Netflix for Android

Netflix is working on a streaming video application for smartphones running Google’s Android operating system, a Netflix employee and online job listing have each confirmed.

Netflix has posted two job listings on its website so far this summer, both seeking Android developers. The current listing is titled “Android Video Playback Expert,” and begins, “Netflix is looking for a great engineer to help us build Instant Streaming client implementations on Android devices.

Netflix Streaming Is Coming to Your Android Phone

Netflix Edges Past Hulu In Total U.S. Traffic

Web traffic to Netflix was 20.2 million in June, 2010, just edging past Hulu’s 19.7 million.

It has to be said that most of the Netflix traffic likely was people updating their queues and so forth, while more of the traffic to Hulu was people viewing actual videos, but the traffic is some indication of the potential for Netflix to move into the video download space, some would argue.

Netflix Edges Past Hulu In Total U.S. Traffic (comScore)

Hulu Plus Not a Danger to Netflix

Barclays analyst Doug Anmuth does not believe Hulu's new subscription service "Plus" will harm Netflix subscriber growth, though it is the "first credible competitive subscription offering," especially for viewers who watch serials and other popular TV fare.

Netflix still is heavy on movie content.

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Netflix Faces Stiffer VODCompetition

Netflix faces competition in digital video-on-demand and pay-per-view offerings from players like Comcast, Time Warner Cable, DirecTV and Dish Network, according to analysts at Trefis. The reason is a
recent Federal Communications Commission decision allowing new films to be made available on-demand before such films are available on DVDs.

The FCC generally prohibits the use of so-called "selectable output control" technology, which encodes video programming with a signal to remotely disable set-top box output connections. But the FCC granted a waiver from those rules for Motion Picture Association of America members who want to protect copying of content if a new digital release window is created.

Allowing movie studios to temporarily prevent recording from TVs could pave the way for movies to be released to homes sooner than they are today. The FCC said the waiver is therefore in the public interest, because the studios are unlikely to offer new movies so soon after their theatrical release without such controls.

The FCC decision allows movie studios (like Paramount, 20th Century Fox, Disney Studios) to block analog signals on TVs and video recorders when consumers purchase their latest on-demand movies.

This decision was pushed for by Disney, Time Warner and Viacom to reduce the likelihood of content piracy, especially for new films where instances of piracy tend to be high. While this move gives movie studios more control over their content offering, it also gives a boost to cable providers that compete with Netflix to deliver the latest films to consumers, Trefis argues.

Netflix Outlines How it Will Become a Streaming Video Provider

Netflix was supposed to be "toast" as the world shifted from DVD rental to online viewing of movie content. But Netflix always knew that would happen, and has remained in front of the transition in a way few firms ever do.

Netflix has introduced a $7.99 streaming-only subscription plan in the United States for the first time. The plan, which allows members to instantly watch unlimited movies and TV episodes streamed from Netflix to TVs and computers, is available now to both new and existing members.

The company also announced that the price of its popular subscription combining unlimited movies and TV shows streamed instantly over the Internet and unlimited DVDs delivered quickly by mail, with one DVD out at a time, will increase by a dollar a month to $9.99. Prices of subscription plans allowing for more DVDs out at a time will also increase.

Remember When Netflix Was "Toast"?

Remember when Netflix was supposed to be "toast"? You remember the arguments: Physical media was
out, online was in; Netflix was wedded to a dying business model. Online distribution, by YouTube or
Hulu, was going to destroy Netflix.

That hasn't happened. Quite to the contrary, investors have bid up Netflix's stock by nearly 100 percent
since January 2010, in part because Netflix shows every sign of being a contender in online video. And now Hulu has announced a "paid" access model that puts it in head-to-head competition with Netflix to some extent.

True, Netflix often is thought of as primarily offering movie fare, while Hulu's content leans heavily towards TV shows.

