Food and gift basket sales increased 4.7%, but total e-commerce, which includes online and telephone orders, increased less than 1%.
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Some industry observers, however, contend the market already is changing faster than expected as movie content providers recognize the increasing popularity of online video along with new technology that makes downloading to computers and transferring content to TV screens easier and faster than ever before. And downloaded video also is starting to appear with more of the comprehensive list of features common in DVDs. Discovery Communications, for instance, recently re-launched its Discovery on Demand VOD service with expanded content including director’s cuts and behind-the-scenes content, Craig says.
Amazon Unbox already supports feature-film download times of mere minutes for users with broadband Internet access, and, with commonly available accessories, the downloaded films can be instantly transferred to a TV screen, says Roy Price, Amazon’s director of digital media who launched and manages Unbox. In fact, he says, the downloaded movies can be viewed on either a PC or TV screen within 2.5 to 5 minutes, depending on broadband speed, as the film continues to download from the Internet.
“We already offer movies from most major studios and at least one TV show from each of the major U.S. broadcast networks,” says Price, whom Amazon recruited from The Walt Disney Co. two years ago to design and launch Unbox. “‘X-Men,’ ‘Fast and Furious,’ ‘Garfield’ and ‘Click’ all are recent movies we have made available for download at the same time they were released on DVD.”
Instant Media launched in beta mode early this year, offering downloads of free web video content, such as online recordings of NBC TV’s “Meet the Press,” on its Internet TV media player, which can be downloaded for free from IM.com. It has since attracted about 600,000 users, says CEO Andy Leak.
With an established user base, Instant Media, also known as I’M, last month started offering premium content for a price. It signed a deal with Universal Studios Home Entertainment to provide for the downloading over the web of recent Universal DVD releases, including the movies “United 93,” “Inside Man” and the “The Break-Up.” I’M will also provide through video on demand downloads older films such as “American Pie,” “Erin Brockovich” and “Field of Dreams.”
“We’re plugging into the development of a megatrend toward consumer choice. By making the PC the core of their entertainment lifestyle, it opens consumers up to a broad spectrum of opportunities they don’t have with cable or broadcast TV,” Leak contends.
Instant Media provides a free I’M media player that can be downloaded from IM.com. The media player is designed to cache downloaded video to a computer hard drive, enabling users to play back purchased content whenever they choose. Users can log onto their account on the web from any computer and arrange to have video content automatically downloaded to their home computer equipped with the I’M media player. If the home computer were disconnected from the Internet at the time of the scheduled download, the downloading would commence once the computer is reconnected to the web.
When Apple Computer introduced iTunes 7 in September, it expanded the popular digital music store to now offer downloads of more than 75 movies from four major studios: Disney, Pixar, Touchstone and Miramax. “Here we go again-first music, then TV shows and now movies,” Apple CEO Steve Jobs said when the company launched its video service. “In less than a year we’ve grown from offering just five TV shows to offering over 220 TV shows, and we hope to do the same with movies.” Jobs added that he expects iTunes to sell more than a million movie downloads per week within a year.
Adds Disney president and CEO Robert Iger: “Disney is committed to providing innovative ways for audiences to enjoy their favorite entertainment content, and our association with Apple is yet another example of how we continue to reach consumers on their terms, regardless of time or location.”
CinemaNow, which includes Blockbuster and Microsoft Corp. among its financial backers, offers downloads of more than 4,000 feature-length films and other video content from 250 content providers, including 20th Century Fox, MGM, Paramount Pictures and NBC Universal.
In September CinemaNow introduced a service that lets its customers download movies for $9.99 each and burn them to a DVD for playback on DVD players for viewing on TV screens. The burn-to-DVD service provides movies at the same time they become available in retail stores, CinemaNow says.
“Our customers will be the first to experience a major step forward in movies on the Internet: the ability to download a DVD from the comfort of home the same day the DVD becomes available via retail outlets,” said Bruce Eisen, President of CinemaNow.
“Partnering with CinemaNow not only ensures secure online distribution for our content but also underscores Universal’s continuing push to leverage emerging technologies as new avenues of entertainment content delivery,” says Craig Kornblau, president of Universal Studios Home Entertainment.
Guba.com, which has been operating since 1998, began offering in late June and early July downloads of movies from Warner Bros. and Sony Pictures Home Entertainment. “Our traffic and sales have been up 300% since June 26,” the day Guba launched with Warner Bros., says Myers.
With an unusual mix of characteristics as both a social networking, free-content video site and a seller of premium content from TV and movie studios, Guba figures it’s just at the beginning of a major era of growth, its spokeswoman adds. “We’re playing both ends of the market,” she says, noting that many of Guba’s users e-mail their friends directly from Guba.com about Guba content they’ve accessed. “The viral marketing with our free content brings viewers back to our paid content.”
The expanding movie market extends to the limited runs and unusual movie titles and recorded TV programs promoted by CustomFlix, co-founder Giles says. “We’re starting to see studios overcome their own nervousness and partake in new processes,” he adds, noting recent deals CustomFlix has signed with TV networks for archived editions of the news interview programs “Charlie Rose” and “60 Minutes.”
CustomFlix also digitizes videotapes of old movies, making them available for on-demand orders. Its discs are sold through Amazon.com as well as through customized CustomFlix E-Stores that content providers can set up on their own web sites.