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Why HD/SD downloads will remain a niche for the foreseeable future

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Why HD/SD downloads will remain a niche for the foreseeable future

Old 03-06-08, 02:00 AM
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Why HD/SD downloads will remain a niche for the foreseeable future

I wanted to share my thoughts about why downloading/purchasing (so no one gets confused) won't take off:

1) Fragmented solutions - There are too many competing for the same small pie. You have Itunes, Vudu, Netflix, Vongo, Amazon, Real.com, the defunct Movielink, etc. More and more services are trying to follow the apple model (Itunes + IPOD) by creating a great device to go along with their service, but none have succeeded. This is also going to be a problem as well because someone is not going to buy 3 or 4 set top boxes to get the various movies that are on the services when they can go out and get a dvd/hd player that has all the movies that they could want.

2) Piracy - Most of the people who download movies are downloading illegally. It'll get worse and worse as more people get faster connections. Unless the government steps in I don't see anything changing.

3) Infrastructure is not there. Let's face it, even with the fastest connections, it takes forever. By no means is it slow, but until we can get up to japan type speeds (60Mbits/sec) nothing is going to happen. Also, the fact that many rural areas still don't have high speed access is telling and probably won't get high speed for a while.

4) The studios - They are already starting to add digital copies to movies. This is probably one of the top reasons why downloading will remain a niche. People are going to see great value in having a hard copy as well as a digital copy of the movie that they have bought. It also saves them the time to download and the cost of buying into a service.

5) Storage space - While we have terabyte HDs today, the space that video particularly HD video eats up is enormous and for downloading to take off, set top boxes or whatever people download to, will need at least 10 terabytes which honestly is not going to happen anytime soon. 10000GB / 30GB to be optimistic gives us space for about 333 movies. Which is overkill, but isn't asking too much if HD downloads are to take off.

6) Reliability - Imagine having your whole entire collection on one disc, now imagine having that entire collection be destroyed. That's the reality with downloading. Having your entire collection one a set top box is a bad idea and with disc based media you can go out and buy a replacement disc except for Salo. If that happens once, people are going to tell others the horrors of having to redownload their entire collection because the set top box crashed.

7) Anonymity - This plays a factor because who wants to be monitored for everything they download. Nobody. This will be another major deterrent to downloading.


Any comments or criticism are welcome.

Last edited by jiggawhat; 03-06-08 at 02:19 AM.
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Old 03-06-08, 02:06 AM
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Spot on. I really don't see a viable Digital Downloads solution for the next 15+ years. It may do well for rentals, but thats as far as it will go.
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Old 03-06-08, 02:11 AM
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Nope. I can see HD downloads as the way of the future. If it's something you can get through you cable provider like a DVR. If I'm cruising through the channels for something to watch and I can order an HD version of No Country for Old Men (Hey, I don't need an overpriced Blu-ray player!) to start playing immediately and it's not very expensive. Then why not?

I think it will work so well for rentals it will put most rental places out of business. As for purchasing movies for keeps, I think one company will have to step up and show everyone that they are the best movie service available (like Apple did for Ipods)
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Old 03-06-08, 02:14 AM
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First, a mod note. PLEASE DO NOT MAKE THIS ABOUT HD DVD OR BLU-RAY AGAIN. Thanks. Anyone leading this astray will be reprimanded.

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Old 03-06-08, 03:12 AM
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I think some people here may call that a "doom and gloom" view of downloading but ... anyway ... I'm not sure what you exactly mean by "foreseeable future," but if that means 10 years, then I totally agree. I imagine the downloads to become the norm in about 10 years. If you mean way beyond that, then I strongly disagree. Here are my thoughts on a point by point basis.

1. They are fragmented, but I imagine that they will all carry most of the movies from the top studios in the near future (like within 10 years).

2. If piracy becomes "worse and worse" that means that there are going to be more and more downloading, meaning downloads are becoming the norm, not a niche.

3. It won't happen everywhere, but I can't imagine living in a top 20 USA metropolitan area without 60mpbs within 10 years.

