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Try as they may, FACT or any other anti-piracy organization is never going to convince the world to play by only their rules. Even iTunes, with its pleasing interface, super-fast transfer speeds and crisp iPod and iPhone integration, has its share of shortcomings. For one, its catalog is scant and saddled with some serious DRM; for another, the quality still isn’t quite up to par (despite the introduction of HD alongside AppleTV Take 2).
Plus, at $3.99 per rental, it’s not exactly a bargain. Rent two movies a month, and you might as well sign up for Netflix’s 1-at-a-time unlimited plan for $8.99, which includes unbridled use of its Instant Watching System. (Of course, you can’t Instant Watch on the Mac, due to DRM snags, according to Netflix.) It’s long been rumored that iTunes is going to offer some sort of ad-supported subscription streaming service for a flat monthly fee, but it has yet to pass muster with Steve.
But if SurfTheChannel’s users are willing to endure pop-ups, buffering and missing links, Foxton doesn’t see why iTunes devotees won’t sit through an ad or two.
“The death knell is already sounding for the audio side of iTunes after We7’s success in persuading Sony to open up their catalogue for free (in the U.K.), other sites and labels are sure to follow. Once Hollywood sees how well the advertising model works for the music industry, it will surely make its own plans to cash in.”
The MPAA agrees: “There are a lot of positives about streaming. ... Studios are experimenting with all sorts of cost and timing structure to try to find the right answer,” Garfield said.
Even “Iron Man,” which pulled in more than $100 million in its opening weekend, has been watched more than 250,000 times on SurfTheChannel. And not four months after unveiling iTunes Rentals, Apple and Warner Brothers announced that digital movies will be released alongside DVDs, rather than a month later, as originally planned.
Audiences and studios are clamoring to fully embrace the digital movie revolution --- it’s just a matter of negotiating the various prices of admission. Just last weekend, The Wall Street Journal reported that Warner’s move comes at a cost to Apple; apparently movies will be priced below cost in order to keep demand from slipping.
With streaming sites, however, the allure of free is just too strong, and studios are beginning to take notice. Just like Napster was eventually adopted by lesser-known artists as a tool to spread their work to the masses, some studios are migrating to existing streaming sites “so they don’t have to build from the ground up,” Garfield said.
Wholly supported sites like Hulu already offer on-demand content straight from the source, and Foxton revealed that SurfTheChannel is in negotiations to swap out some videos with higher-quality content. The site is also exploring “partnership schemes that would allow content owners to place their own ads on pages that link to their own content,” he said. There’s even an iPhone app in the works that will allow SurfTheChannel to take advantage of Apple’s new SDK.
In fact, Foxton thinks his site may be the key to iTunes’ future success as the landscape changes around it: “So far Apple has been very good at leading the way with iTunes and other innovative products, but they need to take a serious look at providing ad-supported content before another major beats them to it.”
Much like the Napster days, 2008 is a wonderful time of discovery, as new and better ways to watch movies and TV shows evolve before our eyes. With iTunes, AppleTV, iPod and iPhone, Apple offers the best digital video experience around and has all the pieces in place to keep the revolution rolling gently down the stream --- it’s just a matter of whether Steve is willing to slap an ad on the side of the rowboat.
“There’s a thirst for motion picture content,” said Garfield. “Most people are willing to pay something; the question is, where does value and demand intersect?”