Amazon & iTunes drop digital download prices. Still cost too much
By Ben Drawbaugh 
posted Sep 1st 2009 10:26AM
posted Sep 1st 2009 10:26AM
Apparently the two biggest providers of digital downloads are getting more aggressive with the pricing, but both are still far from enticing us. Obviously we're not the only ones not buying these overpriced, over-compressed videos, and for good reason. Part of the reason that this isn't enough is because we believe that the perceived value of digital delivery is actually less than packaged media. Not only do you not get something tangible to own, but also because you can't resale it and in general, there are less freedoms. But price isn't the only factor, as typically early adopters who'd be the first to jump on this wagon are also usually interested in quality. Which is only one of the reasons why Blu-ray is generating more revenue for Hollywood, instead of being killed by digital distribution. So in other words, consumers won't be willing to give up packaged media until digital downloads can deliver the same quality, value, features and selection. So yeah, a long, long time -- read as, not in the next two years.
@ $4.99 to watch one time within 24 hours downloads are MUCH more expensive than Blockbuster.
from Blockbuster you can get a blu-ray for $3.49 over night that can be watched multiple times from multiple devices and $1.00 per each additional day or you can get unlimited viewing on multiple devices for 3 days @ $4.99...
downloads need to be cheaper, not more expensive & they need to be more flexible in terms like unlimited viewing for say 3 days [72 hours from download completion] @ $4.99 on multiple devices
I use Blockbuster Online. For $16 per month I can usually watch 10-12 BDs.
And don't forget new release HD rentals on Xbox are more like 6 bucks (although you don't immediately realize it with the funny-money "points" racket they have going).
I have both an Xbox 360 and an Apple TV. I've rented less than 5 movies total on both systems over the last year. Yet I've watched a boatload of Blu-rays from Netflix (and an equal amount of DVD's) during the same time period.
Obviously convenience isn't everything because I have two convenient digital delivery systems at my fingertips and I just don't use them.
Netflix streaming I do sometimes use. And it seems to be the only digital model that is actually successful. But what good is this great experience if all there is to watch it 3rd rate catalog titles, documentaries and the occasional Starz feature (that will vanish in 3 months)? The fact is that at their current pricing structure ($10/month) Netflix is going to have a really hard time getting studios to license their content to them. No studio is going to take pennies on the dollars they are making now.
You hit the nail on the head. It's not worth it to download a crappy quality version of a movie for this price when I can't do the same things with it that I can do with a physical media, adding to that that I have to pay the storage media cost. The other bottleneck to adoption of downloading movies is the bandwidth needed to get a quality 1080p encode it much more then most consumer connections can handle in a reasonable time, and with the rate at which they have been advancing, it's likely to be longer then two years before we see something worth while (by my quick math, until 30Mbps real-world performance connections become prevalent, we're not going to see much mainstream success here).
100% agree. And to further the point, with cable companies throttling the amount of Internet a household can use per month, viewing Blu Ray quality movies through the Internet becomes even less of a reality.
until then, I will stick with NetFlix. Great stock of Blu Rays and I always get what I want to see. No complaints.
Netflix is WAY cheaper in the long run. The idea that anyone would spend a significant amount of money on these movie digital distribution services is crazy. Used blu-ray copies are cheaper than what Amazon and iTunes are asking for! And I get better quality, can sell it, can rip it, can put it on multiple devices, etc...
If anything, I'm waiting to see what Blu-ray "managed copy" will do to the market. If I could pay $2 to store a copy on my hard drive legally and play it from there, that'd be great.
All valid points. I agree with the posts before. Yeah, there is a convenience factor, but if the picture isn't crisp & clear, that's not exactly a convenience then. As far as "mainstream adaptation" pricing should go, I think new release blu-rays should cost $19.99, dvd's $14.99 & digital downloads $9.99. Older releases should be $5.00 less.. thus, blu-rays $14.99, dvd's $9.99 & digital downloads $4.99. Digital rentals should all be in high resolution (assuming we have the internet performance for them) & they should cost no more than $1.99 for new releases and $0.99 for older movies. If the prices are any higher, people will just pick Netflix or go to the closet Redbox (Blu-Box in the future for blu-rays). Just my opinion.
Ah the same thoughtless, anti-digital-distribution arguments. So sad.
