Attention, movie fans out there.
i. There was a time when you watched whatever movie the TV networks decided to air for you. Prime time movies, post-prime movies, B-series, etc. No choice, and crap quality.
ii. Hence you went to the movie theatres, and that was expensive (parking the car, drinks & popcorns, etc.)
iii. Then came the video-clubs: they theoretically had a very large choice, great availability, a reasonable price, although late fees came in expensive. But after a while, you grew tired of renting out always the latest action blockbuster, paying late fees, waiting for your choice to become available. Blockbuster was born during this time.
iv. Then VHS were out, and DVDs were in. Better sound, crisper image, easier navigation, easier to store, better waow effect. You kept going to Blockbuster or your local video club, but the same problems remained.
v. Hence, you subscribed to cable TV or satellite TV. Now this was cool: 20 channels to choose from, no commercials, at least one would fit your taste; and all for a flat-fee price ! but as usual the more you get, the more you want. You wanted to start your movie whenever you wanted.
2 start-ups tried to solve the problem differently:
1) TiVo was launched as a personal video recorder device + a subscription service allowing you to record any live program, and pause, fast forward/rewind (amazing! I tried it a couple of years at Matt Greenhouse's place in NYC - he's the President of Colspace, an interesting start-up in the collaborative space. More about him soon). Problem here ? You could watch only what the TV networks were airing at a given time, but at a flat fee, immediately, whenever you wanted. So much better!
2) Netflix was launched by Reed Hastings: this mail-order company has the largest choice of DVDs on the planet (well, in the USA), and for a flat fee, will mail it to you. You can then watch the movies and return them by mail. The problem: you can't get immediately another film which was not in your immediate selection. Imagine some US President died and you wanted to watch one his most famous movies... you'll have to wait. (by the way, this is the way glowria.fr operates in France: best selection of catalogue, best prices, great service).
So, how do we solve this problem?
a) TiVo is announcing it is going VoD! (the NYTimes has the story).
b) and Netflix announced it would go VoD in 2005 (check the discussions in the latest earnings call).
Natural evolution for both models; they will find a number of players on their way such as movielink or moviesystem (recently purchased by Canal+). The battle will now move to new parameters: consumer equipment, pipe bandwidth, right-holders discussions for VoD. A number of start-ups in Europe are already trying to enter this space. Stay tuned.
