The Customer is Always Wrong

by on April 3, 2006 · 16 comments

The New York Times has the latest evidence that Hollywood is clueless when it comes to selling its products on the Internet. Hollywood has finally gotten around to offering users the opportunity to purchase and download movies online:

New movies will cost about $20 to $30 to download; older titles will cost as little as $10. The downloads will be available on the same day that the DVD is released–quicker than rentals, which are put online about 45 days later and cost $2 to $5.

Last time I looked, you can get DVDs of new videos for less than $20 from Amazon.com. So an Internet download will be more expensive than buying the movie on DVD. But at least there will be some new functionality, right?

CinemaNow will allow the movies to be played only on a single computer. Movielink will allow the movie to be copied onto a DVD, from which the movie can be downloaded to two other computers, but it cannot be played on a conventional DVD player.

Nor can the movies be copied to Apple’s video iPod or the much less popular handheld video players that use software from Microsoft. The studios expect to permit downloads to portable devices later this year.

For now, it is difficult but not impossible to watch the downloaded movies on a television. Some computers, like those using Microsoft’s Windows Media Center, are designed to be connected to a television in the living room…

The downloads do not include the bonus features, like deleted scenes and filmmaker interviews, that often accompany DVD’s.

Oh, and the movies will be about a gigabyte. That’s substantially smaller than the capacity of a DVD, which means (unless they have a radically improved codec) that these videos will actually play at a lower quality than DVDs would.

The story concludes with a lengthy discussion of how they don’t want to lower their price for fear of offending retailers. But it fails to mention a much more straightforward way of appealing to customers: ditch the DRM. These files are already lower-quality than DVDs, so anyone willing to break the law is likely to pirate the high-quality DVD version, not the low-quality downloaded version. And consumers are a lot more likely to purchase the movies if they can play them on the televisions and iPods they already have, rather than being restricted to only watch them on their computer screens.

DRM supporters claim that the nerds are just working the kinks out of DRM schemes, and that we’ll soon have flexible, convenient, interoperable copy protection that will prevent piracy without getting in the way of legitimate users. It sure doesn’t look that way to me. Every new DRM scheme that’s released seems to be more restrictive and less consumer-friendly than the one before it.

Note to Hollywood: the people plunking down their hard-earned money for your products are the good guys. If they wanted to engage in piracy, they wouldn’t have paid for your product in the first place. You’re not doing yourself any favors by treating them like criminals.

  • eric

    iTunes suffers from many of the same drawbacks — files are lower quality than CDs, DRM restricts fair use and interoperability — yet they are considered a success. At least there is the advantage of flexibility and choice, buying only a single track instead of the whole album. (Oh my. That sounds like the dreaded a la carte!)

    The studios may be right. There is a sucker born every minute. If people will buy iTunes, they may buy downloaded movies too. People who think less is more.

  • http://abstractfactory.blogspot.com/ Cog

    Tim: Your post is spot-on in general, but one minor technical FYI: the codec used on DVDs is MPEG-2, which is technology that was stable (i.e., not even cutting-edge) in 1994. Furthermore, many (most?) DVDs do not use the full 4GB capacity of the disc for the main feature. Therefore, it’s actually plausible that, with modern video codecs, you could pack a DVD-quality feature film into 1GB or less. MPEG-4 Part 10 (a.k.a. H.264), for example, is about twice as space-efficient as MPEG-2 at DVD quality.

  • eric

    iTunes suffers from many of the same drawbacks — files are lower quality than CDs, DRM restricts fair use and interoperability — yet they are considered a success. At least there is the advantage of flexibility and choice, buying only a single track instead of the whole album. (Oh my. That sounds like the dreaded a la carte!)

    The studios may be right. There is a sucker born every minute. If people will buy iTunes, they may buy downloaded movies too. People who think less is more.

  • http://www.techliberation.com/ Tim

    Cog: Interesting. Thanks for pointing that out!

  • http://abstractfactory.blogspot.com/ Cog

    Tim: Your post is spot-on in general, but one minor technical FYI: the codec used on DVDs is MPEG-2, which is technology that was stable (i.e., not even cutting-edge) in 1994. Furthermore, many (most?) DVDs do not use the full 4GB capacity of the disc for the main feature. Therefore, it’s actually plausible that, with modern video codecs, you could pack a DVD-quality feature film into 1GB or less. MPEG-4 Part 10 (a.k.a. H.264), for example, is about twice as space-efficient as MPEG-2 at DVD quality.

  • V

    The pricing throws me. A DVD is a tangible thing that costs more to make and distribute, and comes in a box. What makes Hollywood think they can charge more?

