Disney drives digital delivery
MICKEY MOUSE and his many minions could kill off the DVD as we know it if Disney's latest cunning plan comes to fruition. The happiest chief executive on Earth, Bob Iger, recently admitted that DVD sales - which have driven the whole movie industry for the last decade - are down the toilet.
Disney has cut jobs and scaled back its in-house production, turning its focus instead to distributing bankable productions from other studios like Steven Spielberg's Dreamworks cash factory. "It creates a business out of distributing movies made by other talented people, without committing our own capital," Mr Iger told the Financial Times recently.
In a move that Disney sees as "changing the status quo", but others might see as just another cynical attempt at cutting its production costs, the US based entertainment conglomerate will be piloting a new digital distribution model next month.
Codenamed Keychain, the new technology will allow Disney fans to pay a single licence fee for a product (for the sake of simplicity we'll stick to movies for the purposes of this article) and then transport copies of that product across a multitude of different mediums without having to pay additional charges.
There are no hard and fast technical details available about how the new system will work, but we can only assume that you will pay a one-time fee for your copy of Pinocchio using a web store, something like Itunes. Thereafter, wherever you are in the world, and whatever gadget or gizmo you use to view your movies, you will be able to download and watch it.
With just about every electronic device known to man catching up on video streaming technology, you'll soon be able to watch the trials and tribulations of the little wooden boy on your mobile phone, laptop, Playstation 3, PSP, Xbox or microwave oven. And all for one price. Forever.
Death to DVD
Some of the wrinklier denizens at the Inquirer remember watching the BBC's fantastically futuristic Tomorrow's World when we were kids a number of decades ago. It's safe to say that pretty much any regular viewer will have had one particularly memorable episode burned into their adolescent brains - the one where they introduced compact discs. The new music medium was the best thing ever. It was incredibly small, it was unfeasibly shiny, and it was totally indestructible! That's right kids. You can smear it with jam, stamp on it and drag it around tied to the back of your dad's Ford Cortina and - after a swift wipe with a damp cloth - it will work perfectly every time.
Unfortunately, the CD's imperviousness to damage - along with the promised arrival of the personal jetpack - never became a reality. Leave a four-year old in the same room as a CD or DVD for more than 30 seconds and the disc will become instantly unplayable. They don't even have to touch it. There is some kind of ethereal chemical reaction, which takes place only when adults are not watching, that instantly coats any optical media in chocolate, the kind of deep scratches that only Freddie Krueger should be able to create, and congealed snot.
We're not sure if the folks at Disney have really thought this one through, but we'd love to know how many DVD purchases are second or third-time purchases by frustrated parents. Especially when you take into account replacements for much-loved and badly-worn VHS copies.
There can be no doubt that digital delivery is the way forward for modern entertainment media. Smart companies are coming to the realisation that the millions they spend on unworkable and unpopular copy protection schemes can be better spent finding new ways to monetise their merchandise. Adding value to boxed products is one way of drawing in the dollars and fighting off the swashbuckling 'pirates'. Free action figures, PC games and the inevitable DVD extras have all bolstered sales to a limited degree. But these are premium products for people willing to pay, and to wait.
You want it when?
Today's consumer, however, wants it now. And he wants it cheap. And he doesn't want any stupid copy protection shenanigans messing with the innards of his precious PC without even asking. But most of all he wants it free. And if he can't have it free then he wants it as cheap as possible.
In the world of Hollywood blockbusters, marketing is everything, but the Internet has thrown such a spanner into the Madison Avenue works that the men in the red braces have been caught napping
Ever since the Blair Witch Project scratched its way into the global forebrain with its dirty fingernails, viral marketing has ruled the world. Fifteen years ago, if you wanted to see the trailer for the latest special effects cash cow, you had to sit with a couple of dozen compete strangers in a darkened room full of cigarette smoke, body odour and stale popcorn.
Today you just fire up Youtube on your Iphone and everyone in the pub can watch some poor unfortunate souls have unpleasant things done to them in Saw 56, or whatever number the world's favourite torture porn franchise has reached this week.
Show me the money
Internet marketing is relatively cheap, especially if you have a product that people actually want to buy. Packaging a DVD and getting it into the hands of your prospective punters is expensive. The recent writers' strike that brought Tinseltown's movie and TV industries to a virtual standstill a year ago was made all the more poignant by the fact that the guy who produced the cellophane wrapper on the DVD you bought from your local supermarket was actually paid more than the movie's screen-writer on a per-unit basis.
We'll say that again in case it failed to register. The guy who wrote the script for your movie got paid less than the cost of the impenetrable sleeve of cellophane in which it was wrapped. Is it any wonder that no one makes intelligent films any more?
