September 28, 2005
Video on demand

This Slate article on cable versus satellite is interesting, and in the wake of the passing of the telecom bill here in Texas it may help contribute to that long-promised specter of competition and lower rates. I know, I know, but stranger things have happened. Give it a read, and be sure to also read critiques of it by Matt Yglesias and Mark Evanier.

One thing that the Slate piece talks about as a weapon cable has against satellite is video on demand. I'm curious about something. I've never been particularly interested in VoD. That's partly due to TiVo, where there's almost always something I like available to me to watch, and it's partly due to the fact that I'm not a big movie buff. (Of course, looking at the Now Playing list, it's also partly due to the lack of desirable content.) Show of hands here - how many of you have watched a movie via "on demand" programming? What would get you to order a movie this way if you haven't?

For what it's worth, I think Evanier nails it:

I dunno...if you're going to pay to see a new movie, wouldn't you rather have the DVD? Even if it means waiting until your next trip to Costco... when it'll probably be cheaper? Once you have physical possession of the DVD, you really "own" that movie. It's not going to get deleted off the hard drive of your Personal Video Recorder or lost if there's a crash. You can watch it whenever you want it on any TV in your house that has a DVD player. You can take it to a friend's house and watch it there. You can look at a little shelf of DVDs in your library and say, "I own those" and feel like you really got something for your money. This could get into a long discourse but basically, I think the new age of cable and the Internet is disabusing people of the idea that you pay for content. A lot of people feel that they're not stealing if they download a bootleg of a new movie. They'd never think of stealing a DVD or a VHS tape of that film but just moving a copy to their harddisk is different. That same, dubious distinction is what I think will discourage people from paying to have a new movie delivered to their PVRs when they could be getting a tangible DVD for their bucks.

What I think VOD is going to have to do is to offer people programming they can't go and buy at Sam's Club. I'll pay to add new channels to my DirecTV subscription because that increases my viewing choices. But I've never bought a pay-per-view offering because I've never seen an ad for one it would bother me to miss. If I cared about sports, that would probably be different.

The business model for VOD may not be in TV. It may be established by Howard Stern's pending move to Sirius Radio: How many people will buy the units and subscribe to hear Howard, for the first time, unexpurgated? (My guess: Not nearly as many as Sirius is projecting. I think a lot of people will never accept the idea of paying for radio. And as Stern's show gets dirtier, it's going to be more frustrating to listen to it and not be able to see. Betcha that within three years, he moves the whole thing to HBO or Showtime...or to VOD, where it would indeed be something you couldn't get elsewhere or buy at Sam's Club.)

Video on Demand as programming that can't be had by other means is something I'd consider. Otherwise, it feels to me like a service for people who think Netflix is too much work. What do you think?

Posted by Charles Kuffner on September 28, 2005 to Technology, science, and math | TrackBack

When I had cable but before I had the PVR from the cable company, I did watch several movies from the VOD service when I was too lazy to go to the video store. There were rarely more than 2 movies on it that I wanted to see, but often 2 was enough choices.

Once I had the PVR box, though, it was always full of shows and movies I'd saved. It was a time management challenge just to make sure I got through all the movies I'd saved from Sundance, IFC, and HBO. So then I didn't have an entertainment "hole" to fill, and I didn't need to resort to the VOD or going to the video store unless I was in a particular mood for something I didn't have.

I definitely wouldn't rather just buy DVDs. I try to see about 40 movies a year that I've never seen before, but only 1-2 of those do I want to ever see again. A DVD, even at Costco, costs more than the $5 or so to watch a movie on the VOD system. And I don't like owning a lot of objects.

What I would like is the ability to buy the data without having to buy, store, dust, and then eventually often get rid of the object. ITunes for movies, basically.

Posted by: Skye on September 28, 2005 5:57 PM

Agreed. Given a choice between what's available on-demand and reading blogs?

Posted by: Amerloc on September 28, 2005 6:38 PM

It seems to me that some things are worth getting VoD, but all in all, the idea of actually owning the DVD (mini-disc or whatever wins to the next marketing war) does feel a lot better and is more convenient in the long run than VoD.

As for Tivo or DVR, the monthly service charge is definitely less than buying a whole season of a show on DvD (if it is even out yet). And, even if you can't watch it at a friend's house, it is incredibly convenient to record whatever show you want and watch at your leisure.

I couldn't live without my DVR. I would miss every episode of The Daily Show and The West Wing and Inuyasha. Come to think of it, I would miss every one of my shows because of my wacky work schedule.

And I'm content to pay $20 a month to watch whatever movies I want through Netflix. I only have to wait two days to get the DVD of my choice and that makes the trip to the local Blockbuster obsolete for me.

Posted by: Nate-N on September 28, 2005 6:43 PM

Otherwise, it feels to me like a service for people who think Netflix is too much work.

That's exactly the chief selling point of VoD; a few dozen middling studio films that are good for passing the time if you want to watch a movie right this minute. My family and I made use of it a few times while we were all home from school/work because of Hurricane Rita; it's cheap, it's easy to use and it has a selection comparable to the new releases section at Blockbuster.

Now, if I want to watch The Discreet Charm of the Bourgeoisie, I queue it up at Netflix and wait a day or so to watch it (like I did a few weeks ago). I doubt very much that TWC will ever let me order Bunuel movies, probably because there won't ever be a demand for those types of films; if VoD ever dominated home video to the point where I couldn't order less-popular films from Netflix, then I'd be worried.

