VOD Services: Preparing for a Post-DVD World
No one has yet discovered how to turn video-on-demand into a mass market, but that isn’t for a lack of trying.
A spate of recent announcements, rumors and transactions in the VOD market indicate that interest is growing among would-be service providers — particularly DVD rental services planning ahead for a post-DVD world.
Yesterday, Netflix launched a set-top box that will stream movies and TV episodes directly to TV sets. Subscribers initially will be able to choose from about 10,000 titles, and can access the service as part of their existing DVD rental subscriptions. Previously, Netflix only offered streaming videos to subscribers’ computers.
The announcement follows news earlier this month that bankrupt video rental chain Movie Gallery had sold its VOD service, MovieBeam, to an investor group. Likewise, the Hollywood Reporter in April reported that Blockbuster Video was close to releasing its own set-top box for streaming video rentals.
By joining a VOD-to-TV fray that already includes Apple TV and Vudu, DVD rental companies are making the sensible bet that most consumers want to watch movies on their TVs, not their PCs. Still, plenty of questions remain about the best business model, such as:
o Price of the set-top box ($100 for Netflix vs. $200+ for Vudu and Apple TV)
o Pay-per-rental (Apple TV, Vudu) vs. unlimited rentals with a monthly subscription (Netflix)
o HD (Apple, Vudu) vs. non-HD (Netflix)
o Selection (Netflix’s 10,000 titles on demand are only a fraction of the company’s total library)
What approach, if any, will wean consumers off their DVD players? Stay tuned…