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Tired of the high price and long lines at theaters? Well now to can sit at home and watch movies on your computer. But “which is best?” This has been the ongoing debate to online lookers and theater junkies for years ..let’s get some help!
We’ve found consumers have been slow to embrace legal digital downloads, deterred by a host of obstacles including long download times, prohibitively high pricing (particularly for digital retail) and the limited choice of titles. However this has changed alot infact titles keep up with the box office very well.
These issues are being resolved,broadband speeds are increasing, pricing is coming down and Studios are becoming more willing to license their content. The transactional online movie market is beginning to pick up – Screen Digest forecasts 1.3m digital movies will have been rented or bought in 2008 alone.
But this market growth doesn’t mean that other video downloaders will exit the market is unwise. The market has grown primarily as a result of the introduction of movies to Apple’s iTunes store (iTS) in June 2008 and the iTS now dominates the online movie market successfully.
Outlets which are not closely bound to a device, including those run by AAM, struggle to generate significant sales volumes as consumers are reluctant to buy content which cannot easily be moved off their computers.
So the launch of movies through the iTS has also compelled other stores to lower their prices in order to compete with those set by Apple – 10.99 for digital retail new releases and 6.99 for library titles. While this is good news for consumers, this price drop reduces the already low retailer margins still may go further.
If we look at it from an economics perspective, the transactional online video market is shaping up to be a ‘value-add’ business. The successful service providers investing heavily and paying over the odds for content for digital distribution in order to drive a separate, higher-margin profit centre – devices sales in the case of Apple.
Other companies don’t have other business centre for which its online distribution network could play this supporting role. As such concentrating on digital cinema, in which AAM is one of the leading players in Europe, is likely to prove a far more profitable use of AAM’s resources than maintaining its online distribution network.
So our reasearch from looking at these changing markets from ipods to theaters people in general love both and will continue to watch both. From Japan to Sidney movie watchers love their movies any way they can get them.
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