Streaming Into the Future

Screenwriter John August recently spoke about the costs of HBO.  By recently I mean April 9th.  He is primarily addressing the costs of HBO* and premium channels.  John (ahhh yes, as if I know him from reading his blog) makes the following comment:

Consumers have an artificially low expectation of how much digital things should cost.

Mr. August is right on the money.  I see this most in streaming discussions.  People are convinced that streaming is the future and that Blu-Ray is a dying format.  The humor there, of course, is that I heard the same claims when DVD first came abut.  People thought it was laughable that anything could supplant the dominance of DVD.  And people have been claiming the Blu-Ray format is dying while sales climbed…they made the claim for the past four years.  People are sure of the idea that streaming and digital downloads are the future for a pretty simple reason.  It’s cheap.

Netflix uses unlimited streaming as a gateway.  They want you to choose both DVD/Blu-Ray and streaming options, but they will take the hit.  Of course, movie companies would like folks to switch over to digital copies.  Why?  Ownership.  If you buy a digital copy, you do not actually own a copy of the movie.  Companies are already setting up contracts that your ownership of your digital copy will expire in a certain amount of years.  Streaming  has a number of problems, especially in quality.  Sure, standard definition is not to much trouble…but you do not get 1080p in most cases.  And it is very easy to have trouble streaming the higher definition videos.  A blu-ray does not have to rebuffer every few minutes because your internet connection gets a bit strained.  Sub-titles are a problem if they are not a part of the actual video picture.  Digital copies are still about $15 and you usually just get the movie.  I’d rather pay $22 for a Blu-Ray with special features.  If I am paying money for something, I prefer to own it.   And what do people think is going to happen if they do manage to eliminate DVD/Blu-Ray and everything goes streaming?

We’ll find out the real cost of streaming.  I think people assume that because Netflix only charges $7.99 now, they will always charge that when they go to streaming only.  I do believe the streaming the future of rental.  There is no doubt in my mind about that.  There are plenty of movies one will never be interested in owning, but still are curious to see. But I am also very confident Netflix will increase it’s pricing and drop unlimited streaming.  Most likely, it will be a tiered system where you get to watch a certain number of videos each month.  And the number of videos will be determined by how much you are willing to play.  Or maybe you will have to pay to access certain types of films.  Want to see the big Hollywood hits?  Well, get the Hits package!  Understand, Netflix is taking a hit right now.  They lost their deal with Starz over money.  It is costly to work out deals for access to movies.  That is why Netflix has so many low budget and older films in their library.  It is less costly.  Maybe I am wrong.  Maybe Netflix will not raise prices.  Maybe, just maybe, they can cut the deals needed to get the newest Hollywood hits for streaming along with older films and television without raising the cost from the current $7.99.  But I suspect that is not the the most likely scenario.  People don’t believe it of course.  They think it is alarmist and streaming is the great cheap future for movie lovers everywhere.

And that is because John August is right:

Consumers have an artificially low expectation of how much digital things should cost.

 

UPDATE:  What a Shock…Hulu is looking at a change moving farther from free streaming

*I also agree with John that HBO Go is a nice feature.  Thanks, HBO!!!!

One thought on “Streaming Into the Future

  1. I agree they’ll probably be upping the charges eventually, but I can’t envision that going well. “Wait, last year we had free sites & $9 unlimited streaming. This year they want us to pay $14 for 14 hours?” (Or whatever the rate will be)

    I do use streaming a good bit, like on Netflix, because it’s so cheap & the ability to just get on any time I’m bored and look up something that’ll pass the time for an hour or two is a decent value.

    When it becomes something I have to manage…. I’d rather just cancel streaming and wait for the DVD’s of the movies I really want to see.

    I can’t help but think there are lots of people who are probably along similar lines.

    Ironically making it so cheap will probably backfire when they want to make it the main method of delivery.

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