Who has the upper hand in the online movie business? Is it too early for the upper hand to matter?
POSTED ON 9/08/2006 | PERMALINK |0 Comments | BOOKMARK

Once again, Cringly's take on a scenario is drastically different from anything else you'll read.
Apple had an announcement planned for July 6th but cancelled at the last moment. Interestingly enough, Amazon.com also had an announcement scheduled for that same day in July and it too was cancelled at the same time as Apple's. Both companies planned to talk about their movie and TV Internet download services. The fact that both announcements were cancelled at the same time is especially curious given that the Wall Street Journal tells us that Apple and Amazon are using completely different technologies, with Amazon's being based on Microsoft code.

Channeling Steve Jobs now, I'd say the delay came down to this: Apple was still struggling to put together the right list of participating movie companies and needed to postpone the announcement so Steve could beat up on a few more studio honchos. What got Amazon to postpone their announcement was indirect pressure from Steve, who didn't want to be shown up by Bezos & Company delivering more titles -- a LOT more titles.

So Apple got Amazon to postpone its announcement by holding out the lure that Amazon might get Disney to participate in a later event. According to the Journal and elsewhere, the only major studio Amazon doesn't have is Disney, which I am sure they would sorely like to have. Meanwhile, the only major studio Apple reportedly has IS Disney. That connection and Jobs' role on the Disney board (as well as being the company's largest shareholder) made it possible for him to force Disney to force Amazon -- well you get it.
I personally don't see a market for online movies yet. DVDs, unlike most other media, are inexpensive and feature-rich. Netflix has taken care of the "I don't want to leave the house" problem. Why would anyone want to purchase movies online at this point? The products are going to be missing the features that have made DVD's such big sellers. They're going to take forever to download. And DRM is going to severely limit how you use media you supposedly "own".

This sort of rollout depends on the enthusiasm of early adopters to carry the product through its first year or so. Apple is particularly dependent on this sort of behavior. Unfortunately, video enthusiasts probably aren't going to be too enthusiastic about surrendering their expensive home theater systems to the limited products Apple and Amazon have to offer.

There's already a giant market for online video. But it's too soon for Apple or Amazon to make a dent in the mainstream DVD market.
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