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Friday, March 24, 2006

More on Universal download-to-own ... HD-DVD players delayed

- Dawn Chmielewski has a solid piece in today's LA Times outlining how the partnership between Universal and the UK's Lovefilm (their version of Netflix) will work, selling consumers a digital version of a movie and later mailing out the DVD. She writes:

    Although limited to a single studio and 35 titles, the service marks a turning point for Hollywood, which has been reluctant to sell permanent downloads of major films for fear of contributing to Internet piracy or cannibalizing DVD sales.

    "This is a no-brainer," said Josh Bernoff, an analyst with Forrester Research in Cambridge, Mass. "Every studio really should be doing this in every geography."

    The download-to-own experiment could help determine whether consumers will pay a premium for the convenience of getting movies in multiple formats. Universal's service costs about $34.72 per movie, compared with $24.30 for a regular DVD.

Of course, the higher price is justified, since it costs more to sell people both a download and an actual DVD. Amazon has been taking that approach with music, offering a digital download while the CD is making its way to your mailbox. Seems like a transitional strategy to me, until consumers get used to owning digital media ... I mean, after all, isn't the point of a digital good that companies don't need to make and move physical goods anymore?

If the British test proves successful, Universal may do this in the U.S., Chmielewski writes.

- There must be one consumer out there who's dying to get his/her hands on a high-definition DVD player, and finds these delays frustrating? Anyone? I find them sort of amusing at this point (same way I'm amused by Microsoft's delay of its next edition of Windows and Office.) According to Andrew Marsh of the Wall Street Journal:

    Toshiba will "synchronize" the launch of its HD DVD players, originally expected to be on sale by the end of March, with the release of titles by the studios, a company spokesperson in Tokyo said. The first titles in the new format are expected on April 18 from Warner Home Video, a unit of Time Warner Inc.


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