4. I don't know what that has to do with downloads, so I'm going to skip this one.

5. I don't foresee people downloading 30GB movies. Maybe 10GB. And that quality will be acceptable by most everyone. At 10GB, 1TB = 100 movies. And in 10 years, we'll all have tens of terabytes (if not hundreds). People who care about the added PQ/AQ/extras (I imagine most of us HD Talkers) will buy the discs, but we're in the minority.

6. In terms of collection, yes, that is a big problem. Until SSD becomes much cheaper and more reliable (yes this is still an issue), people will not be collecting movies on a mass scale via download. I hope that when we have tens of terabytes in 10 years, it'll be either SSD or something even more reliable. If not, then this will definitely be the deal breaker.

7. I think this is a non-issue. Look at the iTunes store, for example. Over 4 billion songs have been purchased.
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Old 03-06-08, 01:44 PM
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Well, at least in SD I'd say that in less that 5 year VOD (Video on Demand) will be the norm.
Cable companies are having big profits from VOD, and satellite is coming to VOD too. It's just too easy, if you want to watch a movie, just browse some menus and you are in. You don't have to leave your home.
I've personally used Comcast VOD for renting movies and Xbox Live and both of them are really good. I prefer Xbox Live quality for HD movies but with Comcast you have the movie in the moment. Still, I have a very good internet connection and downloading movies through Xbox Live is really fast for me. It just take a couple of minutes for me to start watching the movie.
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Old 03-06-08, 02:13 PM
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my thoughts, as briefly as i can state them:

-- i think in the "near-term" (next 10-15 years), download/VOD could easily become the primary way people rent (SD) movies. netflix is already positioning itself to get in on a piece of that pie.

-- i think downloads have the potential to overtake physical media in the long-term (15+ years from now) as the primary way to own movies, but only if the CEs agree on some kind of technology standard and procurement service. the technology must be able to address the concerns raised in this thread, among others, such as collection backups, protection against piracy without handcuffing the honest consumer, etc. personally, i think it's a long shot.
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Old 03-06-08, 02:41 PM
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Downloading will eventually play a bigger role....for the rental market. But not to own. People like to buy stuff, physical stuff. That's not going to change.

Best Buy, Walmart, Target, and every other retailer will continue to want to use movie media as loss leaders to get us in their stores.

I do like the idea someone had mentioned before about having a system that lets you upload your own store bought movies onto a home server and then be able to browse and watch that way. That would be cool. Then your back up is your physical disc.

Last edited by Mr. Cinema; 03-06-08 at 02:43 PM.
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Old 03-06-08, 02:50 PM
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Click the below link for my downloaded movie collection!

Eh. Doesn't have the same impact as owning the physical media does.

OP hit in spot on. But I do think that it will be the wave of the rental market in the future. It will just never replace physical media for ownership.
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Old 03-06-08, 03:25 PM
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I think VOD will supplant the rental market within a five-year window. Convenient and profitable.

I think that it will supplant physical media at a slower rate, around 15 years from now. What is ownership? If you can click on an icon and launch the movie, what is the difference? If you are "all about the movie" like a lot of people say, then owning a library of discs should be no more attractive than "owning" an icon on the screen. Both are methods to watch a film.

I think quality will get better over the next few years, and IMO the convenience is already there.

I like having my collection, but the idea of not having to get up and go through the rigmarole of getting a disc ready is somewhat appealing to me.
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Old 03-06-08, 03:29 PM
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Originally Posted by Qui Gon Jim
I think that it will supplant physical media at a slower rate, around 15 years from now. What is ownership? If you can click on an icon and launch the movie, what is the difference?
well one difference is that you can watch the same movie on a physical medium on any player in your house or at a friend's house, etc. that's another thing the technology would need to address. you'd have to be able to stream any movie in one set-top box to another set-top box connected to a different TV in the same house, at the very least, for it to mirror the capabilities of physical media.
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Old 03-06-08, 04:31 PM
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It still boggles my mind how people here don't get that the average person has one goal in mind: watching a movie. They will use whatever method completes this goal in the easiest way possible.