"I can't resell my digital media!" -- Why would you want to? Who would buy yours? Digital media is not physical media; with physical media, if I decide to buy a used copy, I'm paying less but also getting a copy that may not be in brand-new condition. With digital media, there is NO DIFFERENCE between a new copy and a used copy. You can't trade on the "scarcity" of digital content, because digital isn't scarce at all; it is the opposite of scarce--anyone who wants a copy of a piece of digital content can get one EASILY. You can offer your copy at a lower price than the original, but what would be the point? The fundamental concept of a marketplace where items are bought and sold depends on there being a finite amount of those items. When there is an infinite number of items (as with digital content) there's no point "buying" and "selling" those items.
People complain that they want to resell their digital content because, despite their protestations that they want to "OWN" their "CONTENT", they don't actually want to be COMMITTED to it. They want the option of dumping it later on. In effect, they want FEEL like they permanently own that thing, but only want to pay a lower amount for TEMPORARY ownership.
How is that accomplished with digital content? Through a subscription service that charges for access to the content, not for the content itself. Zune Pass is a good example for music. You download content, so you feel like you own it, but you pay a low monthly fee so you aren't COMMITTED to what you download. If you do decide to commit, the permanent purchase option is available.
"But I want to loan a copy to my friend!" -- Again, that's based on the idea that there are a finite number of copies. When copies are infinite and abundant, ideas such as "lending" necessarily must change. You wouldn't "loan" someone access to a website; you'd tell him to access it himself.
"But I want to own something tangible!" -- No you don't. You think you do, but you really don't. What you REALLY want is unfettered access to the CONTENT. It's just that historically, "unfettered access to the content" was only available by purchasing a physical item on which the content was delivered, so people naturally linked the content to the media it came on. In other words, owning the media = owning the content, and some people (ie. the luddites who want to OWN something TANGIBLE) simply can't handle it when that equation breaks down. Look at FlexPlay discs or the late DIVX discs... they delivered something TANGIBLE for you to OWN, and yet no-one bought in to them because that TANGIBLE item didn't deliver unfettered access to the content.
Digital downloads deliver unfettered access to the content. If you buy a digital download movie, you will have unlimited access to it. If you subscribe to a digital download service, you will have unlimited access to it as long as you keep your subscription current.
"But what if my hard drive crashes!? I'll lose all the things I bought!!!" -- You should keep backups then. Many digital download stores also maintain a history of the things you've purchased and will allow you to re-download them for free. What happens if your house burns down? How easy will it be to replace your Blu-ray library? As easy as clicking "re-download all"?
"But I want the highest quality!" -- Well excuse me Mister Quality Snob, but you are in the minority. Most people are quite happy with "good enough" quality. DVD continues to destroy Blu-ray in sales. Ringtones continue to be huge sellers for the labels. iTunes and BitTorrent killed SACD. The combination of Convenience and Good Enough has ALWAYS trumped Inconvenient and High Quality. It's just human nature.
"But Internet connections aren't fast enough yet." -- A temporary problem. That's like me arguing "no-one has HDTV sets yet!"
"But I want to play my media everywhere!" -- This is perhaps the only real stumbling block preventing digital movie download services from really taking off. There are too many competing formats championed by competing services and competing devices, and none of them work with each other. The music sellers have solved that problem by standardizing on MP3, and it will take a similar standardization in the movie space before it will take off. That has already happened; it's just that the standard--WMV--is having a lot of difficulty gaining traction, largely because of Apple. Sooner rather than later, there is going to be a shake-out, and a popular standard will emerge (whether it's WMV or MP4 or even Divx or something else entirely), and then it'll be off to the races. But it's not a matter of "if", it's a matter of "how long." As in, how long does Blu-ray have before it is killed by digital downloads?
You're a douche bag! You're exactly the problem. But we can fix that problem... just get rid of the "problem"! :) Who's with me?
I don't think that Ben is in the minority and is not a "quality" snob. He prefers his movies to be in the highest quality available, and he is NOT in the minority. I've seen downloads, a few at 1080p (including some broadcast on Dish) and they are full of compression artifacts, the statement these companies make "equal to Blu-ray quality" is total BS. Where's the lossless audio as well? No thanks, I am in for the longhaul with physical media.
Oh and I forgot to mention what you said about "what if I Lose my drive contents", you ask "what if the house burns down," that was a realy bad statement because anyone who has invested in Blu-ray probably has good equipment and INSURANCE! All items can be replaced.