So without the need for elaborate packaging, earth-damaging transportation, insidious and costly DRM schemes, and overpriced and ineffective marketing, the cost of getting a movie in front of the eyeballs of the average movie fan should fall through the floor.
If we say the average cost of a chart DVD is around £15 and take off a couple of quid for packaging and transportation, that leaves us with £13. A quick scoot around the Internet leads us to the conclusion that around 30 per cent of a movie's budget is spent on advertising and marketing so we'll round that down to £8.50.
We can almost hear the howls of derision at our utterly unscientific and mathematically pathetic ramblings and the conclusion to which they have brought us. But how do you think Hollywood works these numbers out? Why does a DVD of Spiderman 3 with a budget of $258 million cost more or less the same as a copy of Slumdog Millionaire, which cost a paltry $14 million to make?
The simple truth of the matter is that the studio money men will charge whatever they think they can get away with. And until people start to vote with their credit cards, prices will be kept unrealistically high.
Wishing on a star
If digital delivery of movies follows the model proposed by Disney, and in the future we can pay just one simple licensing fee to watch our favourite movies in whatever format we want, whenever we want, and as many times as we want, the implications for other industries are also worth considering.
Wouldn't it be fantastic if, when you paid for the latest instalment of the Harry Potter saga, you also got a licence that would enable you to read it on your laptop or Kindle or Sony Reader? You might even be able to download a podcast of the spoken word version to your MP3 player or music phone.
Wouldn't it be incredible if, when you shelled out for the latest version of Grand Theft Auto, you were able to play it on your PC, or your Xbox, or your PS3 all for one price?
And wouldn't it be great if you could install the productivity software or operating system you paid good money for on any machine you like and use it anywhere in the world without having to beg for the privilege? Maybe that's just pushing the point too far.
International copyright law is a mind-numbing minefield fought over by greedy industry lobbyists, self interested action groups and heavy-handed legal rottweilers, and subject to the kinds of vagaries and inconsistencies that would try the patience of a buddhist monk blissed out on Mogadon. The copyright cartels' lawyers are some of the highest-paid legal professionals on the planet, and you needn't think they are going to go down without a fight.
But if any single organisation is well equipped to blaze the way through this minefield, it is probably Disney. That's if Dreamworks doesn't get in there first.
As Tinkerbell says, if you don't believe it, it will never come true. So let's all try to believe and make a wish! µ
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Digital distribution is massivly unworkable for many people as you would never be able to get a Full Blu-ray quality movie with today pathetic internet conections and Download limits.
Just one movie and i would be left without the internet till the next month.
Physical media will always be superior as people will want a guarantee that what they have bought is physically there and theirs.
digitally distributed media is far too prone to technological changes in too short a time in comparisson to physical media that has a longer life, making what you bought unplayable or loosing it entirely as the company went bust or what someone stored it on fails and even accidental delletion.
We don't know a Pirates Bay of the Caribbean, but we've heard on it.
This is exactly what media digital distrubution needs as a model. The technical difficulties (ie: low bandwidth to the rest of the world) will be overcome with time. My main problem with this model is that prices for older content will not drop and higher quality versions wont become available.
The number of times i've watched Aladdin would make this well worth it :P
"Physical media will always be superior as people will want a guarantee that what they have bought is physically there and theirs.
digitally distributed media is far too prone to technological changes in too short a time in comparisson to physical media that has a longer life, making what you bought unplayable or loosing it entirely as the company went bust or what someone stored it on fails and even accidental delletion.
posted by : Mauller07"
Isn't one of the selling points of digital media that you will always, always be able to play it on the latest and newest devices, if not directly, then easily via painless transcode. Concerns about backup and data security are so very much 2005 discussions as well, how much free cloud space do you want, exactly?
I applaud Disney's direction here, provided they don't fall into a model which is DRMed to the point of idiocy and limits device portability. I will gladly pay a reasonable fee for high quality, quick availability downloadable content. How much lead-time from cinema can we expect? This will be critical, the issue with piracy is partially driven by the time frame with which material becomes available by other media.
Now, If I was someone like blockbuster, or had a Sky boxoffice like business model, I would be very concerned by this direction, but as a consumer, bring it on.
I think you haven't thought through this well enough. Much like today you go to which ever retailer you like and try and get the best price on the dvd you want, this could just as easily apply to downloads, with retailers setting up their own networks and you just go into the store with your device and purchase the digital file and download from either a local onsite server or from the retailers own network, for a modest markup of course, this is called in the world of marketing as value adding. Basically in the end what Disney is proposing is that you buy a license, you get some form of physical copy of said license and then you can "redeem" said license for a copy of the works on whatever medium you choose (with whatever value added medium you choose) This frees up the market to decide what formats are distributed. Generally speaking, if HD formats become common, the film makers will use the technology for filming because it's hard upscale older low res films/formats to new HD formats. It also might push for certain formats to become common, or force new formats to become common, anyone say "portable mpeg" or "portable video format", with devices that then show said shiny label so average joe can know that x download from x website will work with x devices. That's what is currently missing from the equation in my opinion, and when said format gets agreed to, every electronics maker will know what their device needs to be capable of for portable video to truly take off. As it is, avg joe doesn't want to know about divx (which has reasonable amount of shiny badges, but hasn't really hit the model I've suggested above), or Xvid or x.264 they just want to know that it'll work when they press play.
