Movie downloads compete with DVD

brokeback.jpgMovielink and CinemaNow announced today that they will have day and date releases with their DVD counterparts reports the Wall Street Journal this morning. Starting tomorrow with Brokeback Mountain, both companies will give users the ability to buy movies the same day they arrive on DVD.

Both seem to limit what people can do with the movies. Movielink will allow users to burn the movies to DVD, but those DVDs will only be playable on PCs. For the privilege, Movielink will be charging between $20-30 per movie for new films, on par with DVD’s MSRP, but not the actual street price. CinemaNow will be charging between $10-20 per movie, but users won’t be able to burn the movies to DVD.

More details at WSJ.com (paid subscription) and Yahoo!

A few things about these deals are interesting. First, while the pricing is expensive, this model of distribution marks the beginning of the end of offline distribution. For the longest time, I’ve been talking about how stupid the HD-DVD and Blu-Ray war is because of the high consumer penetration of cheap bandwidth and the popularity of portable players such as the iPod, it will only be a matter time before all video and audio content is available for download. While these movies are not in HD, HD-DVD and Blu-Ray really only have a 2-3 year lead time on HD media delivery over downloads. If there is no clear winner between the two, consumer adoption of downloads will win the HD distribution war sooner, not later.

The second thing that is interesting is that the pricing model gives the movie studios two release windows that are much more favorable to them. The way Movielink has set up their initial go at movie downloads is that if you want the movie when it is a new release, people cannot rent it and must pay a higher price for the movie. Depending on the success of the Movielink deal, I could see the studios offering movie downloads before the DVD release to bilk more money out of hard core fans. In the end, the pricing model could limit the success of movie downloads.

Lastly, these pricing and delivery models really makes me wonder what Apple has up their sleeve. The prices are decidely expensive and their services are confusing to the average user. Neither service control the whole consumer experience like Apple does. The pricing is not straight forward and most people don’t have a computer connected to their televisions, further limiting their success. If Apple is going to enter the movie download business, I wonder what they have up their sleeves to make this a truly seamless experience.

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