Xbox Video Marketplace - Success

Movie and TV downloads so far have been a luke warm way of buying video media... Retailers like Amazon.com sell fewer than 100 downloads a day. This is in line with sales numbers seen by other online video download services. The thing that keeps these services from mass market acceptances is complexity. You have to download the video to your computer then burn it to DVD, and it has to be the correct flavor of ‘R’ for your DVD player to read it. Much like the BluRay and HD-DVD formats, writable DVD’s also have two different camps, DVD+R and DVD-R with manufacturers of players on one side or the other with a few companies that make players read both. Your DVD recorder in your PC also has to match the R flavor of your DVD player. All this is proving to be way to complex for Joe Average Consumer.

Microsoft has come to the rescue with the only click of a button digital distribution solution for video on the Xbox360. Even with a market many times smaller than the PC download market, Microsoft is seeing downloads better than what Amazon and the competition are currently seeing.

The secret is in the ease of use. All you need to do is pay your money (points) and click download. Some amount of time later, the Xbox 360 tells you that your video has downloaded and ready for viewing. One other thing that sets the Microsoft solution apart from the competition is high definition content. While only Warner Brothers currently offers their movies in both standard and high definition, they are seeing much more demand for the high definition versions. This will no doubt encourage other studios to also make high definition versions available.

The Top 5 list of movies for Xbox Video Marketplace are Mission Impossible 3, Nacho Libre, V for Vendetta, Poseidon and Swordfish, three were the high definition versions. For TV show downloads it was South Park, Enterprise, UFC, Chappelle’s Show and Jericho, again three of the top five were high definition.

Right now Microsoft seems to be standing on their own with an easy of use solution. There is competition on the way though. Sony Pictures will be releasing movie downloads for the Playstation 3. Whether or not Sony can entice other movie studio’s to offer their video content for Playstation 3 remains to be seen. It’s doubtful that we’ll see any Sony Pictures movies on the Xbox 360 however. Also Apple will release their iTV product early this year (Feb 07). With iTV you will be able to purchase video content on iTunes and stream it to your TV. iTunes however is a purchase outright service, not a rental service for movie content like Microsoft. Also other than Disney and Pixar which Steve Jobs is the majority shareholder in, it’s unclear if any other studios will embrace the Apple solution because of the iTunes pricing structure. Much like Sony Pictures, we probably won’t see any Pixar of Disney movies on Xbox Video Marketplace anytime soon either.

One thing is for sure, digital distribution is here to stay. In probably 5 years we’ll be downloading everything, TV Broadcasts, Movies and other similar video content and Video Games. What we’re going through right now are the testing phases of something bigger that will shape the future of how we get things.

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