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Movie Rentals without the DVD

June 29, 2007 | Author: Ibex Marketing

What if you could rent movies to watch at home, and not have to go to the store to pick out the DVD? Or even go to the mailbox to get the DVD that was sent to you by NetFlix or Blockbuster? What if there was no disc at all? What if you didn’t have to choose between HD DVD and Blu-ray for high definition movies?

If you’re like me, you’d probably view all this as a good thing. (I don’t want to spend $300 to $500 to get a new DVD player just so I can get high definition movies.) A lot of companies are betting that you’d agree. Enough U.S. homes now get broadband service and hard disk storage capacity is insanely inexpensive, making movie rental delivery over the Internet a practical idea. Even if you have to wait overnight for a high definition movie to download, it’s faster than mail and easier than driving to the video store. It’s sort of like using TiVo to record a show to watch later.

Apple’s iTunes and Amazon’s Unbox already let you purchase or rent movies and download them. The news is that other well-known companies are also looking into this distribution mode. In a conference call with analysts last month, the CEO of the movie studio Lionsgate mentioned that the company had reached digital distribution deals with Apple, Amazon, Best Buy, and Blockbuster, among others.

Now, Best Buy and Blockbuster have not publicly announced plans for movie download services, but it makes a tremendous amount of sense. Whether you’re selling or renting, digital distribution elminates the cost and hassle of maintaining and distributing physical discs. And from a rental perspective, it makes the problem of lost or damaged discs just go away. And it makes the question of HD DVD or Blu-ray format unimportant.

The remaining problem is making it as easy to watch a movied downloaded from the Internet as it is to watch a show you’ve recorded on your TiVo or digital video recorder. (Amazon has made some limited steps in this direction with Unbox and TiVo.) I expect that we’ll soon see a generation of video recorders that are programmed to make movie purchase or rentals as easy to select as it is now to schedule a show for recording. Maybe even easier. The first company to solve this is likely to have a competitive advantage similar to that enjoyed by TiVo when it first came out. It’s not a question of whether this will happen, but when.