price per movies is reasonable 2 or 3 hits a year are not going to cut.
Also why would I want to watch something on my PC when I have a 40 inch LCD sitting in my living room.
To bad, and SAG, WGA had such high hopes that there would be gold at the end of their rainbow with this. Now if you could get HD quality on a 50 inch TV with no pixelation over the internet they might have something. But it just isn’t there yet.
They need to drop the price. Downloading a copy should cost no more than half of what I would buy a DVD for. I have stopped buying DVDs for the most part (what good is a cabinet of 500 movies I only watch 3 times anyway – and the technology just gets old and the disks worthless like the rubbermaid of video tapes in the garage) and I usually rent online now.
just like the dvd buying market, people these days prefer to rent. but if download to own is priced smartly enough, renters may become buyers for the right movie.
No kidding. Why would I want to watch a movie on my PC when I just bought the big HD tv?
Ed, did you ever think of hooking up the right cable from your laptop to your brand new HD set? You can even hook up the sound cables, too.
I guarantee they will hook up nicely, and you’ll often get just as good quality of experience as you would off of BluRay.
No shit.
I’ve been screaming about this for years. Watching a movie on a small computer screen just doesn’t have the punch of a large monitor in your living room.
Maybe the idea of having the capability to download movies is appealing to the average consumer, but actually doing it is not. Maybe actually downloading the movie only appeals to tech geeks, who are the ones really pushing for this kind of technology, but actually watching a movie on a smaller computer screen or phone is very unappealing to the average person, used to seeing them on a big movie screen. Maybe most people only really want their xbox or playstation for playing games, not movies. I’m definitely not a tech geek, and I definitely wouldn’t want to watch a movie on a small device, but it’s kind of cool (I guess) to know I could if I wanted to show off or something. But unless I had no choice I’d watch a movie on a bigger screen.
The pot of gold is not a pot of gold until my TV set is also a computer. Well, actually, it’s not a pot of gold until my sister’s TV is a computer, given her resistance to tech toys. But at any rate, when the television set doubles as an internet device that will be the true test of whether or not downloading is a commercially viable delivery system.
And of course shrinking release windows will impact that, too.
Finally, some numbers to explain what’s been nagging at the back of my mind for over a year now: I can’t stand watching movies on a tiny box with inferior picture quality. Using a mouse, the same peripheral device I use to position my cursor while ranting on blog sites, just doesn’t feel the same as rewinding or pausing with a remote control. And the ads. god how I hate the ads! I just can’t get into a story when it’s surrounded with banners; I don’t even enjoy TV online, I have to DVR The Daily Show because those Dove Body Wash ads on the webcast are so offensive and unappealing. Online entertainment just isn’t entertaining no matter the format.