Also, I’m well aware that I frequently touch on this subject, but from the moment I realized video distribution was inevitably headed online, I also realized that this was as seismic a change in the industry as the invention of home video itself. You see, this is where the power of a very few ends — this is where the revolution really begins. Anyone can make a film nowadays, but the bottleneck is still distribution. You have a handful of distribution forces — all of whom are hostile to our beliefs and values, and I’m convinced that what we’re seeing unfold on an almost daily basis is going to change all of that. Not today and not even tomorrow. But  online video streaming (like the ability to self-publish a novel)  means that the prohibitive costs of distribution are about to be a thing of the past. The very few with the power are about to lose that power. The Man is going down.

We live in an amazing era where the ideal of democracy is becoming more of a reality. Music and the news media have already been splintered by the ability of the Internet to undermine the corrupt guardians of those institutions. And now it’s happening in the Left’s most lavish and cherished stronghold: The sound and fury of the motion picture.

This isn’t a technological revolution, it’s a freedom revolution powered by technology, where every twist and turn fascinates and must be encouraged.

L.A. Times:

Across Hollywood, a quiet revolution is brewing that’s about to transform living rooms around the world.

After desperate attempts to prop up the industry’s once-thriving DVD business, studio executives now believe the only hope of turning around a 40% decline in home entertainment revenue lies in rapidly accelerating the delivery of movies over the Internet.

In the next few years, the growing number of consumers with Internet-connected televisions, tablets and smartphones will face a dizzying array of options designed to make digital movie consumption a lot more convenient and to entice users to spend more money.

With films that can be accessed on any digital device, downloaded as iPhone apps or shared on Facebook as easily as a photo, it may be the biggest shift in Hollywood’s business model since the explosion of the DVD in the late 1990s.

“The days of baby steps on the Internet are over,” said David Bishop, president of Sony Pictures‘ home entertainment unit. “It’s now critical that we experiment as much as possible and determine how to build a vibrant market for collecting digital movies.”

Though the online movie business has been growing at a healthy clip for the last few years, driven in large part by the majority of Netflix’s 24 million U.S. subscribers who stream video, it hasn’t come close to making up for the rapid drop in DVD revenue. Insiders attribute that to the lack of selection — thousands of movies available on disc still can’t be found online — and to the complexity of downloading a film on one device and watching it on another.

Studios are eager to change that by offering more movies in easier ways, but there’s not yet a consensus on how. As a result, people who connect their TVs to the Internet or buy iPads will face a vastly expanded but potentially confusing menu of options to access films from different sources in various ways.

From here the article goes on to describe all the laughably bad ideas Hollywood’s going to attempt to try and keep us doling out the big bucks before everything ends up in a much cheaper RedBox kiosk or Netflix envelope.

Whatever, Hollywood.

First off, of course everything’s going to end up online. It wouldn’t surprise me if RedBox saw the writing on the wall and decided to get into the streaming business sometime next year — or yesterday.  Streaming is too damn convenient not to be the future. Furthermore, it’s too cheap of a distribution service when compared to pounding out DVDs.

What has Hollywood freaked now and dancing around the inevitable with 28 day delays and the like is that a buck-a-rental is  a long ways away from a decade ago when the DVD sales biz was booming and the rivers ran with chocolate and the forests with unicorns.

Those days are over and no gimmick or punitive waiting period or “cloud-thingy” is going to bring them back.

1. We are used to paying much less for your product now.

2. We are used to waiting to see your product now.

3. Netflix Streaming might not have “Green Lantern” or “The Green Hornet” or whatever piece of crap green movie you dumped on us recently, but it does have a lot of cool stuff waiting to be discovered and rediscovered: Classic television, tons of documentaries, and those awesome TLC/Discovery reality shows (sans commercials!).

Through the conditioning of their customers to wait for their product to hit whatever outlet we’re comfortable with, Hollywood has lost the most important selling tool they once had: Urgency. The need to see something NOW.

