Now Showing on the Netflix Player: Hollywood's Busted Business Model
Once again, I'm cranky about the state of movie downloads. For the third time just this year, I've found a promising product--in this case, Roku's Netflix Player--undercut by a crummy selection of movies to watch off the Internet.
But why is that? To get a better picture of how fundamentally screwed up movie distribution is, take a moment to study this graphic (click on it for a full-resolution PDF copy):Vongo movie-download site. It shows all the different markets into which a movie is typically released (although individual titles can depart from the pattern, and it's also more than possible that I missed a wrinkle or two in my conversations with this guy). Let's break this down:
* The first chunk of the red bar at the top, the first three to five months, indicates when the flick is in theaters; note that in the last month or two of this period, airline passengers and hotel guests can view the movie too.
* Starting at the five-month mark--the second chunk of the red bar at the top--you can buy the movie on DVD and as a download from sites such as iTunes (as indicated by that assortment of logos of movie-download stores, some of which are now defunct). You can also rent a DVD of it from Netflix, of course.
* The third chunk of the red bar indicates when pay-per-view (PPV) and video-on-demand (VOD) services can offer the movie for rent. We're talking about iTunes Store and Xbox Live rentals, Comcast VOD and so on.
* At about 11 months into the movie's life, things get a little more complicated, as outlined in the lower half of the diagram. "Subscription video on demand" (SVOD) services--HBO, Cinemax, Showtime, Starz and online equivalents like Vongo (as highlighted by the large Vs in the diagram) and Netflix's "Watch Instantly" service--now get to take their turn. This often means that PPV and VOD services have to stop offering the movie, which is why a popular rental title can vanish from iTunes for no apparent reason.
* After one or two months, the pay-TV window shuts: Broadcast and non-premium cable and satellite channels get their turn, while pay-TV channels and sites must often give up the movie.
* But a few years later, a second pay-TV window opens up, during which ad-supported channels can't air the flick.
* Finally, as much as nine years after its theatrical debut, the movie enters the "library period," which might better be called the "rational market": There are no more mandatory exclusives, so anybody can cut a deal with the movie's owners.
All clear on that? Yeah, me neither. (Note: Industry insiders are welcome to suggest corrections in the comments or by e-mailing me.)
But wait, there's more! Clearing a movie for online distribution can also require the services of small army of lawyers, who have to ensure that nobody's rights are being infringed and that all parties with a stake in the flick get their proper compensation. (Note, however, that the music business seems to have gotten over this hump by now.)
What it added up to in Netflix's case is a movie selection that reminded me of the tiny, understocked movie-rental joints that Netflix's online DVD-rental service has helped to put out of business. I can understand why the "Watch Instantly" catalogue is so skewed towards older releases--but that doesn't mean I have to like it.
But looking at Netflix's online service also reminded me of the all of the other movie-download options I've tried since the 2002 arrival of Movielink. Take a look at my 2006 dismissal of that service and CinemaNow, then read over my 2008 evaluation of Apple's iTunes Store and Microsoft's Xbox Live, and see how little my basic complaint has changed.
The hardware and software have evolved--TV-connected devices like the Apple TV, the Xbox 360 and the Netflix Player provide a far more pleasant viewing experience than earlier, PC-bound options. (The more expensive Apple TV and the Xbox 360, unlike Roku's box, also do far more than just play movies.)
But you could have the most elegant, reliable set-top box connected to the world's fastest, cheapest broadband and the fundamental flaw of movie downloads would remain. As long as these release-window calendars look more like a Five-Year-Plan handed down by a Soviet ministry, there will be precious little room for online distributors to develop a viable business.
It's not that people won't be downloading movies off the Internet as a result--they'll just defect from this command economy to use file-sharing sites and services that don't pay the people who make the movies.
At some point, that pressure has to push Hollywood to change this system. But I'm tired of venturing guesses about when--I've been wrong too many times when I've assumed that movie studios' quick adoption of the DVD meant they would be just as aggressive to move to the Web. So why don't you all take a crack at that instead? In the comments, post when you think you'll be able to buy or rent any major movie online on the same day it becomes available on DVD or Blu-ray--or on the same day it debuts in theaters.
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