alex.moskalyuk

There are quite a few strong messages that the market is sending to movie companies:

1. Consumers are increasingly avoiding the movie theaters, dissatisfied with high prices, level of service, and just general noise in the movies whenever you’re visiting something that’s been sold out. Cinema revenues are, however, still growing, but that’s propped by ever-increasing prices.
2. Studios are not exactly happy with the oligopoly on the national movie market, and frequently are trying to experiment with DVD releases coinciding with movie’s official release. Mark Cuban’s Landmark Theaters does it.
3. Consumers are buying increasingly larger television sets roughly at a rate of 7 mln new sets a quarter.
4. Retailers are not exactly thrilled with CDs and DVDs anymore either, and are looking towards movie downloads options.

Which makes the market pretty ripe for the movie downloads. Not the type that you can get on your PCs, since it’s just not that exciting to download a high-def movie to watch it on a 15″ screen, while your 50″ HDTV is right there in your living room. Companies that can arrange a download to your television screen are too entrenched into defending their little turfs, and with TiVo, Comcast or other proprietary DVR company you’re likely to get content limited to the platform you’re on. None of them has any critical penetration on the market yet, and consumer might get baffled by the cost of a new TiVo or Akimbo box. Maybe not so baffled with the cost of Comcast DVR, but the company has been known to open up its technology for outsiders either.

A winning solution would potentially deliver a low-cost device that’s capable of delivering a high-definition downloadable content to the TV screen. The problem is the low-cost part - if the device is subsidized, it certainly requires the manufacturer to lock in the content delivery in exchange for some premium pricing on content (Apple TV). An ideal solution would allow anyone like Amazon Unbox, MovieLink, NetFlix, Vuze or whatever to plug in and sell their content to the consumer.

Perhaps a dumb terminal with a small hard drive and a Wi-Fi chipset capable of hooking up to the home network, caching the content off the main PC hard drive and delivering it to the HDTV is the solution to go - reasonably cheap to build, something consumers are familiar with (adding a new client to their home wireless network), and something that could be advertised as a fairly sexy solution to watching Internet content on large screen in high definition.

Such device would even support some form of unique identification, thus enabling various DRM schemas and license acquisition, which is a must to please content providers for right now.