Netflix has 14 million paying subscribers, while Hulu has about 40 million unique viewers, but so far zero paid subscribers. And that is the test for Hulu. Most observers think perhaps five percent to 10 percent of Hulu users might choose to buy the new paid service, suggesting a potential base of two million to four million paid subscribers.

If one assumes four million subscribers, at a monthly fee of $10, that implies $480 million worth of annual revenue. That's interesting, but not terribly interesting.

Wal-Mart to Become an Online Video Service Provider

What do you do when you are one of the top retailers of DVDs in the United States, and the product starts to face serious substitution from a newer product?

You start selling the newer product. Or so Wal-Mart thinks.

The retail giant, according to the New York Times, has agreed to buy Vudu, a three-year-old  online movie service built into an increasing number of high-definition televisions and Blu-ray players.

Wal-Mart’s move is likely to give a lift to sales of Internet-ready televisions and disc players, which generally cost a few hundred dollars more than devices without such connections.  Nor is the move the first attempt by Wal-Mart to figure out a way to make a transition from sales of packaged media to online forms of video consumption.

Wal-Mart dabbled in aq Netflix-style online DVD rental several years ago, but sold the operation to Netflix after getting 100,000 to 250,000 subscribers. Wal-Mart also attempted to get into video rentals with HP in 2007, but it gave up on that project after a year.

The Vudu acquistion would instantly make Wal-Mart a significant force in the video streaming business, and would make the company a direct competitor to Netflix once again.

Vudu initially entered the market with a set-top box that offered access to its video streaming service, but gave up on building its own hardware, and started offering its service as a software offering that could be integrated into other consumer electronic devices.

That might make more sense, as Wal-Mart also now is one of the leading retailers of consumer electronics.

Of course, Wal-Mart also has to position its electronics sales against Best Buy, a major competitor that likewise  is working with CinemaNow to enable streaming video services on its own consumer devices.

Is Digital Delivery Destroying Other Parts of the Movie Ecosystem?

Reality typically is more complex than any forecast about reality. Consider the movie business and downstream ecosystem. Digital entertainment was supposed to destroy the movie theater business, but evidence is contradictory on that score.

It might be more accurate to say that the digital entertainment business is hitting "physical media" sales more than anything else. In the first half of 2009, ticket sales grew 17.5 percent, according to Media by Numbers, a box-office tracking company. You might argue that is the result of higher ticket prices or a desire to momentarily escape recession woes.

As it turns out, neither of those factors seem to be driving the trend. Attendance jumped by nearly 16 percent in the first half of 2009. If those rates hold for the whole year, it would be the biggest box-office surge in at least two decades.

There likely is some truth to the adage that "people go to movies more frequently in a recession." But the evidence is mixed on that score. The last time Hollywood enjoyed a double-digit jump in attendance was 1989, when the unemployment rate was at a comfortable 5.4 percent. That year, the number of moviegoers shot up 16.4 percent, according to Box Office Mojo.

In 1982, theater attendance jumped 10.1 percent to about 1.18 billion as unemployment rose sharply past 10 percent. Then admissions fell nearly 12 percent, an unusually sharp drop, in 1985, as the economy picked up.

The economy's effect is a bit unclear, in other words. As always is the case, though, movie attendance is higher when film-makers create movies lots of people want to see, and that likely is a part of the story.

The film industry over the last year or two has released movies that are happier, scarier or just less depressing than what came before, some might argue.

Still, the point is that digital delivery has not adversely affected theater attendance of late.

DVD sales are another matter. In 2008, movie ticket sales surpassed DVD revenue, according to Adams Media Research. Where 2009 box office receipts grew 10 percent $9.87 billion, DVD sales fell 13 percent to $8.73 billion.

For whatever reason, consumers are spending less money buying DVDs than they had been for most of the past 10 years, and a reasonable guess would be that video on demand and other streaming services finally are starting to have an impact. The other angle is that Netflix has kept growing as well, despite predictions by many that growth would falter as Internet delivery and VOD became more established behaviors.