Completely agree UnnDunn.
That standard might actually be DivX again because all major studios have signed up to offer movies in DIVx. I personally would like a container for movies that would in specs support lossless sound. It seems that Microsoft is pushing a lot of resources behind their solutions, Silverlight and so on for live streaming at a high quality. As broadband speeds increase users will continue getting higher quality with zero expense because such is the nature of digital downloads.
I've personally done comparison between my ripped movies from Blu-ray I own where i re-encode the movies into DTS 1.5mbps and h264 with average bitrate of 18-20mbps and the quality loss is imperceptible. I've taken a frame of full uncompressed Blu-ray version and exact same frame of re-encoded version. Zero difference and instead of 30-40gb movie I get movies at 10gb or less. And I'm using open source tools. I can't even imagine what quality can be achieve by fine tuning quality with professional tools. I think that what Ben Waggoner from Microsoft digital video and encoding dept. meant when he mentioned on AVS Forums that for pretty amazing 1080p quality we really only need about 10mbps bitrate.
DTS 1.5mbps also seems to be indistuingishable from DTS-MA or TrueHD even on high end speakers and perfect listening conditions in blind tests at a much lower file size and bitrate.
Interesting article where they tested lower bitrate DD/DTS vs DTS-MA/TrueHD vs PCM Uncompressed in perfect conditions at DTS and Dolby Digital labs: http://www.hemagazine.com/node/Dolby_TrueHD_DTS-MA_versus_Uncompressed_PCM
The point here is that it seems that there is a ceiling in perceivable quality in regards to bitrates and HD audio vs uncompressed. Seems that even lossy can be indistinguishable from uncompressed due to very mature DTS/DD+ optimizations. They do say 448/640/768 kbps did sound a bit softer and could be sensed but using DD+ or DTS 1.5mbps was simply unnoticeable.
The reason why I mention this is because it seems to be a huge selling point with enthusiasts where there's very little or zero benefit of having ginormous files with high bitrate footage or uncompressed in terms of audio at least.
This is all good news and really shows us that digital download future is much brighter and more accessible than what some people think and demand quality.
mntwister:
If you care about "lossless audio" and "1080p" and "compression artifacts" then guess what? You're a Quality Snob. The average consumer couldn't care less about those things, as long as the movie presentation is Good Enough.
But even so, digital download services continue to close the quality gap with Blu-ray, year by year. Take Vudu. It's HDX movies are within spitting distance of Blu-ray quality. If you put a Vudu HDX and a Blu-ray of the same movie side by side, I bet you wouldn't be able to tell them apart, even in all your Quality Snobbery.
And yes, most people have homeowners insurance so if their house burns down they are reimbursed. But you still have to schlep to the store and buy all of your blu-ray discs again, whereas I just click "Download All" and my library is restored. And just as you have homeowners insurance to protect your home and its contents, you should also make backups to protect the contents of your computer. That's what makes the "but what if my hard drive dies" argument silly.
"When there is an infinite number of items (as with digital content) there's no point "buying" and "selling" those items."
I like how your argument in favor of DL's includes a sentence basically writing off the entire market.
I like that you bring up the Zune Pass, then in the very next paragraph dismiss digital lending, something that is a cornerstone of the Zune Social experience.
"As in, how long does Blu-ray have before it is killed by digital downloads?"
10 years, easy. By which time 1080p will have been supplanted by 4k HD or another standard, and downloads will again be sub-par.
About "losing" digital vs physical media: catastrophic media loss of physical media is much more rare than the loss of digital media. I have not known a single person who's house has burned down causing them to lose all their media, however I've known plenty of people who've had catastrophic computer failures causing them to lose their media.
Additionally, being beholden to the "re-download" is sketchy at best. What if there is a licensing disagreement with your digital content vendor and the rights holder and when you attempt to re-download that content is unavailable? I've had that happen to me personally, on xbox live the way they justified the small HDD initially was that you would be able to delete and redownload any puchased content. Well I bought several episodes of a television show, deleted them when I needed room, eventually upgraded my HDD to 120gb went to re-download and those shows were no longer offered. I'm shit out of luck, I paid to "own" those episodes, deleted as advised and cannot recover them.
