I was listening to an NPR Day to Day piece on Rupert Murdoch’s plans to deliver video on demand via his 20 million PVRs. A lot of the interview revolved around the idea that Rupert was going to have problems delivering this video within the 45 day “Wal-Mart Window.” (Wal-Mart has an agreement with the major studios that says they will delay release of their movies through video-on-demand, over the Internet, etc. until 45 days after those movies have been released to video stores, such as Wal-Mart. Failure to comply with this agreement would result in the removal of that studio’s movies from Wal-Mart’s shelves.) I agree that this is an issue, but it seems to ignore the other larger issues that face News Corps as we move rapidly closer to a world driven by open network distribution.
The problem with satellite is that it cannot deliver a video on-demand to a consumer (for a variety of technical reasons.) It is inherently a broadcast medium with no real two-way communication. So, to achieve his goal of video-on-demand, Rupert is going to download and cache movies on these PVRs using a reserved segment of drive space, approximately 80 Gigs). The selection of available movies will be limited to those that will fit on that drive. Since Rupert’s aiming for the HDTV market, that means about a dozen titles unless he compresses the hell out of them (which he probably won’t do since many (most?) of the existing set-top boxes only accept MPEG-2 streams.)
As we head into this age of open networks it is amazing to me how badly News seems to be missing the boat here. Now, it’s not that I think blockbusters are going away, as I’ve said before, but I do believe that any video-on-demand service that only delivers the very tip of the long tail head is doomed to failure. It won’t take much for consumers to realize that the selection they receive from DirecTV is a tiny sliver of a fraction of what they can get through cable, which in turn is a tiny sliver of a fraction of what they can get through the various IP deliver platforms that will be springing up as DirecTV rolls out this service. DirecTV is assuming that the hits are all that matter. Well, they may bring in the most money, but it won’t stop consumers from abandoning the service for other more flexible platforms that do at least give you the option of seeing more than the top-ten movie releases.
I’m a DirecTV subscriber and I love the service. But for me, it’s mostly about the quality of the broadcast and the interface TiVo has provided. Cable is now rivaling this quality and IP-based delivery mechanisms will soon surpass it. TiVo’s interface will be there whatever my source of content. As more content becomes available, why exactly am I motivated to stay with DirecTV again? What’s the real killer value?
Satellite has been kicking cable’s ass over the last decade. But that process is going to start going the other way. Unless satellite makes the enormous investment into turning their birds into fat pipe IP delivery stations, their attractiveness as a delivery platform for content is going to start fading fast. We’ve seen the heyday of satellite and that heyday was yesterday.
Tags | npr , directv , dvr , opennetwork
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Posted by: ellaela-av | December 15, 2008 at 07:29 PM