Consumers may also have realized that they will not watch most movies more than once. That will shift behavior towards rental services and VOD.

The prevailing wisdom is that the DVD business is in a permanent decline. A few years ago many analysts wrongly predicted that theater sales would drop every year, as well. One should never underestimate the impact business decisions by the movie ecosystem can have.

Making movies people want to see plays a huge role, for example. Pricing and distribution decisions made in the DVD sales and rental channel also can have a huge and unforseen impact. Netflix disrupted the retail rental store business, for example.

Also, Blu-ray HDTV appliance adoption might be playing a role as well. Though the installed base of DVD players still represent the lion's share of device usage, Blu-ray obviously is growing. That could have consumers holding back on purchases of physical media they believe will someday go the way of casette tapes.

Video Now Driving Bigger Access Bandwidth Packages, says Compete.com

How much Internet-delivered video is being consumed by users of sites such as Hulu.com or Netflix.com? According to compete.com data, Hulu.com traffic has grown 210 percent over the last year.

"If Hulu.com continued this growth trajectory for another year, we could see it break into Compete.com’s top 50, surpassing unique visitor traffic to sites like the NYtimes.com and Netflix.com," says Matt McGlinn, Compete.com writer.

From September 2008 to September 2009, Netflix.com’s volume of unique visitors viewing movies and other content online increased 163 percent, says Compete.com.

The good news for Internet service providers is that these trends will keep driving end users to buy access packages featuring higher amounts of bandwidth, says McGlinn.

Why Netflix is Not "Toast"

On-demand video might affect the DVD rental business someday, but apparently not this year. Netflix just revised first quarter and full-year 2008 guidance. For the year, Netflix expects to have 8.9 million to 9.5 million subscribers, up from the prior forecast of 8.4 million to 8.9 million subs. It expects revenue of $1.345 billion to $1.385 billion, up from $1.3 billion to $1.35 billion. It expects unchanged GAAP net income of $75 million to $83 million. But GAAP earning per share will be higher. The new forecast calls for $1.18 to $1.30 per diluted share, up from $1.12 to $1.24 per diluted share.

On-demand viewing is convenient, to be sure. But there are countervailing values as well. On-demand purchases introduce an element of uncertainty into monthly budgeting of expenses. On-demand rentals can be cash transactions, with no later unexpected financial impact. It's an underestimated value for physical rentals rather than on-demand purchases.

Flat rate is important for many consumers. So is the "unlimited" number of titles one can buy on some Netflix plans. That adds more value. Think of how parents view texting charges. Why do so many people buy relatively large plans? Because they don't want overage charges.

On-demand viewing leads to "overage" charges. Flat-rate or "cash on demand" services eliminate that uncertainty.

Content, TV Display Key to Online Success

The most-important things online movie download services can do to succeed is offer a broad selection of content and make it possible to view that content on TVs, which is the expectation users now have for movie content. That's because the single most important ingredient for success for any video offering is the content.

That isn't to say content pitched to mobiles or PCs can't find a niche. It is to say that the broad mass market for online-delivered movie viewing won't become a mass phenomenon until user behavior is consistent with what consumers expect today.

"When it comes to movie rentals and purchases, the quality of content matters," say analysts at The Diffusion Group. The second crucial element is that "getting video downloads to the TV is absolutely imperative."

The ability to view movie downloads on any TV in the home is of critical importance, both to those that have used online movie download services and those likely to do so soon, The Diffusion Group says.

The use of mobile phones for video viewing is not considered sufficiently desirable to justify using an online movie download service, Diffusion Group researchers find. "As such, cell phone video viewing will not in-and-of-itself be a compelling attribute for an online movie download service, especially of full-length movies.

And there's a difference between users and proponents. Proponents emphasize the interactive capabilities online content enables. But users don't seem especially enamored of those sorts of features, as fond of them as interactive proponents are.

Adult broadband users don't agree. "Only 28 percent rank this attribute positively and 42.3 percent rank it unimportant," Diffusion Group researchers say.