I think the issue is that when you purchase digital content the use of them is so much more restricted and volatile than that of media on a separate physical container. Because as is stated above, with the physical media there is equity and an established infrastructure for sharing. Both of those things create value, as it stands digitally distributed media has substantially less value than physically distributed media, and should be priced as such.
It's undeniable that digitally distributed media has the potential to eclipse the usefulness of physically distributed media, however all the content rights holders seem to be fighting this tooth an nail. Every system that seems to have the right model is equally handicapped by poor content selection, and worse infrastructure.
Additionally, being beholden to the "re-download" is sketchy at best.
Mr. Jez, please don't confuse the poor fanboys with inconvenient facts. After all, they have an important agenda to uphold and they have to avoid off-message diversions into messy reality.
This magical new world of living in the Cloud is going to be all unicorns and rainbows, didn't you know? All media ever produced will be available 24/7/365, infinitely re-downloadable with no DRM and for only a dollar a month! :-P
Very good point Ben about not being able to re-sell these movies. It is nice to be able to take a Blu-ray or DVD and sell it as used when a person does not want it anymore, and I also agree with you about the quality issue. I think it will be a long time before we will be able to download a 1080p movie with lossless audio, extras and commentary, and even then, 1080p isn't the same for every format..I would assume the compression of the upcoming 1080p downloads will be much higher than on a Blu-ray disc. I will stick faithfully to Blu-ray, there is no better way to watch a movie.
The other problem is storage. Say we download a movie, what happens if the drive we store it on fails? We will need to make back-up copies of everything we own. I recently had a hard drive fail that was full of HD movies from Dish Network (they allow the use of external hard drives, as many as you want). I could not get the contents back, so there goes 96 HD movies in one shot. With a physical disc, I can pull it off my self anytime, see the artwork and read the contents of the disc and the specs, and it will be there whenever I need it. Sure it takes more space because I have a full wall of movies, but as I said before they are there and will not be lost should a storage drive fail, and I can sell them if I wish. Too many advantages for physical disc.
Completely agree UnnDunn.
That standard might actually be DivX again because all major studios have signed up to offer movies in DIVx. I personally would like a container for movies that would in specs support lossless sound just for the sake of enthusiasts. It seems that Microsoft is pushing a lot of resources behind their solutions, Silverlight and so on for live streaming at a high quality. As broadband speeds increase users will continue getting higher quality with zero expense because such is the nature of digital downloads.
I've personally done comparison between my ripped movies from Blu-ray I own where i re-encode the movies into DTS 1.5mbps and h264 with average bitrate of 18-20mbps and the quality loss is imperceptible. I've taken a frame of full uncompressed Blu-ray version and exact same frame of re-encoded version. Zero difference and instead of 30-40gb movie I get movies at 10gb or less. And I'm using open source tools. I can't even imagine what quality can be achieved by fine tuning quality with professional tools. I think that what Ben Waggoner from Microsoft digital video and encoding dept. meant when he mentioned on AVS Forums that for pretty amazing 1080p quality we really only need about 10mbps bitrate.
DTS 1.5mbps also seems to be indistuingishable from DTS-MA or TrueHD even on high end speakers and perfect listening conditions in blind tests at a much lower file size and bitrate.
Interesting article where they tested lower bitrate DD/DTS vs DTS-MA/TrueHD vs PCM Uncompressed in perfect conditions at DTS and Dolby Digital labs: http://www.hemagazine.com/node/Dolby_TrueHD_DTS-MA_versus_Uncompressed_PCM
The point here is that it seems that there is a ceiling in perceivable quality in regards to bitrates and HD audio vs uncompressed. Seems that even lossy can be indistinguishable from uncompressed due to very mature DTS/DD+ optimizations. They do say 448/640/768 kbps did sound a bit softer and could be sensed but using DD+ or DTS 1.5mbps was simply unnoticeable.
The reason why I mention this is because it seems to be a huge selling point with enthusiasts where there's very little or zero benefit of having ginormous files with high bitrate footage or uncompressed in terms of audio at least.
This is all good news and really shows us that digital download future is much brighter and more accessible than what some people think and demand quality.
damn database delay.. double post
Sorry man, but your theory is a bit flawed. Under the right situations, and each person has a different situation, it will be noticeable.
Just because it isn't for one does not mean its the same for all.
It's not a theory.. read the article .. the tests were conducted in isolated sound rooms at DTS and Dolby labs in blind tests. The reason some percieve it as placebo mostly and the fact that you want to KNOW you have something better. The fact that it won't sound any different is the point here.