This whole thing about owning a movie collection is a collector mentality and has nothing to do with what the dominant future business model may or may not be.
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Old 03-06-08, 04:43 PM
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Originally Posted by Tracer Bullet
It still boggles my mind how people here don't get that the average person has one goal in mind: watching a movie. They will use whatever method completes this goal in the easiest way possible.

This whole thing about owning a movie collection is a collector mentality and has nothing to do with what the dominant future business model may or may not be.
I agree. I could post my DVD collection here and there would be many that would think "amateur" in their heads, but I can tell you that most people that come to our home are blown away by the size of our collection and don't understand why we have it.

I am a collector. I like to collect things. MOST people are not and don't understand people who are.

These are the people that will drive VOD forward.

Also, since this will be the defacto place to discuss this topic, can a mod change the title to reflect that this is a discussion and not a manifesto?
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Old 03-06-08, 05:09 PM
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The popularity of gift sets and special cases like steelbooks tells me there will be a place for physical media. If all people cared about was the movie, these kinds of things wouldn't sell well enough for them to keep getting made.

I'm not sure the lack of anonymity will be much of a deterrent for many. Surely NetFlix has a record of everything you've rented and/or watched instantly. People don't mind because they like the service, and it will be the same way with VOD. Then there are the online retailers like Amazon that track your purchasing history, but I suppose if you vary between different stores, they can't get too much of a profile on you.
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Old 03-06-08, 05:15 PM
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Originally Posted by Drexl
The popularity of gift sets and special cases like steelbooks tells me there will be a place for physical media.
Yes, among collectors. I doubt if you asked 100 random people on the street what a steelbook was that they would be able to tell you.
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Old 03-06-08, 05:29 PM
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Originally Posted by jiggawhat
1) Fragmented solutions - There are too many competing for the same small pie. You have Itunes, Vudu, Netflix, Vongo, Amazon, Real.com, the defunct Movielink, etc. More and more services are trying to follow the apple model (Itunes + IPOD) by creating a great device to go along with their service, but none have succeeded. This is also going to be a problem as well because someone is not going to buy 3 or 4 set top boxes to get the various movies that are on the services when they can go out and get a dvd/hd player that has all the movies that they could want.

3) Infrastructure is not there. Let's face it, even with the fastest connections, it takes forever. By no means is it slow, but until we can get up to japan type speeds (60Mbits/sec) nothing is going to happen. Also, the fact that many rural areas still don't have high speed access is telling and probably won't get high speed for a while.
I think these are the two most important. Also, the U.S. market for high-speed broadband is only going to get worse as the ISP's either throttle or meter our bandwith, making downloading large movie files either impossible or prohibitively expense.

There is also the factor of the mindset of the average Joe. The tech-savvy don't realize that downloading isn't even on the radar of most people. Also, the number of house holds that have a connection between their television and the internet is a minority and without that, downloading will remain a niche market, limited to those of us willing to go through the hassle of setting that up.

Devices like the Apple TV may change this but most of these solutions are still closed loops. What's need is a single box that can suck up all types of media invisibly and making watching downloaded contact identical to just watching television. So far no such solution exists.
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Old 03-06-08, 07:28 PM
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Originally Posted by Mr. Cinema
Downloading will eventually play a bigger role....for the rental market. But not to own. People like to buy stuff, physical stuff. That's not going to change.
Spot on.

People that like to buy movies/TV shows/music on a physical media format will still buy on a physical media format. People that rent and use a service like Netflix might start using new, different services in the future, but I don't see why physical format buyers have to stop buying.

I just went "Blu" two weeks ago, and unless it goes the way of Beta; I'll keep supporting the format. I still support the DVD format, and will continue to do so.


Originally Posted by Qui Gon Jim
What is ownership? If you can click on an icon and launch the movie, what is the difference? If you are "all about the movie" like a lot of people say, then owning a library of discs should be no more attractive than "owning" an icon on the screen. Both are methods to watch a film.
What?