What Future for Downloading, Streaming Video?

The conventional wisdom now is that movie downloading will replace DVD sales and rentals, and that this replacement is only a matter of time. The conventional wisdom may well be correct, up to a point. On-demand viewing, in one form or another, has been increasingly for decades.

To some extent, the rise of the cable industry was an early and crude form of on-demand viewing, to the extent that viewers began to break away from the "three networks" experience, starting a process of audience fragmentation that continues today in much more diverse forms.

But movie downloading isn't the only future. In fact, the way new visual media are being used suggests that consumers are taking an "all of the above" approach to media.

People might continue to rent DVDs as well. But maybe not in the same way. "Unless video stores are reinvented, it may be that in five years, there are tens of thousands of kiosks, millions of online DVD renters and very few video stores," says Reed Hastings, Netflix CEO.

If you look at any sort of DVD media as an example of "sideloading," as people sideload music onto their iPods and MP3 players, you get the idea. People download songs. But they also may stream or sideload. And though one often thinks online delivery is the only viable business format, one can imagine other ways to do things.

Price, for example, might be one way to differentiate the market. Online or to-the-TV downloads or streaming will have a higher price point, with a more "immediate" delivery format. But mailed DVDs will have a much-lower price point, with less immediate delivery. But the point is that the delivery time might not matter.

On the Netflix unlimited three DVD plan, can have as many as three movies "checked out" at any one time. And if a person is busy enough, viewing of those movies only happens on weekends. So "immediate" availability isn't required. The three selections have to be available on the weekend.

Release windows still are a factor as well. If you want to see a movie, and missed it in the theaters, you can view it about a month to 45 days sooner than any "on demand" outlet has the content, if you watch on a DVD. On an unlimited rental plan, the cost of any viewing is arbitrary.

Cable and Internet VOD costs something on the order of $4.00 per movie, and the content has to be viewed within a certain period of time, sometimes within 24 hours.

Selection probably will be an issue as well. It is hard to imagine an equivalent lineup of online titles as the Netflix catalog represents, especially in the "long tail" area of niche content.

"Despite the growth of VOD over the last five years, DVD rental has been stable, with online rental and kiosk rental making up for store losses," says Hastings. "In the United States, DVD spending, including purchase, is still approximately 20 times larger than cable and Internet VoD combined, according to Adams Media Research."

Just about everybody thinks this will change, at some point. The issue is whether online delivery is the only choice, or whether other delivery methods still will remain a significant part of the mix. Price, release windows, immediacy, and depth of catalog suggest there is room for multiple consumption modes.

Apple, Netflix ramp up Online Video Efforts

There are many reasons lots of people ought to be paying attention to streaming and downloaded video. Lots of people work for companies making a living delivering video products and everybody watches video in its various forms. Lots of companies are making expensive bets about what people want to watch, how and where they want to watch, what features are required and how much they will watch. The two mid-January developments in the area of particular note are the Netflix "unlimited online viewing" offer and Apple's launch of a video download service.

Up to this point Netflix has allowed its subscribers to watch online movies on a limited basis, corresponding to their monthly plans. Basically, hours of online viewing roughly correlated to the monthly subscription price. The big change is that Netflix now allows users on unlimited rental plans starting at $8.99 a month to stream as many movies and TV episodes as they want on their PCs, choosing from a library of over 6,000 familiar movies and TV episodes.


Now, subscribers on unlimited plans can stream as many movies and TV episodes as they want from the smaller instant watching library, unconstrained by any hourly limits. The move widely is viewed as a preemptive response to Apple's launching of its own video download service, using a rental model rather than "download to own" approach. Up to this point Apple has seen modest success with an approach based on Apple TV hardware and content from two studios, Disney and Paramount.

All major Hollywood studios have agreed to make their content available as part of the new Apple service. They include Paramount, Universal, Walt Disney, Warner Bros, Sony Pictures, Metro-Goldwyn-Mayer, Lionsgate, New Line and News Corp's Fox.