And I know it's hard for people to come to peace with that because they've spent money on the latest stuff and similar and you just want to believe you didn't waste your money. I can definitely be sorted in that group as I spent a lot of money being on the bleeding edge.
What's interesting as well is from my own experience in looking for saving space on my NAS Media Device and optimizing my HD movies.. FLAC seems to be the best lossless audio codec around. It supports fully lossless audio at a fraction of the size.
This is also a huge advantage for file sizes. But unfortunately as UnDunn mentioned the biggest problem with digital downloads is not really quality per se, that will catch really fast, the problem is some kind of standardization, just like we had with MP3.
The collection factor is a huge deal for me, too when it comes to blu ray purchases, and I know I am not alone in this. I love having a huge shelf of movies and knowing each is perfect. Digital downloads just aren't as fun, because in order to show that shit off I have to open up a DD box, navigate to a menu, etc.
Also, why the fuck would I pay 20 bucks for a download when I can just get the same thing off bittorrent for free? Often with better quality too.
Why pay for content that'll take a long time to download since HD files are much bigger than normal files?
Also, iTunes video media are LOCKED due to copyright restrictions so why bother since you can't view it except through iTunes or Quicktime (for PC users)?
Go to your library and borrow the DVDs then rip the movies to whatever format or resolution you want before returning them (provided you have the proper software since most DVDs do have copyright protection in them).
Or, you could find them online, if available, then download them, mostly through torrents!
Lastly, this is good only to those that actually watch movies via their computer.
I'd rather watch it on a HD TV =:)
Anybody jump on Amazon's complete Battlestar Gallactica Season 1 in HD download for $5 a couple weeks back? If so, I need some help. I'd rather not watch them on my PC and don't have a Roku or Xbox. For that matter, my DSL speed sucks. So I downloaded each 2.5gb episode to my HDD. How can I view these on my HDTV? Since they have DRM it won't playback on my PS3. I also have direct wired Ethernet with my PC, but can't stream it with PlayOn or WMP11. Any creative engadget readers figure this one out yet? Thanks!
There are a "finite" number of douche-bags too! But we can fix this! For this posting alone, we have 2 douche-bags so far! Will there be a lucky #3??
You are a freakin' idiot. Educate yourself than call someone a douche bag.
Next you'll be telling us game downloads aren't going entirely to plan, either.
Which is not to say I don't buy games for digital download, just that I only buy them at budget prices. £1.49 for Ghost Master on Steam, for example, makes sense to me. £29.99 for Champions Online, £5 more than having Amazon deliver a boxed copy to my house, not so much.
Wow, there's a whole soap opera going on here in the comments.
Yes digital distribution is in its infancy. Yes, most people don't use it. Yes its too expensive. Yes the quality isn't as good as Blu-Ray.
But I'm doing it anyway. I watch "HD" movies on my Apple TV (I find the video quality adequate for most titles), and I watch some stuff via Amazon On Demand on a Tivo HD.
No, I don't BUY anything. I don't think it makes a lot of sense to "buy" a DRM'ed product. I never did it with music, I'm certainly not going to start with video. I just "rent" things. I don't care if they expire just after I finish watching them, I don't really want to watch most movies more than once anyway.
For me the convenience and "last minute" choice of digital downloads is a big deal. It better be because the content selection S-U-C-K-S compared to getting in the car and driving to the local video store. For me that's the killer problem, not the $3.99 or $4.99 movie rental prices.
The biggest hurdle for digital distribution is that Netflix has forever lowered the price people associate with movie rentals. Gone are the days when B&M stores could charge 4.99 and 5.99 for new release rentals and then make a bunch more money off of fees. Netflix blew that all out of the water. Once consumers get used to lower prices its very hard to convnince them that theypay the old prices again, especially if what you are offering is a less than stellar, inflexible, locked-down experience.
Netlfix's Watch Now service is an extension of the all you can eat plan which people have become accustomed to. I suspect that's the reason it is by far the most successful digital solution out there right now. Of course Watch Now has its own set of problems... really lame selection, low quality video (and even lower quality sound) but in my mind its the best of the breed right now. Its not competition for blu-ray. I see it more as a complement to it. For certain types of programming where the sound quality is not as important and there are numerous episodes (TV shows in particular) it makes total sense.