Wednesday, January 14, 2009

Movies via the Internet, How Can VOD Compete

It is no surprise that Blockbuster is copying the Netflix business model and bringing streaming video to their consumers via the web. But it is also clear that Netflix is light years ahead as the leader of the field and Blockbuster ranks an also ran. As Netflix announces additional partners, Blockbuster is just starting but can they catch up?

It gets me to thinking, where is cable and VOD in this discussion. Netflix does not have the full library to stream and Apple is a transactional business. Cable, on the other hand, provides a huge library of TV and movie product, some free, some with monthly subscription to a premium channel, and the rest transactional. How can cable and VOD maintain its lead and market share in this ever changing distribution pipeline.

I have a number of suggestions:

1. I believe that Netflix and Blockbuster subscribers are also film lovers and most likely also cable customers. Research should be done to determine that overlap. Would a satisfactory experience with one service lead to the consumer to drop the other?

2. Improve the set top box - better search, faster response, cleaner look. Make the set top box smarter so that on demand viewing doesn't switch off if the DVR in the box is recording. And make it easier to move content from one TV set in the house to another. The box is there, adding access to the internet puts you in the game, too.

3. Trick features on VOD films. Sure, disable the fast forward when the ad is in the pre-roll, but in movies especially, enable chapters markers so that consumers can move forward to sections of the film they want to watch rather than fast forward through the entire stream.

4. Content is King. And exclusivity on libraries of content can be merchandised back to the consumer. If you own it, they will come.

5. Interactivity. And when content is universal, how you differentiate it, matters. Adding trivia under a movie, enabling e-commerce, contests, etc. can all be effective tools to make the viewing experience unique to cable.

So as the talk moves to video streaming on the web, remember that cable is already bringing HD quality VOD content to the big screen. It just needs to be better marketed and monetized.