Using Apple's iTunes online store, US consumers will be able to hire new-release movies at $3.99 for 30 days. Older titles are priced at $2.99 for the same duration.

These movies can be viewed on iPhones, iPods and television. One can debate the impact of Apple's more-aggressive move into online downloads and streaming. In fact, one can argue that the streaming business is a different segment from the "download to own" market or the "rent by downloading" segment.

One also can debate who wins and loses in the video rental business: Netflix, Blockbuster, Amazon.com, Joost, iTunes or others. Even the impact on Netflix is debatable. If consumer use of the streaming feature increases, Netflix will pay more money in licensing fees to the studios who own the content. It also will incur more bandwidth charges. On the other hand, Netflix might spend less money on postal charges, shipping and handling of physical DVDs.

Probably more important is the strategic impact: Netflix's ability to retain existing market share as new competitors enter the market.

The other issue is which market is affected. To some extent the "view on PC" segment is where Apple, Netflix and others compete head to head. There are other segments, such as the "watch on my iPod" market, where Netflix and others delivering to the PC do not play.


Also, one might debate whether a subscription service is different from a pay-per-view model. Heavier users arguably will prefer a subscription model. Lighter users might well prefer the "pay as you go" model. Also, there is little question but that mobile, iPod, PC and TV viewing segments will emerge as full-fledged markets at some point, irrespective of the payment model.

Business motivations also are different. Apple sells content at prices as low as possible so it can create a market for its devices. Its market is rNetazors (devices) not razor blades (recurring revenue). Netflix has the opposite business model: it only cares about devices as platforms to sell content on a recurring basis.

To some extent, then, Netflix and iTunes ultimately compete with telco, wireless and cable on-demand programming offerings, in addition to competing with each other to some extent. Netflix and iTunes now are in the video on demand business, not the "DVD rental" business.

Telcos and cable companies investing heavily in broadband access networks play in the linear TV space as well as the on-demand video space. They compete directly with each other and satellite providers. But over time each of the three main linear programming providers also competes in the on-demand entertainment market, especially as such viewing can be supported on TV screens at some point.

Netflix Download -to-TV Service Coming

Netflix is working with LG Electronics to market a set-top-box=based movie download service for TVs, Business Week reports. The move is not unexpected, but is significant in terms of its timing. Netflix has over the last few years modified its statements about the DVD rental business, moving from a "consumers don't want to mess with downloading" to "we'll do it when it's the right time" stance.

The move now means it is "time." The transition from physical distribution of movie content to electronic download to TVs is underway, Netflix is signaling. The service, which extends the Netflix download service beyond "movies to your PC," is expected to begin service in the fall of 2008.

And though Apple TV has not gotten much traction, Business Week expects Apple to unveil its own download-to-TV service as well.

Netflix has been offerings downloads to PCs for about a year. But just about everybody who thinks about the matter agrees that downloads directly to TV screens is what is needed to really jumpstart the business.

Amazon.com, TiVo and Blockbuster also have decided they no longer can wait to enter the nascent business.

Again, what is important about the Netflix move is the timing, not the move itself. Netflix has concluded that even if revenues from online-to-TV downloading will not eclipse DVD rentals for some time, one tipping point has been reached. Netflix has to get into position now if it wants to maintain leadership in the movie rental business of the future.

By some reckoning, that business already is entering its 3.0 phase, having started with retail store rentals, followed by mail delivery and now starting the download phase.

And it is worth noting that if cable TV "pay per view" or "on demand" efforts had been quite a bit more than a niche, the video rental business and Netflix would not have developed. Cablers will note that studio licensing rules and release windows account for the rise of the independent video and DVD rental business.

That is true. What also is true is that studio profit margins and gross revenues control the availability of product. Once studios decide they can make as much, or more money, by switching to online distribution, they will do it.

