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iPod's victims: first CDs, now DVDs?

Forbes' Brian Caulfield suggests that Blockbuster and Netflix should be very concerned about Apple's rumored move into digital movie rentals. He suggests that history has proven the iPod to be a very disruptive device. Just look at CD sales, says Mr. Cauflied, their decline over the last several years certainly proves that people want their media in a digital form and they are willing to turn to Apple for it.

While I agree that Blockbuster and Netflix should be worried, I don't think Apple will be driving physical DVD rental stores out of business anytime soon. The one advantage that Blockbuster has is bandwidth. Movies, if you want them to look good on large screens, take up a lot of space. That means whether you're streaming them or downloading them you need a pretty fat pipe to have an enjoyable experiences. Compare this with the rather small files that most songs, in MP3 format, create and you can see how the music business was greatly impacted by digital distribution whether it be legally via iTunes, or when the floodgates really opened during the freewheeling days of Napster (I was an undergrad during that time, and I can tell you that I saw many a computer running Napster. I, of course, never downloaded anything because I didn't actually own a computer in college). Theoretically it could take less time to drive to a Blockbuster and rent a DVD than it would to download the movie. This will become less of a problem, and digital rentals more popular, when broadband speeds make downloading multi-gigabyte files take a matter of moments (in some areas this is already true).

Clearly digital movie distribution, both rental and for purchasing, is the future, but sadly I think this future is still a few years off from supplanting those shiny disks we all know and love.

Forbes' Brian Caulfield suggests that Blockbuster and Netflix should be very concerned about Apple's rumored move into digital movie...
 

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Gunnar

The iPod didn't kill the CD. The lack of copy protection on the CD itself is what made it all happen so fast. The iPod just came alone at the right time to make the idea of digital music appealing to the mass market.

Ripping CD's into iTunes (or the gazillion other jukebox programs out there) is so easy and quick nobody thinks twice about it. The same can not be said of DVD's. If (and that's a BIG "IF") iTunes is going to dominate video it will not unfold the same way its domination of music unfolded. The transition for music happened so quickly because people could fill their iPods with music they already had on CD. Nobody is going to devote the ridiculous amount of time it takes to convert their DVD collections using a program like handbrake. CD's = 2-3 minutes. DVD's = 1.5-2 hours. No thanks.

And the "near DVD quality" stuff they are currently selling on iTunes looks OK on an iPod or laptop but not so hot on my new 46 inch 1080p flat panel TV even using an Apple TV with an HDMI cable. Yet a cheap 75 dollar up-converting DVD player from Target makes regular DVD's look amazing on the same TV. I think the DVD still has some life in it yet. And until iTunes offers HD rentals I'm not interested, even if it is only 3 bucks. If xbox marketplace can do it so can they.

December 29 2007 at 9:07 PM Report abuse rate up rate down Reply
Adam

Any bets on how long before this comes to the UK, Canada, France or anywhere else outside the US? I'm guessing two years.

December 29 2007 at 6:15 AM Report abuse rate up rate down Reply
adam

First it was VHS vs Beta. Then it was VHS vs DVD. Now it's DVD vs Blu-Ray vs HD DVD (or whatever they call it...)vs BitTorrent download. The broadband digital revolution is upon us - it is inevitable.

I have a limited DVD collection only because I think the future is in digital downloads - why buy already obsolete hard copy media? Broadband speeds are increasing at an exponential rate, rendering the hard-copy format wars trivial.

They may not be available now, but sooner or later, legal high definition downloads will be widely available and cheaper than their hard copy brethren - and FAR more convenient in every way (heck, they'll be "greener" if you want to see it that way).

The real question is, how many people (in millions) are waiting for the [high definition digital download] broadband revolution?

December 29 2007 at 5:41 AM Report abuse rate up rate down Reply
basscadet

People people people. Why pay iTunes (or any other online mp3 seller) when there is a variety of P2P networks (Soulseek, DC++, Shareaza, iMesh), torrent sites, and even blogs that post links to whole LPs uploaded on the various rapidshare like file hosting sites? Many of the above have 256 and 320 kbps cbr mp3s that are more than decent for the average listener. Besides, if you ask around, most young listeners don't own a hi fi but play all those GB of mp3s through their 5+1 or 7+1 computer speaker rig. Or just on their mp3 playing cellphone (just bought a 4GB mem stick for my Ericsson walkman phone and there's a -still expensive- 8GB out there too).

The world was already turning to mp3s without the iPod's help. It seems to me that the opposite is happening: as the world was starting to collect tons of free mp3s (Napster anyone?) iPod came along and being the only good looking audio player on the shelves at that time it sold like mad.

