iTunes Movie Rentals, DRM, and The Big Problem™

On Tuesday morning, Apple announced the all-new Movie Rentals in the iTunes Store. Fantastic idea, god-awful implementation. Here are a few points to add clarity to how bad we’re in trouble, and how completely out-of-touch Big Media is with the real world.

1. iTunes Movie Rentals debut 30 days after physical DVD releases. — That’s right, 30 whole days. Why? I have no idea, other than Big Media wants to get people to drive down to their local Walmart store and purchase a physical box with a physical disc in it first. Here’s the problem: In the high-bandwidth digital world that we currently live in, distribution costs are next-to-zero. However, in the archaic world that Big Media lives in, whoever solves the [physical] distribution problem makes the most money. The problem is that distribution is no longer a problem (now that we’re in the digital age), and Big Media is still trying to solve it. (See Sony’s DRM-Free Gift Cards.)
2. iTunes Hi-Definition Movie Rentals are only for AppleTV, not for computers. — You’ve got a 20-inch monitor and a 640×480 resolution movie playing. Seriously? Why? Oh, because Big Media wants to charge a premium for HD content, and if it ends up on a fully-functional computer then the DRM might get broken, and they would lose control of the content. Nevermind that I’m watching a tiny video on a giant monitor/TV/whatever. And nevermind that I don’t have an AppleTV.
3. HD content is available to rent, not to buy. — You can rent HD content on your AppleTV, but you absolutely can’t buy it. Why? Because Big Media wants to get people to drive down to their local Walmart store and purchase a physical box with a physical HDDVD or Blu-ray formatted disc in it. Oh wait, you have a Playstation 3 so you want watch Blu-ray movies, but Bourne Ultimatum is only available in HD in HDDVD format. I guess I’ll need to spend another $300 for an HDDVD player as well.

Now, for a consumer who owns an AppleTV, the fact that they can rent movies directly from their TV without having to drive to the video store is pretty handy. For the rest of us that are more digital media savvy, it is absolutely amazing to me that Big Media is so out of touch with their customers that they would do this to them.

Now, let’s look at the reality:

1. Having two competing HD formats is bad for consumers. — Lots of people have either Playstation 3’s, Xbox 360’s, Tivo HD’s, and relatively modern computers. Why are we wasting shelf space with physical discs where some movies are in one format and other movies are in another format. Digital 720p/1080p movies should be Big Media’s biggest push right now, and it’s not. Lost money, right there, lying on the floor.
2. Having insane DRM restrictions hurts consumers. — Why waste the time with heavily DRM-laden content, when I can just get DRM-free HD content from the darker places on the internet (the “DarkNets”)? After reading about how this guy’s Netflix downloads wouldn’t play because of the monitor he was using, you can bet I’ll never use the Netflix service, Amazon Unbox, or Windows Vista… EVER. I’ll just download content from the DarkNets because the currently-legal-yet-ridiculously-broken models for digital media suck for consumers.
3. The DRM used by the Blu-ray and HDDVD formats has already been broken. — It’s only a matter of time before more people buy HDDVD and/or Blu-ray drives for their computers, crack the DRM on movies they rent, and post those consumer-friendly files on the internet. That business model (give away good stuff for free) is far more effective — and will ramp up faster — than either Blu-ray or HDDVD will in the marketplace.

Now, here’s my proposal: What if, instead of causing consumers grief with ridiculous restrictions on HD content, what if there was a way to monetize the flow of this content across the internet? Where money was made, not by restricting the content beyond belief, nor by forcing people to drive down to their local Walmart store and purchase a physical box with a physical disc, but by monetizing the free flow of the content. The more the content flows, and the more people who share HD movies over P2P, the more money is made.

What would that world look like? Consumers would certainly be happier because they could get whatever they wanted, whenever they wanted it. Labels and Studios would be happy because they’d be making more money than ever before by embracing this new model. Everyone wins, right?

All I’ll say is this: WarpShare. Keep your eyes and ears open folks. More information is coming soon.

Oh, and for anyone keeping track of the current score, Piracy is beating Legal Solutions: 489,672,211,642–0.

Movie Makers Just Don’t Get It

With all of the recent hoopla about Sony dropping the UMD format (here and here), it’s little wonder why. The reason? This Think Secret posting gives all the explanation we need:

Cinemanow bills itself as “the #1 legal movie download store” and sells movies a-la-carte, but for the same price, if not higher, in some cases, than actual DVDs, killing part of the incentive for purchasing a digital download.

Why would anyone want to spend more on a movie in a format that is significantly less flexible than a DVD? Yeah, I’m not sure either.

I flew from San Jose to Omaha last month, with a layover in Minneapolis. All-together I was on a plane for roughly 5 hours. I had my Powerbook, PSP, and iPod 5G with me. I had some videos I’d purchased from the iTMS on my iPod, and a couple of DVD’s for my Powerbook. While I was waiting for my flight to leave, I went to go find a UMD video to watch on the plane, since the iPod gets about 2 hours of battery life when playing video, and my Powerbook (with a 2-year-old battery) gets about 45 minutes of juice.

I walked up to the counter, looked at the selection, and found a couple that I’d've liked to watch. Then I saw the price: $32. Excuse me? Thirty-what? With a DVD, I can watch it on my TV, watch it on my computer, I can rip it to my iPod or PSP and watch it from there. With a UMD disc, I can only watch it on my PSP. Why would I want to do that? Since the format is so limited (along with any sort of “legal” (read: DRM’d) movie downloads from an online store), how on earth does it make sense to charge more for it? It doesn’t, and that’s why the format is failing. It isn’t because it’s a bad idea — it’s actually a very good idea — but they need to drop the cost to 50% of the price of a DVD.

Seriously, if most DVD’s are around $17-$22, then they should sell the UMD’s at $8-$12. Paying $30 for a 10-year-old movie is completely out of the question.

Sony (and all other movie companies), if you’re not willing to drop your prices on your UMD movies, then it’s definitely time for the format to go the way of the Aibo, Mini-Disc, BetaMax, ImageStation, Connect Music Store, and all of the “iPod Killers” you guys have had in the past.

Best Wife Ever

Okay, so have I ever mentioned how cool my wife is? Yeah. I had my 26th birthday last week, and when I got home that night, I had one of these awesome little toys waiting for me. The 60GB model. Yeah.

But that one was broken.

So I exchanged it for a new one, and that one has been awesome. Combine that with Tivo, Tivo AutoPilot, and a few hours of patience, and I was watching Tivo’d episodes of Alias, Lost, Veronica Mars, and the Mind of Mencia on my iPod the next day (which came in handy because I had a lot of riding-in-a-car to do that day).

I seriously have the best wife ever.