Owning the film, TV show on a physical format will be the same as clicking on an icon? If you're really "all about the movie", you'd be buying in best possible way (which would be best A/V quality). "Owning" an icon is not even close to owning the actual movie on a physical medium.

Originally Posted by Qui Gon Jim
I think quality will get better over the next few years, and IMO the convenience is already there.
It still won't be as good as a physical format for a long, long time.

Last edited by nateman; 03-07-08 at 07:28 PM.
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Old 03-07-08, 12:24 AM
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Originally Posted by namja
I think some people here may call that a "doom and gloom" view of downloading but ... anyway ... I'm not sure what you exactly mean by "foreseeable future," but if that means 10 years, then I totally agree. I imagine the downloads to become the norm in about 10 years. If you mean way beyond that, then I strongly disagree. Here are my thoughts on a point by point basis.

1. They are fragmented, but I imagine that they will all carry most of the movies from the top studios in the near future (like within 10 years).

2. If piracy becomes "worse and worse" that means that there are going to be more and more downloading, meaning downloads are becoming the norm, not a niche.

3. It won't happen everywhere, but I can't imagine living in a top 20 USA metropolitan area without 60mpbs within 10 years.

4. I don't know what that has to do with downloads, so I'm going to skip this one.

5. I don't foresee people downloading 30GB movies. Maybe 10GB. And that quality will be acceptable by most everyone. At 10GB, 1TB = 100 movies. And in 10 years, we'll all have tens of terabytes (if not hundreds). People who care about the added PQ/AQ/extras (I imagine most of us HD Talkers) will buy the discs, but we're in the minority.

6. In terms of collection, yes, that is a big problem. Until SSD becomes much cheaper and more reliable (yes this is still an issue), people will not be collecting movies on a mass scale via download. I hope that when we have tens of terabytes in 10 years, it'll be either SSD or something even more reliable. If not, then this will definitely be the deal breaker.

7. I think this is a non-issue. Look at the iTunes store, for example. Over 4 billion songs have been purchased.
It's so funny when I was writing the subject of the article I had noted a 10-15 year time frame then changed it to the foreseeable future.

Would you agree that there is probably a lot less objectionable content for music compared with video? So what happens, when your wife sees that you downloaded the latest Debbie does Dallas because that's only available for download. That's just an example but you can see where I'm going with that.


I just don't see disc based media dying and downloads replacing it as it's been forecast for so long. Look at Best Buy, they still sell a ton of CDs. It's not like CDs are going anywhere anytime soon and I see the same happening with BD/DVD. Plus retailers want to be able to sell and the studios will provide it for them.
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Old 03-07-08, 12:25 AM
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I pretty much agree with it all except for #7. I don't understand why anyone would care if what movies you downloaded are monitored. It's not like your pulling down kiddie porn. I picture these same people at Blockbuster with their rental of choice clutched close to their body as they look around with shifty eyes to make sure no one sees what they are renting when they get to the checkout counter.
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Old 03-07-08, 12:30 AM
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Honestly, I'd be shocked if Blockbuster/Hollywood Video is still around in 5-8 years in their current "form".
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Old 03-07-08, 12:41 AM
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Originally Posted by Qui Gon Jim
Yes, among collectors. I doubt if you asked 100 random people on the street what a steelbook was that they would be able to tell you.
Sure, but I meant there will still be a place for it even if it's not the major way to get movies. For physical media to just go away, people would have to only care about the data, and I think the success of special packaging shows that at least some of them care about more than that.

As for Jiggawhat's Debbie Does Dallas example, that's what alternate services with separate passwords are for.
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Old 03-07-08, 01:56 AM
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Originally Posted by jiggawhat
Any comments or criticism are welcome.
1.Agree. In order for VOD to be a mass, successful form of media distribution there needs to be a centralized system capable of handling supply and demand. Current trends reveal that the market is heading in a different direction: decentralization with multiple providers aiming for exclusivity (look for this week’s exclusivity announcement between IFC Films and Blockbuster for physical and online content)*. If you are all about the movies and are forced to consider multiple content providers in order to have access to ALL products distributed on the market then VOD will be an improbable sell.

