I have posted a couple of times on glowria.fr, a company I helped launch with Mihai. It's basically a movie channel, which we feel competes with Canal+ and other satellite companies, but that operates like a video club.
Some of the key drivers for the growth of our company and consumer uptake are:
- penetration rate in French households of DVD players
- awareness of the service (online-DVD rental: still lots of work to be done here, but our word of mouth acquisition rate is growing really fast; we also benefit from the marketing efforts of our competitors in France and abroad),
- availability of titles in DVD format for the French rental market: the studios are doing a good job at making it available.
Some of the arguments against the business mode that we usually hear are:
- "well, there's a video-club next to my building": fine, we work hard everyday to bring a larger choice (about 10x more than a standard video store), better availability (we predict demand quite well now), convenience (what's better to get the DVDs at home, with no imposed return date), flat rate (EVERYTHING is included), great customer support (we track calls very meticously), etc.
- 'video on demand is going to replace you': surely... but we don't believe it's going to happen soon, as the telco pipes are not yet ready for a mass market adoption. Remember streaming the same content to a few million people, is different the streaming a few million different content at the same time.
- "why do we need you when P2P networks and DivX files are just so easy to use?" : well, firstly, it's now illegal to use P2P networks. A grandfather was recently busted for downloading 170 films for his grand-chilren. Secondly, downloading movies on emule or Kazaa is not obvious for the mass market (and is closely linked to the Internet broadband penetration, itself a percentage of Internet penetration...). Nevertheless user interfaces are becoming easier to use, PCs and laptops all have now CD burning hardware, and WindowsXP and MacOS ship with easy CD burning software. This will get easier and easier. Finally, watching a DivX file was, until recently, only possible on a computer, which made the experience lousy, except for über-geeks...
Coming back from the country side this afternoon (some pix blogged with my new moblogging software), I stopped by one of the large French retailers, Cora. I wanted to check out how low-cost DVD players were sold to the masses and whether playing back a DivX in my living room can be a great experience (I used to connect my laptop to my TV set...).
Well, I got myself a new DMC CDMC-4000 player, an almost no-name brand, and only paid 49€:
- TopAchat.com lists it at 70€
- MaterielMicro.com sells it at 94€.
- Selexium.fr has it at 115€.
People were actually buying these players at a very very fast rate at Cora and there were several stands. At this price, a real bargain. I won't describe it in detail here, but suffice to day, that the quality is not close to anything you would expect from a serious brand, and that some of the LEDs are already not working. But surprise: I burned a DivX that I downloaded from Kazaa, and played it back on it without a glitch.
By the way, an updated firmware is available on DMC's website; another site still lists this device as not having a crack to play DVDs from all zones.
Verdict: it is becoming easier to rent DVDs and to download DiVx (take your chances) and play them back; I expect however the category to evolve shortly towards TiVo-like-Wi-Fi-enabled devices onto which you download movies, without the extra step of burning CDs.
Update: just learned that Netflix and TiVo are entering an agreement tonight TO DO JUST THAT!
"Subscribers who belong to both services will be able to download their Netflix DVDs over the Internet directly into the TiVo boxes in their homes, instead of receiving them in the mail."
were the folks at Netflix & TiVo reading this blog or what ?
