Amazon has unveiled its long-rumored video download service. I share Randy Picker’s skepticism about the service’s potential for success:
You get content through the Amazon unbox video player, which is the control center for managing downloads and control over the content. Once the show or movie is downloaded, you can watch it on your computer or on an approved video device (but no iPods or Macintoshes and nary a word about Linux). And if you know how to do it, you can hook your computer up to your television and watch the TV show there. All of that is reasonably straightforward, until you start to break it down. Although this is video on demand, you need to plan your demand a day in advance. Amazon estimates that it will take more than seven hours to download a two hour movie over a 750 kbps line. The system does implement progressive download, meaning that you can start watching immediately as the content comes, but at these download rates, you’ll run out of content quite quickly.
Then the question is where to watch. Video downloads, unlike music downloads, face the last-foot problem: how do you move the content from where it has been downloaded–your computer–to where you would actually like to watch it–your big-screen television set? We don’t have this problem with music. You just listen off of your iPod or you use a special device to hook up your iPod with your stereo system. Amazon’s solution to the where-to-watch problem is a bunch of cables: hook your computer up to your television. If you have a desktop, you might need long cables, but if you have a laptop, this might be doable if cumbersome. An alternative is to burn the downloads to DVD and then just play the DVDs on the DVD player attached to your television. CinemaNow, an Amazon competitor, does exactly this for some of its movies. But not with Amazon Unbox, or, more precisely, you can burn to DVD–and indeed Amazon recommends that you do that to back up the video–but not in a format that will be readable by a DVD player.
Steve Jobs should be thanking his lucky stars that the studios have gone out of their way to make it hard for their customers to buy their products. Apple’s rumored enhancement of its Airport Express wireless hub to include a video-out port will give it a huge advantage by cleanly solving the last foot problem. Companies like Amazon, which lack the infrastructure and know-how to sell complex hardware-software solutions, are at an inherent disadvantage when the studios insist on using proprietary DRM technologies that break compatibility with standard hardware like DVD players that is already in everybody’s living room.
DRM makes it extremely difficult for a software-focused company like Amazon (or even Microsoft) to pull off the same trick. Ordinarily, software companies rely on open standards (like USB, CD-ROM, TCP/IP, etc) to ensure that their software will interoperate cleanly with a variety of hardware devices, regardless of who manufactured them. This promotes division of labor and competition because any software product can work with any hardware device. But you can’t do that with DRM, because the whole point is to restrict who’s allowed to make compatible devices.
Hence, the best way to get a clean, hassle-free user experience with DRM is vertical integration. If all the parts are made by the same company, then the engineers can all coordinate to ensure all the proprietary pieces work well together. But this brings us back to Tim Wu’s point: vertical integration means that all the decisions about a particular platform are made by a single company. And in the long run, such central planning is inefficient. Many opportunities will be missed because centralized bureaucracies have a tendency to become rigid and inflexible.
In a world with more open media technologies, it’s likely that the “last foot” problem would have been solved long ago. There are plenty of companies that could build a low-cost wireless video device that would allow you to stream videos from your computer to your TV. The only thing standing in the way is the studios, who think that minimizing piracy is more important than making it easier for their customers to use their products. Companies could build such a device, but without content to play on it, who would buy it?
The studios’ intransigence wouldn’t be a problem if it weren’t for the DMCA, which prevents consumers from taking matters into their own hands the way they did with music in the 1990s. The music industry’s hostility toward MP3 players wasn’t a big problem because the courts upheld consumers’ freedom to rip their legally purchased music to their computers and portable devices. Doing the same thing with video is illegal thanks tot he DMCA. As a result, we’re not seeing the sane explosion of innovation in digital video that we saw in digital music a decade ago. We’ll get digital video services eventually, but it will take a long time, and we’ll have to put up with lousy services like Amazon Unbox in the meantime.