A couple of days ago it was announced by Bloomberg that Disney is in the middle of renegotiating its previous agreement with the Starz Network in an effort to take back the rights to digital distribution of its films. This new agreement would limit the current online distribution of the Starz Network's films through Netflix.
http://tiny.cc/Z5m7Y
Disney's push towards re-appropriation of digital-distribution seems to be in support of the company's previously announced "Keychest" project. "Keychest," as described by Disney studios's president of home entertainment, Bob Chapek, would allow consumers permanent access to digital properties (ie. movies and television shows) across multiple platforms and digital devices. The technology is similar to that currently used by Google Docs in that the information is stored on a digital "cloud" from where it can be accessed at any time. This would allow for a customer to begin watching Mulan on television at home, pause it and continue watching it on a cell phone in the car, and finish it on a lap top in the park.
So what does this change spell for Netflix? Would you prefer digital ownership to digital rental?
Discuss...
3 comments:
I would like to say that I'd prefer digital rental over digital ownership, because when I ask myself the question I immediately think of the bookshelf of DVDs that are sitting at my house that never get watched. But at this point, the value of digital space is becoming so close to zero that the opportunity loss, or in this case spacial loss, is next to nothing. This, in concert with the fact that if you want to watch a movie three times over the course of your life the price is the same to rent or to by, has me leaning towards digital ownership.
I've found that a large part of my collection was purchased as an attempt to preserve parts of my child hood and pass it down to future generations. But there is no guarantee that the DVD will be around in 10 years. I do know that if I hold on to a digital copy on my hard drive then I 'll be able to view the content regardless of the evolution of our technology. Well, barring viruses, wear on hardware, and operator errors (knock on wood.)
Bottom line, for me anyways, if a movie or TV show is good, I'm going to want to see it more than twice. And if it's not good, I'll let a buddy rent it and view on his dime.
To answer the question, “what does this change spell for Netflix?” I think nothing at the moment. I believe in due time though this will be issue Netflix will have to address. I believe this will have to be evaluated by Netflix when the time is needed. Blockbuster or many other movie rental places did not offer online movie rental until many people had already switched to Netflix or whatever online rental company they use.
Would I prefer digital ownership to digital rental? If the price was the same as renting the movie, I would have to say yes. If the price was substantially higher then the only way I would prefer digital ownership would be if I knew 100% that I liked the movie. Digital ownership would have some advantages as long as it was guaranteed full proof to work. If the digital ownership in some way malfunctioned then I believe people should get their money back. If I were to try digital ownership for the first time and it malfunctioned I believe that would have an effect on whether or not I went with the hard copy DVD or just renting the movie from Blockbuster, Netflix, etc.. It would be interesting to see how digital ownership would be incorporated into modern technology.
Disney's "Keychest" project is just another example of the modernization and adaptation tactics the company has taken over time to remain the juggernaut it has become. It is an excellent idea and while the impact may not be immediate, there will without a doubt be repercussions on companies such as Netflix.
I don't see this as a move for Disney to directly compete with Netflix initially more than it is a step to avoid finding itself behind the digital curve and losing footing in future endeavors. In reading the original article, I was surprised to find that this is only the most recent in a number of actions taken by Disney to establish itself in the constantly changing digital landscape. According to Fixmer and Grover's article, Disney's Chief Executive Officer Robert Iger "was the first to sell TV shows and films on Apple Inc.'s iTunes." In reading that, I see that as being a preliminary move to test the waters in the digital environment and in the process lay the foundation of what is to become the "Keychest."
Moving on to the argument between digital ownership and digital rental, I'm sure my opinion will change closer to a time when that decision would have to be made on a daily basis. However, as for now and like others have already mentioned, it would come down to the difference in price between rental and ownership, and most importantly, the movie or show itself.
Pursuing the "Keychest" project is a shrewd move on Disney's part to secure a facet of their fortune that has continually generated great returns for them. Just as the "Disney Classics" made the shift from VHS to DVD virtually seamlessly, I see this as another way in which Disney is keeping up with the times.
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