Furthermore, the product sucks like never before, No one wants to OWN this crap. We might want to see it. We might even want to rent it. But we do not want to own it.

If Hollywood wants to create urgency and a desire to own, then they need to make better movies. More like ”The Matrix,” “Dark Knight,” and “Iron Man.” We anticipate films like this, while on the other hand we watch those “green” titles almost out of a sense of obligation.

Studios are losing money like crazy due to this new non-purchasing trend and the hope behind Ultraviolet is that it will put customers back in the frame of mind of owning their home video. Essentially, this new technology will allow you to watch whatever you purchase on your television, PC and mobile device. This convenience appears to be the Big Pitch. I’m not sure it’s enough.  

 The home entertainment market has been shrinking at dizzying speed, but Hollywood thinks that it may have finally found a way to stop the trend before irrevocable harm.  

The answer, studios believe, is in the cloud.

In coming months, most major studios will launch UltraViolet, a system designed to let consumers stream and store movies and TV shows they purchase on multiple devices. It’s the next step beyond Apple and Amazon’s digital cloud services, which allow users to access music and eBooks on multiple devices. …

Reinvigorating the sell-through model is critically important because studios make roughly $15 on every movie they sell versus a few dollars on each one they rent. The studios expected Blu-ray to do that but the phenomenal success of Netflix and Redbox, both of which have made streaming or renting movies easier than ever, has cut into the sell-through business.

So that’s the problem and proposed solution in a nutshell. If it is what I think it is, here’s why I see Ultraviolet going nowehere::

 To sweeten UltraViolet’s appeal, studios are examining the possibility of allowing users to add movies they have previously purchased to their digital rights locker for some additional fee. …

“We’ve increased the friction on digital sell-through by locking it to a specific device,” Mitch Singer, DECE president and chief technology officer of Sony Pictures Entertainment, told TheWrap. “This reverses the friction by allowing members to play movies and shows across any device. Right now users aren’t collecting movies as much as we’d like them to collect them.”

A few things….

1. A major problem the studios (and much of the entertainment media) seem unable to grasp is that — on top of piracy, streaming and dollar rentals, there’s another factor involved in the collapse of sales: Movies just aren’t very good anymore. How many movies do you walk out of nowadays wanting to see again? While we’re seeing a new Golden Age on television, the last ten years have been a slow creative death for the film business. Hollywood’s simply not creating the kind of product audiences want to proudly display on a shelf and relive again and again.  

2. How expensive will an Ultraviolet disc be? Because of Redbox and Netflix Streaming we are becoming behaviorally modified as consumers to watch what we want when we want for an entire month that costs us less than the price of a single DVD. Furthermore, with the drop in creative quality, we’re simply not energized to run to Walmart and spend $17.99 for “The Green Hornet” when we can rent it for a buck or wait out the 28 day moratorium until Netflix has it. If Hollywood wants more impulse purchases they had better create a impulse-worthy product. So if studios plan on making $15 a pop with Ultraviolet, that’s an awfully pricey purchase price and unlikely to change consumer habits.

3. If the Big Pitch with Ultraviolet is that we can watch our purchased DVDs on computers and mobile devices, my question is … can’t we do that now? At least when it comes to the PC, you can watch your DVDs and Netflix Streaming. So what’s the big advantage here?

One potential plus of Ultraviolet is the idea of allowing consumers to load their older DVDs into their system. I’m moving myself across the country Thursday and am more than a little freaked that I could lose my entire film collection due to theft or an accident. All of my music is backed up on iTunes and a separate hard drive, however. I was even able to scan our family photo albums and back those up on multiple hard drives. But my obnoxiously large film collection is disc-only and having a back up would offer some real peace of mind.