In that regard, a recent slowdown in growth rates for DVD sales in retail outlets is another important market indicator. Consumer fascination with DVD purchases might be waning, overall. Legally or illegally, online-delivered content might be a contributing factor.

So legal alternatives such as Netflix will provide should have a shot at success. What remains to be seen is how widespread adoption will be. Consumers are quite fickle about special-purpose electronics devices. If the value is high enough Netflix will not find there is a problem. "No late fees" and "no drive to the store" have proven to have high consumer value.

But Netflix also seems to be pursuing the integration of the decoder circuits into other Internet-connected devices. The decoding software might reside into a TV, a game player or media reader, for example. That would alleviate the "one more box" barrier, as some consumers just don't want another device, with cords and cables, around their entertainment center.

On the other hand, Netflix then encounters the "only available on one model or one brand" problem. Consumers generally don't want to bother with "this flavor of access on this device" issue.

And though on-demand video should in principle provide even more convenience, the problem has been the content release windows, which essentially dictate that by the time an on-demand movie is available, consumers have had lots of other opportunities to view the content.

For the moment, at least, Netflix should continue to have an advantage over cable, satellite or telco on-demand content. The studios aren't going to disrupt the profitable DVD window just because online delivery now is possible.

Providers of broadband access services face a more complex business challenge. Demand for download speeds should get a boost if the download services take off. The issue is how much actual profit might exist. The problem with video is that it offers scant returns on a cents-per-bit basis compared to voice.

Put another way, video necessarily "commoditizes bandwidth." For those of you who are Bellheads, think of it this way. A two-hour movie delivered in widescreen format essentially requires bandqwidth equivalent to a DS-3 with a holding time of two hours(45 Mbps). True, we compress and pre-process now so only 4 Mbps to 6 Mbps is needed.

But the point is that the value of a 4 Mbps to 6 Mbps circuit used continuously for two hours or so is "worth" what a consumer deems a fair price for watching a two-hour video event. Call it $3 to $7, depending on what the content is and when it can be viewed.

All bits are not valued equally. On a cents-per-bit basis, text messages represent the highest return, with voice someplace in the middle and video at the very low end of the revenue continuum.

It might not matter so much whether "streaming" or "downloading" is the delivery technique, though analysts at the Yankee Group so far think streaming will get more volume. Most consumers won't care. But downloading offers more opportunity for managing bandwidth.

Apple Fox Deal: Blockbuster and Netflix Impact

Apple has a deal with News Corp's Fox for a movie rental downloads. So far, the viddeo download business has been called a "hobby" by Apple CEO Steve Jobs.

Disney has had its catalog available on iTunes to allow for purchases, and other studios have partial movie and partial video content catalogs already available. It isn't clear how much impact the new "rental" capability will have. Apple probably doesn't expect much revenue lift for the moment.

Blockbuster and Netflix, of course, will be watching closely, as both of those firms want to dominate the video download business.

If Apple succeeds, it will illustrate one interesting thing about "disruptive" innovation. Normally, one expects more innovation from smaller companies. But sometimes it takes a big, influential company to really shake things up.

Google and Apple are those sorts of companies.

More Personalized Digital Media

U.S. consumers across all demographics and geographies appear to be adopting digital behavior that is far more personalized, distributed and niche oriented that executives at Avenue A/Razorfish previously had thought. In fact, a recent survey of 475 consumers found that the majority are personalizing their digital experiences and sampling a wide range of niche content.

Those behaviors span recommendation engines, blogs, customized start pages, video consumption, mobile behavior and use of social media. About 60 percent of respondents have customized their home pages, for example. And 82 percent use bookmarks “all” or “most” of the time.

But there is less use of more participatory features. About 18 percent subscribe to Really Simple Syndication feeds “all” or “most of the time.” About 39 percent read “most popular” or “most emailed” links “all” or “most” of the time.

Only about 12 percent use tag clouds “all” or “most” of the time.