Actually I think it's you JD and Adam who haven't thought this through. Mauller07's points are spot-on. I own a sizable blu-ray collection and I can pretty much guarantee I will never be willing to spend that kind of money on digital distribution based content. The United States has one of the poorest broadband strategies in the world and I do not see that changing any time soon. Where I live the fastest broadband connection available is 1.5mbps. Do you honestly think I want to wait a week to watch the high definition movie I just purchased while it downloads? The kind of picture quality that makes me willing to empty my wallet is simply not feasible with digital distribution. You might think that in the future faster broadband speeds will make a 25 gig download easier to swallow but you must accept that by the time that happens, the movie industry will have moved on to much larger higher density physical mediums. Visualize a 500gb "super disc". Still willing to wait?
The other concerns listed are equally valid. If there is one thing movie companies have proven without any question is that they cannot be trusted to protect the interest of their customers. As it is, publicly traded companies in the US are already willing to do what they know will damage long term viability in pursuit of short-term quarterly profits. Can you seriously say you trust these companies to ensure that your purchases will still be there for you once it becomes a financial burden for them to maintain the servers? Didn't Wal-Mart have a DRM protected digital music distribution system until not long ago?
Disney's DVD sales blues are not a result of a problem with the distribution medium but a result of Disney, in at least my case, making poor decisions that ultimately punish the customer. For example: I was collecting some of their older cartoon series as they were released on DVD in volumes. But for some reason Disney up and decided not to complete any of their series. They just stopped putting them out mid-series and they wonder why we don't trust them anymore. Stopping mid-series severely damaged the value of the collection. Customers pay for value not for product. As long as the perceived value exceeds the price then the product will sell. If they can accomplish digital distribution without damaging the value then they will succeed. To do that they would need the ability to distribute a full 1920x1080 resolution movie with no noticeable compression artifacts and absolutely no DRM limitations in under say, , the hour or so it would take me to drive to a best-buy. Does that sound likely or even possible right now? I don't even see that happening 5 to 10 years from now and by then we will likely be looking at the next iteration of high definition.
Digital distribution is an option when the price is the bottom line, but it will never replace high end physical media.
Lets see, I never argued against dvd format.... actually I suggested an altogether alternative to the current "Print the disks, send to retailers" format. DRM is a pain in the butt, and no-one wants it. What I suggest is to open up the market a bit and create a bit more efficiency in the market is a slightly different way of distribution.
For example, instead of Best Buy, or Target, or whatever retailer, buying '000'000s of disks and then hoping that they can sell them, they negotiate for a license reseller contract. If they want, they can then put x amount of licenses on DVD/BD that they think they can sell, or if the price is right from the studio buy copies direct from them. They can then onsell licenses in a creative manner, online for those with a decent internet connection. Or develop their own network and kiosks or other method so the customer can put it direct to their ipod/PMP/Mobile phone/SD card or other portable device, with the only time to wait being the time it takes to transfer to the device. A license scheme is far more flexible than the current DVD/BD media and given more people are on the go, and want their entertainment "everywhere" flexibility.
In the end, a license should come with a DVD/BD and should your DVD/BD get damaged, you don't buy another license + Disk, just the cost of replacing the disk. Should you format your disk and lose your movies, all you need to do is download again, with little or no charge. I'm not saying that this method isn't without it's issues (what happens if you lost evidence of your license, ie the receipt) But it could make a big splash in the market and access to media easier by opening the doors to innovation (something that the MPAA etc are reticent to do)
We're all headed to a wonderful world of cloud computing where you will end up with all your apps / storage all online. All you will need to rely on (for the most part) will be your internet connection speed and your subscription(s) to the cloud. When you buy a new Disney "DVD" it will not require a download because it will all be hosted on the net. It will require a 'transfer' or something equivalent to your personal 'space' which you will be able to access via a login from your ps6, Personal Media Machine (Read PC at the mo), Webbook reader, webfilm watcher or whatever technology you fancy via uber fast wifi access to either your direct internet or your local fast speed intertnet hub.
But it is a little way off yet.
They need to make it hard for people to actually make their media work for their multiple devices and for the shared medium access to be preferable for average Joes like us to buy digitally something which we can currently hold in our hand.