Paid Downloads Dead: No Way

16 05 2007

James McQuivey released a report a few days ago that says that Paid Downloads will peak at $279 million this year, up from $96 million.

Liz Gannes at NewTeeVee takes issue with this, however admitting that she may be one of the affluent geeks currently even downloading paid videos.

The video/TV/movie/film landscape is definitely changing. However, it is a rapidly expanding pie. Production of everything from YouTube short clips to full-blown TV and channels on Joost to more independent films and productions. It’s an amazing democratization of media, something we should all embrace.

There will be pre- and post-rolls for the time being, although this method will eventually go the way of the banner: used, but increasingly less relevant. There will be participatory media and product placement, two areas that hopefully see some useful innovation and work towards democratization.

I buy the argument that Joost is a leading catalyst for ad-supported video. Short, independent content will thrive in an ad-optimized environment, of which Joost seems to be the key catalyst. Much professional content will find a way to monetize appropriately as well.

The business model, delivery method and technology for paid downloads aren’t there yet. It’s not there yet for ad-supported video. Hollywood can not sustain movie productions on advertising alone (Spiderman 3 anyone?). The machine works pretty good as it is – and a payment mechanism is necessary, whether it’s a DVD purchase, rental service (which still pays the content owner by way of the original purchase or revenue share agreement) or paid download/rental.

Will piracy kill the business? It may start to have more adverse effects, but this is a big business- people will figure out how to protect their revenue streams within reason (hopefully more so than the music industry). Early jumps into paid movie downloads to start to figure it out suggest that there it will turn out at least better for movie studios than for those in the music industry.

This being said, I’ve said before that Paid Downloads has major issues. It may be true that it will stall significantly until we get some true innovators to figure out the model.

As Founder of iLetYou and a true believer in easy solutions, I understand and believe the DVD and disc are going to persist for a while. News like this only prolongs how long it will be.

However, I love technology and want to promote what’s best and easiest for consumers so it’s certainly not that I’m rooting for the death of paid downloads. I just believe the march to an all download/streaming world will be a slow, slow march for many of the same reasons there is a new proclamation that Paid Downloads are dead. Delivery to the TV will have to be a seamless experience, DRM will have to die.

The future holds more great content, all around. Let’s not forget all of the great pieces of film art enabled by plunking down bucks for a movie ticket, a VHS or a DVD. It’s digital equivalent is not dead- it’s just a slow, maybe even zombie-looking march at this point.

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