According to the survey, nearly 70 percent of consumers read blogs on a routine
basis, and 41 percent have their own blog, or post frequently to blogs. In fact,
46 percent of consumers who responded to the survey read four or more blogs
on a regular basis. All of that blog activity is significantly cutting into the
reach of traditional media outlets, Avenue A/Razorfish notes.

Some 91 percent of consumers rely on the Web to get current news or information, vastly eclipsing more traditional outlets such as television, Avenue A/Razorfish says.

The growing use of niche content also can be seen in respondent consumption of music and video consumption as well. Some 67 percent of consumers watch videos on YouTube or similar sites on a regular basis and 42 percent purchase music online. Avenue A/Razorfish executives conclude that online video not only is becoming more pervasive but also is affecting offline consumption.

For example, 85 percent of consumers have watched a movie preview online before going to see the film at a theater. Some 58 percent of consumers have used a service to download (iTunes) or order (Netflix/Blockbuster) films online, and 71 percent have watched a TV show online.

Consumers also appear to react positively to recommendation engines and personalized services: 62 percent of respondents have made a purchase based on personalized recommendations (by retailers such as Amazon.com) while 72 percent find such services helpful.

Blockbuster, Netflix, Then What?

"Blockbuster" is almost synonymous with "rent a movie." But it appears "Netflix" is more nearly synonymous with "rent a movie by mail." What isn't clear is whether either of the two movie rental players will dominate the third phase of movie distribution, the download or streaming delivery of such material. Cable companies might have hoped to dominate that niche, but "pay per view" has not yet emerged as a truly significant revenue generator, with the exception of some sporting events and X-rated material.

Well, perhaps we should say that no sizable "legal" download business yet has emerged. There appears to be lots of illegal downloading going on. The fact that no name immediately jumps out as "synonymous" with downloading indicates the field remains open. There is no "category killer" yet in place.

Movie Download Business Won't Be That Easy

Until now, most consumers have been reluctant to purchase movie downloads. There are lots of reasons. It is a new behavior, and learning to do things in a different way takes time. There's little compelling reason to change current behaviors, either. Whatever else one might say, the ability to rent or buy movie material is not a pressing problem.

So Web downloads of the same material consumers easily can get is not a winning proposition for most people: it simply doesn't solve a big enough problem, or save enough time or money. Not when DVD retail, Netflix, Blockbuster rental channels, IPTV and video on demand are so easy to use, both absolutely and comparatively.

And so far, it would be hard to argue that paid movie content delivered over a Web connection for viewing on a standard TV actually saves either money or time.

Download-to-burn services offer a way to get around these limitations and might prove more appealing to consumers, says The Diffusion Group. But not for a while. The number of titles available for D2B services is extremely limited, and that won't be an easy problem to fix.

Not for any technical reason, but because movie content owners are acutely tuned to the distribution methods that net them the most money. And there's no way they'd take a chance on harming existing channels by aggressively deploying a new channel before they have some assurance that cannibalization is minimal and new markets can be created.

CinemaNow and Movielink, both of which offer who offer D2B services, have found uptake to be poor. The problem is pretty simple. Movie rentals and purchases are all about the content, and when the content can be had. Since the studios are cautious, the content D2B offers is widely available elsewhere, through the traditional channels.

While 49 percent of adult Internet users are to some extent familiar with online movie stores that offer downloads, less than five percent report having purchased a movie download.

Not surprisingly, those most interested in D2B services are also the heaviest DVD buyers. On average, D2B potential users purchase 55 percent more movies than users who say they won't, or probably won't use D2B services.

Price sensitivity for B2D services also is significant as well. Still, the biggest problem is simply that the hassle factor is too great, the content selection available elsewhere and the price or time savings minimal to non-existent. This is going to be a tough market to jumpstart.

Joost will provide a new test, of course. But it still is hard to see how the incremental value outweighs the hassle, at least for most consumers. Non-traditional content likely will be the more important factor, ultimately.