aTypical Joe: a gay New Yorker living in the rural South
Thursday, June 16, 2005
The future of movie rental
Even before Murdoch completed his acquisition of DirecTV, he told financiers at Morgan Stanley’s Global Media Conference that he planned to marry the satellites above with TiVo-like home recorders below, explaining that “every subscriber will be getting either a free digital video recorder or one for nominal amounts of money.” And, to this end, he placed an order for 20 million digital video recorders for his customers.
[...]
Murdoch plans to digitally deliver movies and other programming from his satellites to home digital video recorders that would be the same quality, or higher (HDTV), than a DVD. Since there are not enough transponders on satellites to stream movies to individual subscribers on demand, Murdoch needs DVRs in every home to make his digital-delivery system work. With DVRs, the satellites can upload movies in the middle of the night in encrypted form onto subscribers’ hard discs without us having to do anything or even be aware of it. (One idea now under consideration at DirecTV is to provide these DVRs with an enormous 160-gigabyte recording capacity. The subscriber would only be told about 80 gigabytes, with the remaining 80 gigabytes reserved for encrypted movies.) Once the movies are placed on the DVRs, a customer “rents” them by clicking on his remote control.
Yes, but:
There’s just one catch. To make digital video on demand work, Murdoch would have to overcome a formidable barrier-the 45-day head start that video stores have been given. This so-called “video window” is the result of a long-standing unwritten agreement among studios to delay the electronic delivery of movies for at least six weeks after video stores have had the opportunity to rent them.
Isn’t that called collusion?
What has prevented the studios from closing the video window is, as a top Viacom executive explains, “In one word: Wal-Mart.” Wal-Mart, the single biggest seller of DVDs, does not want to compete with home delivery. The company told Viacom’s home-entertainment division, in no uncertain terms, that if any studio does away with the 45-day video window for a single title, they would risk losing access to Wal-Mart’s incredibly valuable shelf space for all of its DVDs. In the face of Wal-Mart’s retail power (the antitrust term for it is monopsony) the studios have kept the window wide open.
Epstein expects Murdoch will win. Me too.
Via PVRblog.