2.Strongly agree. One of the main reasons why I believe VOD will never entice the studios to view it as a viable substitute for physical media.

3.Agree. For VOD to replace the current rental and distribution system in place there needs to be an enormous update of the existing infrastructure. Such a project will be a bottomless pit with few, if any, investors willing to act on promises (only). AOL’s recent troubles are a great indicator why any such endeavor would be impossible to sell.

4.Strongly agree. Put aside the war we underwent the studios have proven time and time again that they like to be “traditionalists”. From distribution to pricing to promotion they have followed a system which has a proven record of delivering the results all of them are looking for. Adding the country’s serious economic problems I believe that it is very unlikely that the same studios would favor a new model where VOD will replace existing revenue providers. Finally, there is no precedent in any other mass (consumer) market where online distribution has proven more profitable and capable of sustaining an industry on its own – from books to magazines to music – online sales have not taken over hard/physical content.

5.Somewhat Disagree/Agree. 10 years is more than likely enough for the introduction of a proper device with enough memory to address storage concerns. It is unlikely that such however will be either affordable and/or available on the North American market. Smaller and more technologically advanced markets (Japan) could be a good testing zone but I foresee content availability within such experimental markets as a barrier for enticing manufacturers to heavily bet on it (example: online gaming has been a hit and miss for competitors with exclusivity still being a decisive factor).

6.Strongly agree. There is a reason why people continue to develop pictures and require hard copies even though nowadays there are numerous ways of storing such as digital files, ect. Neither flexibility nor convenience have proven to be key factors, both of which are touted as the strongest points for a mass VOD euphoria.

7.Somewhat agree. This could be an issue only if VOD becomes mainstream. So, I don’t foresee such a scenario not only in a near future but in a foreseeable future as well given the aforementioned trend(s) towards decentralized exclusivity. If the adult industry adopts a similar approach and shifts its business as online-only (not likely) then chances are there will be proper mechanisms to offset any issues that may or may not arise. But that brings us back to point A: having current adult content through your existing cable provider which is neither affordable nor expansive enough to replace physical demand, in effect sustaining both physical rentals as well as “traditional” buys.

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*
IFC Entertainment and BLOCKBUSTER Sign Two-Year Exclusive Rental Deal -- BLOCKBUSTER to be Exclusive Rental Outlet for IFC Entertainment's Titles Through Stores, Mail and VOD Download

NEW YORK, March 5 /PRNewswire-FirstCall/ -- In a move designed to make independent films available to a wider audience, IFC Entertainment, a subsidiary of Rainbow Media Holdings LLC, and Blockbuster Inc. (NYSE: BBI)(NYSE: BBI.B) today announced a two-year agreement that gives BLOCKBUSTER® the exclusive U.S. rental rights for IFC Entertainment's titles. The agreement enables IFC Entertainment to reach a broader audience for its films through Blockbuster's stores, by-mail subscription services and digital downloading service, Movielink.com.

Under the terms of the agreement, IFC and Blockbuster will share rental revenues from IFC titles. Blockbuster will have an exclusive 60-day rental window, including both the physical and digital rental distribution channels, for each title as it becomes available. During this period no title will be available on a retail basis in any format. After the 60-day period, the IFC titles will be available on a non-exclusive basis both for retail and digital distribution. However, Blockbuster will retain the exclusive physical rental distribution rights for IFC titles for three years after each street date.

In addition to carrying IFC titles in its stores nationwide, Blockbuster has installed special independent film sections in approximately 1,000 of its locations, which will include not only IFC titles but also independent movies from a variety of distributors. Blockbuster also plans to highlight IFC titles on blockbuster.com and on Movielink.

"We're delighted to join with BLOCKBUSTER as we continue our mission of making independent film available to the widest possible audience," said Lisa Schwartz, IFC's senior vice president of sales and business development. "Blockbuster's national store network combined with its by-mail and downloading services, made this a particularly appealing agreement for us because it gives millions of customers increased access to our movies."