    Digital music is cheaper than CD’s, ebooks are cheaper than paperbacks. This pricing scheme runs backwards to common sense.

  • http://www.techliberation.com/ Tim

    Cog: Interesting. Thanks for pointing that out!

  • V

    The pricing throws me. A DVD is a tangible thing that costs more to make and distribute, and comes in a box. What makes Hollywood think they can charge more?

    Digital music is cheaper than CD’s, ebooks are cheaper than paperbacks. This pricing scheme runs backwards to common sense.

  • eric

    What Cog says is true — mostly. Currently, most DVDs do use more than 4GB for the movie. When DVDs first came on the market, almost all were single layer DVDs, limited to a bit more than 4GB — and the compression artifacts in long movies were easy to see. Curently the standard for new releases and remasters is double-layer DVD, with almost twice the data. An average 2 hr movie might use 5-6GB, with the rest of the disc being available for special features. I recently watched Spielberg’s War of the Worlds (extra features were on a separate DVD), and that movie was probably about 7GB. (Spielberg likes a bit of film grain, which takes more data to encode.)

    MPEG4 compression can be more efficient, and look quite nice, but it takes more postprocessing (i.e. more computer processing power) to remove obvious encoding artifacts in something as compressed as a theatrical feature squeezed down to 1GB at DVD resolution (720×480 pixels). There would still be a loss of quality evident to a videophile, but probably not to John Q. Public.

  • eric

    What Cog says is true — mostly. Currently, most DVDs do use more than 4GB for the movie. When DVDs first came on the market, almost all were single layer DVDs, limited to a bit more than 4GB — and the compression artifacts in long movies were easy to see. Curently the standard for new releases and remasters is double-layer DVD, with almost twice the data. An average 2 hr movie might use 5-6GB, with the rest of the disc being available for special features. I recently watched Spielberg’s War of the Worlds (extra features were on a separate DVD), and that movie was probably about 7GB. (Spielberg likes a bit of film grain, which takes more data to encode.)

    MPEG4 compression can be more efficient, and look quite nice, but it takes more postprocessing (i.e. more computer processing power) to remove obvious encoding artifacts in something as compressed as a theatrical feature squeezed down to 1GB at DVD resolution (720×480 pixels). There would still be a loss of quality evident to a videophile, but probably not to John Q. Public.

  • MBA boy

    It seems to me that with current trends, the situation is anything but stable. Bandwidth is increasing in throughput and decreasing in price, storage prices are plummeting, devices are getting more transportable and better able to communicate directly with each other. Without mass surveillance and/or the elimination of local storage, and the implicit, potentially catastrophic threat to liberty that would bring, it seems to me that the ONLY solution – and I’m not looking forward to it at all – but the only solution for this is the embedding of advertising directly within the storyline/imagery such that the former is inseparable from the latter. Ultimately as real-time image processors improve, even that won’t work.

  • MBA boy

    It seems to me that with current trends, the situation is anything but stable. Bandwidth is increasing in throughput and decreasing in price, storage prices are plummeting, devices are getting more transportable and better able to communicate directly with each other. Without mass surveillance and/or the elimination of local storage, and the implicit, potentially catastrophic threat to liberty that would bring, it seems to me that the ONLY solution – and I’m not looking forward to it at all – but the only solution for this is the embedding of advertising directly within the storyline/imagery such that the former is inseparable from the latter. Ultimately as real-time image processors improve, even that won’t work.

  • marty

    As someone on a bulletin board pointed out, this scheme seems designed to fail. And fail so well that the MPAA can point to it as why downloading movies “wasn’t a viable business”.

    Pay extra for something of lower quality that is restricted to where I can watch it?? Or buy the DVD instead?

    And of course, the claim that movie piracy is costing the industry money would actually have evidence for a change (Bad movies costing them money couldn’t possibly be the reason…)

  • marty

    As someone on a bulletin board pointed out, this scheme seems designed to fail. And fail so well that the MPAA can point to it as why downloading movies “wasn’t a viable business”.

    Pay extra for something of lower quality that is restricted to where I can watch it?? Or buy the DVD instead?

    And of course, the claim that movie piracy is costing the industry money would actually have evidence for a change (Bad movies costing them money couldn’t possibly be the reason…)

  • http://daniel.benoy.name Daniel Benoy

    I wonder why the movie industry would be so dead-set on physical media to orchestrate an intentional blunder like this? o.o

    Isn’t it possible they’re just a bunch of retards?

  • http://daniel.benoy.name Daniel Benoy

    I wonder why the movie industry would be so dead-set on physical media to orchestrate an intentional blunder like this? o.o

    Isn’t it possible they’re just a bunch of retards?

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