Editor-in-Chief, iLounge
Who wants to pay $15 to $30 for a sub-DVD-quality video? If you
raised your hand, consider yourself rare. Over the past year, Sony
Computer Entertainment tried to popularize pocket-sized but DVD-priced
movies, a market and content it had all to itself in the absence of an
iTunes Music Store from Apple Computer. But according to an article in The Hollywood Reporter today, that effort has failed, and there are lessons to be learned as a consequence.
Buy Your Favorite Movies - Again!
One year ago, Sony Computer Entertainment claimed that it had a
juggernaut on its hands. In addition to playing games and music, the
company’s PlayStation Portable (PSP) would also be able to play back
full-length theatrical movies stored on Universal Media Discs (UMDs),
one of several features distinguishing Sony’s device from Nintendo’s
popular, cartridge-based Game Boy products. Movie playback wasn’t just
an abstract possibility, Sony suggested: it quickly trumpeted the support of “several motion picture studios"
as “validati[on of] the multi-media entertainment value proposition of
PSP,” and itself released several films in UMD format. Amazingly, Sony
and these studios were operating under the presumption that consumers
would pay DVD-level prices for lower-resolution films they could only
watch on their PSPs; they collectively proceeded to release many more
UMD format movies, and even built a critical mass of titles. Despite
persistent whispers that most people weren’t especially interested,
Sony repeatedly suggested that UMD movies were popular, and even claimed that videos - not games - would comprise 60% of UMD sales, with an estimated 130 million UMDs being sold in 2008.
The house of cards began to fall earlier this year. Though Sony took steps to counter reports
of sagging interest in UMD movies by claiming that titles were
“successful” and “still selling well,” its movie studio partners became
unusually candid about the platform’s failings. Warner Bros. openly
told film industry trade publication Variety in February
that sales were disappointing, and Paramount reportedly decided to stop
releasing titles for the format at that point. Today, the signs of
gloom became undeniable. A second trade publication, The Hollywood Reporter, ran an article
discussing the failure of the UMD movie platform, quoting an executive
with Universal Studios who dubbed UMD “another Sony bomb,” and said
that sales were “near zilch.” The article also suggested that leading
retailer Wal-Mart is dropping support for UMD movies, and that even
Sony Pictures had conceded that the format was losing shelf space.
What went wrong? Though The Hollywood Reporter attributed the PSP’s
decline in part to “the arrival last fall of Apple’s video iPod,” Sony
Pictures’ President Benjamin Feingold claimed that the inability of PSP
videos to be played on bigger TV screens was at least partially to
blame, along with the PSP’s inclusion of a Memory Stick reader, capable
of playing back user-ripped DVDs. Said differently, consumers
apparently didn’t want to pay twice for the same movies they’d
previously purchased, and didn’t always want to watch them on the
device’s little screen.
Lessons For Apple: Watch Sony, Do The Opposite
Putting the iPod’s possible role in the PSP’s decline aside for the
moment - a curious point, given that no one is or was selling movie
content for the iPod as PSP movie sales slumped - there are other
lessons to be learned from this story. The first: as with CDs, most
consumers aren’t interested in paying full DVD prices for stripped-down
versions of movies - if they were, they’d buy the DVDs. That’s the
reason $9.99 album download pricing was the right move for the
low-bitrate songs sold through iTunes; to make more money, companies
will need to offer an equally good or better-than-physical disc
experience. As we said last April,
pricing UMDs at $20 was an absurd idea, and unless they offer DVD
quality and a superior archival solution, similarly priced movie
downloads would be equally suicidal.
Read the entire article here.