In less than 24 hours, two major announcements took place that promise to reshape the streaming video market and, in the process, perhaps do to DVDs what digital music is doing to the CD industry.
Yesterday, the DVD rental company Netflix announced that it is lifting nearly all restrictions on the streaming of movies by subscribers (the lowest subscription tier, at $4.99 per month, will still be limited to just two hours per month).
"In talking with members about our streaming feature during the past year," Netflix Chief Marketing Officer Leslie Kilgore said, "it became clear that, as with DVDs, the idea of streaming unlimited movies and TV episodes on a PC resonated quite strongly. And we're now in a good position to offer that."
Swamped by Apple?
Netflix boasts more than 90,000 titles, 6,000 of which are downloadable without restriction now that limits have been lifted. To remain competitive, Netflix lifted limits and retooled its DVD-by-mail business model, which was increasingly threatened by streaming movies from competitors.
Initially, that threat had been slow to develop, in large part due to studio concerns about the impact of downloads on sales of DVDs and movie tickets, as well as consumer preference for watching movies on higher-resolution televisions instead of PCs. But with the growing quality of downloads, better laptop screens, and the increased ability to watch downloads on a multitude of devices, those objections are fading.
The pace of downloads may accelerate, thanks to the announcement by Steve Jobs at Macworld that Apple's iTunes Store will start offering major Hollywood films for download -- and there's no question at whom Apple is taking aim.
"iTunes Movie Rentals instantly brings great movies from all the major studios directly to your iPod, iPhone, TV or computer -- without having to drive to the video store or wait for DVDs to arrive in the mail," said Apple CEO Steve Jobs. "Movie lovers can now discover and enjoy movies as simply and easily as music lovers discover and enjoy music today on iTunes."
Some Restrictions Still Apply
Apple's enormous influence in Hollywood has enabled it to work out licensing deals with most of the major studios, including Warner Bros., MGM, 20th Century Fox and New Line Cinema. Movies will generally be available for $3.99, with older titles priced at $2.99 and high-definition movies a dollar more.
As commentators were quick to point out, a number of restrictions still apply. In an effort to offer some lingering protection for DVD sales, new releases will not be available on iTunes until 30 days after the DVD has been released. Although consumers will have as long as 30 days to watch a movie after they have downloaded it, it must be finished within 24 hours of pressing "play."
One interesting innovation is that consumers will be able to switch a movie halfway through from one device to another. So, for instance, someone could begin watching a movie on his or her computer and then transfer it to an iPod to finish on a plane flight.
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