"This agreement with IFC is a great opportunity for BLOCKBUSTER to provide our customers with convenient access to the best of independent film," said Keith Leopard, director, film product, Blockbuster Inc. "Whether it's through our stores, through the mail or through digital downloading, our customers will have access to some of the most exciting, thought-provoking films the indie filmmaking world has to offer. We look forward to working with IFC to dramatically expand our selection of independent titles and to being the exclusive rental outlet for films that otherwise might not have gotten exposure to such a broad audience."

Titles to be exclusively available for rental at BLOCKBUSTER include: Gus Van Sant's Paranoid Park, which opens theatrically on Friday, March 7th and was recently nominated for three Independent Spirit Awards including best picture and best director and won the Piaget Producers Award, which went to producer Neil Kopp; Tom Kalin's Savage Grace, which stars Julianne Moore and was screened at this year's Sundance Film Festival; Hannah Takes the Stairs, a critically-acclaimed film by Joe Swanberg that emerged as part of the Mumblecore movement; and Dans Paris, a French language film directed by Christophe Honore.

Genius Products, Inc. (OTC: GNPI) (BULLETIN BOARD: GNPI) , a leading independent home-entertainment distribution company, serves as the sales agent for IFC Entertainment.

ABOUT IFC ENTERTAINMENT

IFC Entertainment consists of IFC Films, a leading theatrical film distribution company bringing the best of independent films to theaters and to the on-demand platform, day and date, reaching over 45 million subscribers. The company's brick and mortar home, The IFC Center, features state-of-the-art cinemas with luxurious seating and high-definition digital and 35mm projection, located in the heart of New York City's West Village. Recent and upcoming IFC releases include: 2007 Palme d'Or winner 4 Months, 3 Weeks And 2 Days, which also received a Golden Globe nomination for Best Foreign Film; Gus Van Sant's award-winning Paranoid Park; Harmony Korine's Mister Lonley; Hou Hsiao Hsien's Flight of the Red Balloon starring Juliette Binoche; and Catherine Breillat's The Last Mistress starring Asia Argento. Other critically acclaimed films include Patrice Lecontes's My Best Friend, Susanne Bier's academy award nominated After the Wedding and Ken Loach's 2006 Palme d'Or winner The Wind that Shakes the Barley.

About Rainbow Media Holdings LLC

Rainbow Media Holdings LLC is a subsidiary of Cablevision Systems Corporation (NYSE: CVC). Rainbow Media is a leading producer of targeted, multi-platform content for global distribution, creating and managing some of the world's most compelling and dynamic entertainment brands, including AMC, IFC, WE tv, and VOOM HD Networks. Through its IFC Entertainment division, Rainbow Media also owns and manages the following: IFC Films, a theatrical feature film distribution company; IFC First Take/IFC in Theaters, a day and date theatrical feature film/VOD initiative; the IFC Center in New York City; IFC Productions, a feature film production company; and IFC Entertainment, which owns and operates a film library. Rainbow Media also operates Rainbow Advertising Sales Corporation, its advertising sales division, and Rainbow Network Communications, its full service network programming origination and distribution company.

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Old 03-07-08, 03:59 AM
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What if the user can download a movie to buy and burn the movie into a physical media? Will this business model work?

From http://www.dvdcca.org/:
Retailers and Consumers to be Able to Create Protected DVDs that Work with Existing DVD Players.
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Old 03-07-08, 04:09 AM
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Originally Posted by hanami
What if the user can download a movie to buy and burn the movie into a physical media? Will this business model work?

From http://www.dvdcca.org/:
Retailers and Consumers to be Able to Create Protected DVDs that Work with Existing DVD Players.
Now, that's something I don't really care for because the reliability of burned media is suspect compared to pressed media. It would be interesting though, if you could get a product with custom cover art for the same price as the mass-produced version. The way it is now, you're paying for the standard cover art and you have to pay again (printer, ink, paper) if you want a custom cover.
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Old 03-07-08, 04:15 AM
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Originally Posted by Drexl
Now, that's something I don't really care for because the reliability of burned media is suspect compared to pressed media.

End of story!

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