Of course, this all depends on what the Ultraviolet “fee” will be. If the creators of this technology were smart, they would offer this service free for a time in order to get consumers invested in the technology. iTunes doesn’t charge to load your old CDs into their system and this likely is why they are now the Coca Cola of the digital music world. I realize iTunes and Ultraviolet are not the same in this regard. With iTunes the consumer stores their own music and with Ultraviolet they would store it for you, but you have to spend money to make money and this kind of service is what many of us have been waiting for.

Essentially, what I see with Ultraviolet is Hollywood grasping for the perfect at the expense of the good. Like a middle-aged former football hero, the studios want to find some miracle that will allow them to relive the glory days of the home video boom, and I just don’t think that’s going to happen. The genie is out of the bottle. The only thing I love more than movies is owning movies I love. And If they’ve lost me….

Studios need to embrace streaming and try to own as much of that market as possible. That’s the future. It may not be as glorious as the past, but there’s money to be made there.

Then they need to try and make better films.

Please read all of Brent Lang’s article. It’s well worth your time.

The studios might be able to bait us into turning something like “The Green Hornet” into an opening weekend hit, but unlike anytime in my life, walking out of a theatre wanting to see “that” movie again is now the rare exception as opposed to the rule.

With video delivery technologies emerging in ways no one expects on an almost daily basis, there’s no silver bullett to solving the very serious DVD sales problem. But something that most certainly would help would be to make more films we’re actually excited about seeing again and again. 

Variety:

Consumers keep spending less on DVD as they switch over to Blu-ray, streaming services like Netflix and VOD, with the aging disc format earning 44% less last year than it did in 2009, despite strong sales for Fox’s “Avatar.”

The wholesale value of 415 titles released on DVD in 2010 fell to $4.47 billion from $7.97 billion in ‘09, a new report by SNL Kagan reports.

Of those titles, 226 million units were shipped, another 44% less than in 2009, signaling a declining interest in retailers to carry the discs, as consumers build fewer DVD libraries at home.

On average, films shipped 545,000 units and earned $10.8 million in wholesale revenue, off 52% from the average in 2009.

DVD’s demise is still hard to ignore, considering it has generated most of Hollywood’ homevideo sales for the past decade. Digital distribution has yet to make up for the decline in DVD sales.

At the same time, Blu-ray also continues to grow, with the format having generated $2.3 billion in sales last year, a growth of 53%, over 2009, according to the Digital Entertainment Group. Consumers spent another $2.5 billion on digital downloads, DEG said, a gain of 19% over 2009.

I’m a movie-lover. A healthy industry means Hollywood is satisfying its customers and I’m a customer who enjoys being satisfied. That’ just not happening anymore and hasn’t for going on a decade now.

Much of the great writing, acting and directing has moved to television, proving that the Hollywood talent is still there. Right now, it’s just not in the movies.

The Los Angeles Times:

“For those who like renting movies, Hollywood may soon have a message: Prepare to wait.

“In an effort to push consumers toward buying more movies, some major film studios are considering a new policy that would block DVDs from being offered for rental until several weeks after going on sale.

“Under the plan, new DVD releases would be available on a purchase-only basis for a few weeks, after which time companies such as Blockbuster Inc. and Netflix Inc. would be allowed to rent the DVDs to their customers. The move comes as the studios are grappling with sharply declining DVD revenue, which has long propped up the movie business.

“Reed Hastings, chief executive of DVD-by-mail company Netflix, revealed that he had discussed delayed-rental proposals with several of his biggest suppliers. People close to the situation at several studios confirmed that such plans were under consideration and probably would take effect next year.

“”The studios are wrestling with declines in DVD sales while the DVD rental market has been modestly growing,” Hastings said on a conference call Thursday with analysts after Netflix reported impressive 24% revenue growth last quarter. “One of the mitigating steps some are considering is introducing a DVD retail sales-only window for a few weeks.”

“DVD sales have been hurt by the recession, which has caused tapped-out consumers to opt for cheaper rentals. But Hollywood studios prefer that consumers buy DVDs because that generates significantly higher profits than rentals.”

Read the full article here.