Internet Movie Marketplaces: Who's Most Likely to Succeed?

Who’ll end up as the Blockbuster of Internet movie distribution?

No one has all the elements in place yet: big audience, vast selection, intuitive design, and a simple way to transfer movies onto portable devices and the living room television.

But here’s my ranking of the five players that are “most likely to succeed” in the business of digital distribution.

1. iTunes Store The big dog. Works for both Mac and PC users, and as of April 2007, had sold 50 million TV shows and two million feature films. New $299 Apple TV device makes it easy to wirelessly transfer iTunes content to a television and view it there. The negatives: no rentals (only download-to-own, at $9.99 and up), no way yet for indie producers to sell their content, no simple way to burn shows or movies from iTunes to a DVD. Also: only a few studios offer features on iTunes, including Disney, MGM, and Lionsgate. Paramount supplies older films -- not new releases. Others have so far been reluctant to cut deals with Apple CEO (and Disney board member) Steve Jobs.

2. Amazon Unbox Unlike iTunes, Amazon Unbox makes movies available for digital rental and purchase. Movies can be sent directly to an Internet-connnected TiVo device for viewing on a TV. While Unbox hasn’t yet built much momentum in the marketplace, Amazon has a built-in advantage over the other players on this list: hundreds of thousands of consumers already trust the company with their payment information, and have Amazon accounts already. Amazon can also make movie recommendations based on past purchases. Indie producers can make their content available on Unbox using Amazon’s CustomFlix service, and keep 50 percent of the revenues. That makes Unbox the most “long tail”-friendly movie service. Among the studios offering features: 20th Century Fox, Lionsgate, Universal, Paramount, Sony, MGM, and Warner Bros. Movies from Lionsgate, Sony, Warner Bros., and Fox. Works well with Windows-compatible portable devices like the Creative Zen Vision. PC only.

3. CinemaNow CinemaNow has been in the movie download business longer than most anybody else: since 1999. It helped pioneer technology to download a movie and then burn it to a DVD (more than 100 titles are now available, mostly older movies), and CinemaNow also hasn’t been prudish about offering “mature content,” working with porn providers like Vivid and Hustler. CinemaNow is the only service working with all six major Hollywood studios. Offers some movies for free, as ad-supported streams. Movies can get to TV with a Windows Media Center Edition PC, and to Windows-compatible portable players. PC only.

4. Vongo Vongo is unique in offering an “all you can eat” movie service for a dirt-cheap $9.99 monthly fee. About 1000 movies are available at any given time, but some titles rotate in and out of inventory. Works with various Windows systems (Media Center Edition, Vista Ultimate, Xbox 360) to display content on a TV. Content can also be synced with Windows-friendly portable media players. Vongo also offers a live, streaming version of the Starz TV channel. Rental only, PC only.

5. Microsoft Xbox 360 Video Marketplace Microsoft has sold more than 10 million of its Xbox 360 gaming consoles, as of December 2006. The video marketplace offers standard-def and high-def features from Warner Bros., Paramount, Lionsgate, and New Line. (As of April 2007, Xbox and CinemaNow are the only of these services offering movies in high-definition.) Rentals only; no download-to-own. High-def new release movies cost $6, and standard-def new releases cost $4. Since the gaming console is already connected to a TV, viewing on the big screen is a breeze.

Dark horses (in no particular order) MovieLink: Initially launched as a joint venture of several major studios, but never well-promoted. Blockbuster is reportedly interested in acquiring Movielink – which could help introduce the service to a wider audience, especially if Blockbuster ties in digital downloads with rentals from its retail locations. ClickStar: Offers both rentals and downloads. Some movies, like “10 Items or Less,” will appear on Clickstar just a few weeks after their theatrical debut. Biggest things ClickStar has going for it: the involvement of Morgan Freeman and his producing partner, the supremely tech-savvy Lori McCreary. Netflix: Digital downloads are now built into Netflix’s monthly subscription package. About 1000 titles available, which could grow to 5000 by the end of 2007. Streaming only, PCs only. Wal-Mart: Expect Wal-Mart to offer the cheapest prices, if not the most compelling user experience. Launched in February 2007. Joost: Viacom announced a deal in February 2007 to make movies from Paramount and MTV Films available on Joost. BitTorrent: Download or rent movies from Fox, MGM, Paramount, and Warner Bros. Bit Torrent’s advantage is zippy peer-to-peer download speed. GUBA: Partnerships with Warner Bros. and Sony.

Some other comparisons of Internet movie marketplaces:

TechCrunch (good pricing comparison)

ExtremeTech