Inside Redbox is the #1 "Unofficial" Redbox Online Community for Redbox Codes, News and more. Inside Redbox is not affiliated with Redbox Automated Retail, LLC.

“Why would I buy a digital copy for $20?” This statement, uttered by Frost & Sullivan analyst Dan Rayburn, seems to sum up consumer sentiment towards electronic sell-through (EST) these days.

While video-on-demand and Blu-ray disc sales have been on the up and up, EST has seen its growth slow, with Q4 2010 revenue actually dropping 8%.

BTIG analyst Richard Greenfield believes that Hollywood’s tireless attempts to get consumers back in a movie-owning state of mind by selling content online at disc pricing simply isn’t working. Says Greenfield:

“The studios are simply trying to force something to occur that makes no sense for the consumer . . . The whole concept of purchasing content that you can’t see/touch is also likely to be very challenging for consumers to get comfortable with, especially when most movie content is not watched multiple times and is easily available to re-rent at any moment.”

Content ownership will continue to decline as physical and digital rental increase, predicts Greenfield:

“In a digital world, rental has become so convenient there is simply no need to purchase content anymore . . . “It takes the same number of clicks to buy content as it does to rent it.”

Do Greenfield’s comments smack of the truth, Insiders? Have you purchased movies digitally lately, or is Redboxing, Netflixing, etc. just more practical? Should Hollywood give up hope of ever returning to the early 2000s when people were dropping $20 to own movies?

(via Home Media Magazine)

12 Responses to “Analyst: Electronic Sell-Through “Makes No Sense” to Consumers”

  1. Member [Join Now]
    Alan Smithee [8traxrule]

    My TV has Vudu built-in which is OK for rentals- most are $4 but they do a 99 cent special on one title a day. You can ‘purchase’ some titles through it too, but I wouldn’t want to do that as I can only access them on that TV, and can usually buy the same title on disc for the same price or less. Bought “The Social Network” on Blu-Ray today for $16.99, on Vudu I could have ‘bought’ access to a compressed standard-def version for $14.99.

  2. Member [Join Now]

    These movies companies want their $20 and don’t care how they get it. No way would a pay that for a “digital copy”. I will pay that for something I know me or my kids will watch time and again (I expect to pay that when Harry Potter and the Deathly Hallows” comes out, for example), but not for a movie I will only watch once or am not even sure I’m going to like.

  3. Member [Join Now]

    “Dropping $20 to own movies”? They never “owned” them in the first place, according to the MPAA. We were just “licensing” them and supposedly had all kinds of EULA restrictions on how we could use them. If we were actually OWNING them, then we might be interested in buying them. But with their ridiculous intellectual property schemes, we might as well just rent or subscribe. $20 to license or $1 to rent? Hmmm. Not much of a choice.

  4. Visitor [Join Now]
    greenpad [visitor]

    And how confident am I that the movie that I “own” is still going to be playable in 5 years? 10 years? Many of us have been burned in the past by audio tracks that we “owned” but eventually couldn’t play anywhere (anybody remember liquidaudio?). Until they start selling them as actual files that I can copy to a hard disk or burn to a blu-ray, then I don’t feel like I actually own anything. Same things happened with music–once they started selling mp3s that could be used anywhere, everyone got comfortable with buying them.

  5. Visitor [Join Now]
    Vandrvekn [visitor]

    It’s inaccurate to say customers can “buy” electronic content. As long as downloads include DRM, it’s just rented for as long as the seller wants you to have it. The distributors want us to trust them to always provide the content, but treat customers like thieves. Why should they expect customers to give them more money for an indefinite rental than an actual purchase?

    The mind-bogglingly stupid part is that DRM doesn’t slow down piracy at all, since it’s always cracked. Accordingly, it annoys the legitimate customers for no good reason.

  6. Visitor [Join Now]
    D. [visitor]

    It still does not load recent updates on RSS reader for MyYahoo!

  7. Member [Join Now]
    Lorendahl [lorendahl]

    I purchase only what I truly want to “own” (EULA’s aside). I will happily throw a dollar to play an movie On Demand. Are they worth more than that? Eh, no. They cut out all their manufacturing and distribution cost (bandwidth aside), and have no packaging to produce.

    I “own” very few movies. Only those I know I’ll watch a few times over and want to have handy. The rest is filler material and a download/stream away.

  8. Visitor [Join Now]
    Bob Paulsen [visitor]

    I have music CDs that if I heard them once ,I’ve heard them 200,500 or more times. I count on my hands, the number of times that I watched the same movie again.
    The industry seems to think that owning a movie DVD is related to owning a CD, when about the only thing they have in common is that they are disc. Take 10 people, and 7-8 own/have music collections. 3-4 out of 10 have limited movie collections.
    The only way I’d watch a movie again and again is if they could re- program it to be little different each time. It won’t happen.

  9. Visitor [Join Now]
    Jack [visitor]

    I’ll NEVER “buy” a movie just like I NEVER bought an audio track with DRM. Once they stopped “protecting” music, I started buying it online. If they ever offer a non-drm protected movie I may purchase it, but ONLY if I get to copy it to whatever device I want to play it on…. not holding my breath.

    At no time, however will I ever pay close to the same price for a download as I would for the actual dvd. No extras, lower quality, no 5.1 soundtrack. I’d say it’s worth about 1/4 the $$. At $20.00 for the dvd it would to me be worth $5.00 to “purchase”. I’ll also not pay more than $1.00 to rent. If I can’t get it for $1.00 I’ll find someone to borrow it from.

  10. Visitor [Join Now]
    Jack [visitor]

    Remember folks, you’re not “BUYING” anything, you’re only paying for access to it. This access CAN be REVOKED. At least with physical media, they can’t prevent you from playing it….. although that would certainly be possible with blu ray.

    With the constant updating of firmware on blu ray players, preventing an older movie from playing any more would be a piece of cake. I’m sure there would be a major backlash though, but it’s still possible.

    Rent all you want, but just don’t “BUY” a digital copy.

  11. Visitor [Join Now]
    Russ [visitor]

    Around Christmas Warner Archive offered a 5 for $50 deal which is pretty good (half price for most) considering the films aren’t available for rental anywhere (I’m excluding torrents). But you could also buy a download at the not-discounted price of $15 or get a timed-rental of $5 per 24 hours.

    There is no way EST is going to happen at disc prices. But these are the same stupid studios that over-price music downloads (and jacked up prices during the worst recession in 70 years) and wonder why sales are way down.