I'd disagree with Evanier on a few points. Unless you plan on watching something again, who cares if you own it or not? Just because you bought something that you can't hold in your hand or put on a shelf doesn't mean you've invested in something of no value. But more broadly, I think he misses the point. VoD is for people who want to watch a movie (most likely a new release studio film) right now, because it's a hassle to get in your car and argue about what to watch once you get to the video store, or worry about returning a DVD, or pay a late fee.

As for paying for content: the existence of credit and debit cards to me seems to act as a counter-balance to paying for something you can't hold. Evanier argues that people would rather take some green pieces of paper out of their wallets and drive to a place of business to exchange them for a plastic wrapped case with a disc inside rather than pay to see a film. But if you get to watch a film and the only consequence is an extra $3.95 on the bill you get at the end of the month, then the whole "something-for-nothing" argument seems to break down.

If you view films as objects (like socks) rather than experiences (like a play), you might see it differently. But I'm not sure most people do.

Posted by: RMG on September 28, 2005 6:57 PM

VOD is not limited to movies. My cable package includes 15 additional channels of VOD ranging from music videos to BBC America and Food Network on Demand. I even have a Staten Island on Demand channel that allows me to see the highlights of what's on public access (OK, I have never seen anything on that channel, but it's there.) Of course, with the premium movie channels on demand, I can watch some of their movies on my own time (including Skinemax's late night offerings) , or catch comedy specials (One of George Carlin's shows is usually on the HBO on Demand channel), episodes of dramatic series I may have missed (the Sopranos, Weeds, etc) or watch a boxing match I may have missed.

Of course, with the Pay-Per-View On Demand Options, some people might want to see a movie rather than paying for Netflix or Blockbuster. Also, as long as cable programmers offer "adult entertainment" on demand, they'll have customers. I have to admit, however, that I would rather wait for a movie to come out on one of the movie channels before viewing it.

Posted by: William Hughes on September 28, 2005 7:20 PM

I think it's really an issue of convenience.

Netflix is a good system, it worked well when I subscribed to it, but I just don't watch new movies in that volume, particularly as most new movies really suck!

And even though the vid store is less than a mile away, spending one minute shopping in a store after, say, working 30 hours straight repairing and/or upgrading a client's network is not on my agenda.

I know people, as well, who live out in the country and I think they would find VOD very convenient as opposed to driving in to town on "a dark and stormy night" to rent or buy a movie.

The rule of convenience would seem to apply as well to highly-congested areas, who wants to fight heavy traffic to pick up a movie?

Or, high crime areas, who wants to pack a piece just to go to the video store?

Or, the kids are sick, (or you are sick), etc etc.

Posted by: ttyler5 on September 28, 2005 9:23 PM

I almost exclusively watch movies, primarily TCM and IFC. Once in a great while I might watch something on HBO or purchase a pay-per-view. I would do that a lot more if the choices were not so lame. By using the DVR I can record enough movies that I have choices if there is not currently something playing that I like. I also usually have something from Netflix waiting. I don't really understand why anyone would want to own the DVD's. I hate the clutter and the majority of them I will only watch one time.

Posted by: bill on September 28, 2005 9:38 PM

For the most part, I don't see much advantage of VoD over "traditional" pay-per-view, which is available via satellite. The big exception would be wanting to watch a movie or TV show (say, the last Trek flick) that's not on PPV, HBO, Showtime, etc.; but that you don't necessarily want to watch more than once, so it's not worth the trouble to spend the bucks and a trip to the store (or waiting for the delivery from NetFlix) to do so.

But that's not such a common situation that I could see anyone choosing cable over satellite just to get VoD! If I had VoD, I'd probably take advantage of it on occasion, but I'm not going to drop my dish subscription and sign up with Comcast just to get VoD.

As for sports, most of us want to watch sports events live, if at all, and VoD has no particular advantage over satellite PPV for live events.

The same goes for news. Why would anyone pay to watch BBC America "on demand?" If I want to review a particular segment that aired last Tuesday, I'll do so via the Internet; if I want to watch the live feed, it could be handled as PPV (though I'd think it'd be part of the basic subscription!)

Music videos or porn "on demand" don't make much sense to me either. How often do you want to watch a particular music or sex flick right now so badly that no other music or sex flick will do?

And as Skye pointed out, there's also the question of just how much time you have available to entertain yourself, as compared to the means available to fill it. Personally, I already fill my free time (not necessarily complete, or in any particular order):

1. Reading blogs
2. Corresponding via email
3. Reading magazines
4. Fiddling with my computers
5. Watching TV series
6. Socializing with friends/relatives
7. Listening to the radio

I daresay my "entertainment hole" is already stuffed full, and I don't even have a PVR yet! (Of course, I do many of the same things with an old-fashioned VCR; remember those? PVR's have a ton of advantages, but if you're just using it to record one show while you're either away or watching something else, a VCR will fill your "entertainment hole" just as effectively.)

Anyway, my point is: for those like me who still work 8-5, new entertainment choices like VoD and PVRs are likely to have only a marginal attraction. Once I retire, it'll probably be a different story, but a PVR would almost certainly bead VoD hands-down.

Posted by: Mathwiz on September 29, 2005 11:20 AM