SharkJumping

Update:  A day after I wrote the post below, Starz today announced that they would be launching their own downloadable video service, called Vongo, which would be $10/month, use the Windows Media codec/DRM, and support Windows portable media devices, as well as contain content beyond movies.  I'll review it shortly, but this is a minor blow for RealNetworks and a win for Microsoft. 

I recently tried out the Starz Ticket on Real Movies (yes, that's actually the name) downloadable movie service for the first time in a year since I wanted to see how it was coming along.  I still believe that this service is undermarketed and underappreciated, but it's true that it works best for a niche set of consumers since it's too hard to deploy on a TV.  However, I believe that the subscription aspects of "all you can eat" make it a vastly more compelling experience than an a la carte service and point to potential future mainstream services.

Starz Ticket is a $13/month downloadable movie service where the subscriber can access hundreds of movies, all of which are currently playing somewhere in the Starz movie channels.  One must have the Real Player, as well as an automatically downloaded security plug-in.  You can watch the movies as much as you want (no horrible experience of being required to finish the movie once you start it), store lots of them on the hard drive (they're about 700MB each), and be generally happy with the quality, probably between VHS tape and DVD.  New movies are added every week, and they have a pretty good catalog, from anime to art house to comedy, covering about 40% of the movies released the previous year - the Starz release window is roughly 1-5 years after theater release.  I had hoped that Real would have expanded the video catalog beyond just Starz content, but does not appear to have happened in the last year.

Since no one I can find has ever heard of this service, who should it appeal to?  Frequent travelers who have their laptop with them, students who use their PC as their primary media consumption device, and those geeky enough to hook it up to their TV, as I do.  For those segments, the subscription service opens up a wide world of movies that you can watch on your terms without worrying about which DVD's you have with you.  You choose a movie, wait the 30 minutes for it to download (although you can start watching during the download) and you're ready to go - it really changes how you think about renting movies.

The primary drawback is that Real's video codec/DRM has almost no hardware support that I can find, so that there is no way to easily deliver the movies to a TV through a digital media adapter or media extender, like an XBox 360.   Nor is there a way to download them to a portable video player, which would make it much more compelling, but that would require a codec switch to Windows Media. Instead you have to hook the laptop to the TV with an S Video cable and audio plug, which is a bit of a pain, and which lowers the quality, especially in sound.

So why is it interesting, especially since Real never releases any numbers for the service, which probably means it doesn't have a lot of subscribers?  Because it's another cable bypass effort, just like the XBox market place and similar to the TV shows now available on the video iPod.  It shows the high potential for these services to expand revenue and subscribers for video content owners (especially niche/"long tail content), but it also points out the challenges inherent in DRM and hardware support.  If you make the consumer buy/rent yet another box, then the business becomes quite difficult, as Akimbo is finding out, and which has been the bane of Tivo's existence.  At CES next week, I'm hoping to see a lot of progress in that area, tying together services and hardware, particularly if Intel's Viiv (another bizarre name) initiative works as promised in the consumer electronics arena.