Just as cable has gotten consumers comfortable with the notion of renting a movie through their cable box, as opposed to the video store, film studios are seeking ways to bypass the cable company and talk directly to the consumer. With the rise of the XBox 360 and Playstation 3, viewers can watch movies directly from their game consoles. Economically, film studios would no longer have to split their revenue with cable; but if not them, then Microsoft is happy to take a piece. "Sony will likely unveil details about its videostore at the E3 confab in Los Angeles next month. At the same event, Microsoft is expected to announce a partnership with Netflix under which users will be able to stream movies from that company's "watch now" service onto a TV via the Xbox 360."
As customers put more external devices on their TV set, they can bypass the cable box to download content. And don't expect Apple or Amazon to sit back quietly. They are enjoying the revenue from web downloads and would sure like to participate in this big screen grab for content. Ultimately this competition of devices could make it harder to search for content, unless it creates duplication across multiple platforms. Regardless, digital distribution opens up the pipeline to more players and more competition and that tends to lead to lower prices.