December 29 2007 at 4:09 AM Report abuse rate up rate down Reply
Matthew

Online distribution will never catch up. Noone will watch a DVD resolution movie on their TV in a few years. With 1080p all the rage, a 1080p download will be at least 10gb (going on the size of a 1080p x264 encode).

December 29 2007 at 3:12 AM Report abuse rate up rate down Reply
james

Brian, You are an idiot! Here are the real reasons to low CD sales:

1 good one in an entire CD is not going to cut it and...

Limewire

Shareaza

Kazaa

iMesh

BearShare

Should I continue?

December 29 2007 at 3:11 AM Report abuse rate up rate down Reply
2 replies to james's comment
Blake

Not to mention, Torrents.

December 29 2007 at 3:32 AM Report abuse rate up rate down Reply
Simon Arch

"1 good one in an entire CD is not going to cut it and..."

I assume you mean one good song per CD, yes? I've said this before and I'll say it again: if you're listening to CDs with only one good song, you're listening to the wrong CDs. I won't presume to tell anyone else what his taste in music SHOULD be, but I will say this: if you're only listening to artists who produce one or two songs you actually LIKE, then why not try expanding your horizons? Try some jazz or classical music. Try some swing. Ask your parents what they listened to when THEY were your age and check it out. And if you prefer rap or pop or rock or whatever, there are plenty of TALENTED performers out there making 'real' music for you to choose from. Don't drink from the RIAA's firehose (aka the Top 40). It's rarely satisfying. I guarantee you'll find artists whose work inspires you and who you want to support.

December 29 2007 at 2:13 PM Report abuse rate up rate down Reply
Christina Warren

For me, download services lack something that is absolutely paramount when I choose to buy a DVD (and my DVD collection is very, very, very large): extra content. Lots of people don't care and will buy rental from iTunes or On-Demand or any other download (in essence) service, but I buy DVDs and I use Netflix because of the extra content. I like having deleted scenes, director commentaries, making-of-documentaries, etc.

Nothing against just watching the movie without anything else, but I subscribe to HBO, Showtime, Starz, Encore and get IFC, Sundance and a few other commercial free movie channels as part of my cable line-up. There's too much stuff that I can watch for free (especially via On-Demand, which has tons of HD content), not even including my physical rental options, that make using iTunes for movie rentals absolutely useless. If it's 3 AM and I absolutely MUST watch a film from Fox that I don't have on DVD and that isn't on On-Demand - OK, sure - but barring that...

December 29 2007 at 2:41 AM Report abuse rate up rate down Reply
BJ Nemeth

Apple has a huge leg up in a battle with Netflix because Apple already has video software in use on millions and millions of computers, both Mac and Windows.

So if Apple and Netflix were to have identical downloadable offerings, with similar terms, which company would you bet on?

It'll take a few years and a lot of big media cooperation before an online rental library (Apple or otherwise) can rival the library of physical DVDs offered by Netflix.

I don't see how a Netflix-style subscription model would work for downloads, at least not with a "one-at-a-time," or "three-at-a-time" system. With downloads being nearly instant, you would only ever need one movie in your "possession" at a time. When you finished watching, just download a movie. You could get through 12 movies in a 24 hour period -- not so with Netflix, because of the time required to mail movies. And that difference in access certainly plays into the cost argument.

The Netflix online download model is genius, where you get a specified number of hours per month, to spend however you'd like. But I don't see a system like that working for iTunes. iTunes is set up for files that can be downloaded to iPods and iPhones -- so those files would need a time limit rather than a bandwidth limit.

I just don't see any possibility of a subscription movie model for Apple's iTunes. If Apple does movie rentals, it will be self-destructing (but portable) individual files that last for 1-3 days, and cost $3-5 each.

December 29 2007 at 2:34 AM Report abuse rate up rate down Reply
Rafe H.

When CDs first debuted, companies were not fearful of pirating because of the current bandwidth limitations. This is well-documented.

Netflix, being a bit more forward-thinking than Scott about this issue :), certainly consider Apple and Amazon as competitors. I don't think they're fearful though. Certainly Netflix knows what it needs to do to compete when the bandwidth arrives.

Blockbuster isn't fearful because they haven't even considered this issue.

December 29 2007 at 1:51 AM Report abuse rate up rate down Reply
Andrew

I'd be happy to rent movies from iTunes if they were able to provide all the extras I get with DVD rentals from Netflix: deleted scenes, commentary tracks, etc. In fact I've often wondered why the studios aren't offering those kinds of things as standalone inexpensive digital downloads already.

December 29 2007 at 1:04 AM Report abuse rate up rate down Reply
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