Is Amazon Rethinking Its Movie Download Service?

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amazon-unbox-logo.pngIt’s been a year-and-a-half since Amazon launched Unbox, its movie download service that competes with Netflix and iTunes. Amazon has a partnership with TiVo to allow people to download movies straight to their TV set-top boxes. But Unbox doesn’t appear to have really made a dent in Amazon’s business yet. The service did not even warrant a mention in last quarter’s earnings announcement. Maybe that is why Amazon is noodling over what it can add to Unbox to make it a hit.

amazon-unbox-survey-2.pngAmazon is asking Unbox customers to fill out an online survey about how satisfied they are with the service. One of the questions asks which of ten potential improvements is “most likely to increase your use of the Amazon Unbox service?” The options range from free streaming with ads and an HBO-like movie subscription service to HD-quality videos and bundling digital copies with the purchase of a regular DVD.

HD videos is a no-brainer. Paid subscription services have been tried before and failed. Free streaming with ads is the most radical concept. The question is whether the economics would work out, especially for new releases. Bundling seems to me a bit redundant from a viewer’s perspective. (If I already watched a stream of the movie on my PC or TiVo, then what do I need the DVD for?). Instant video streams sound great, but the quality will vary from consumer to consumer. You should be able to choose between downloads, streaming, and getting a physical DVD based on your Internet and home-entertainment set-up. Over time, consumers will shift over to purely digital means of distribution as that becomes less painful for them than the Postal Service.

The problem with many of these options is that they do not offer anything that you cannot already get from other movie download and streaming sites. The obstacles to broader adoption of any digital movie service are 1) getting the movie to a TV; 2) reducing download times/improving video quality; and 3) making it easier than just ordering from Netflix (which offers its own unlimited video streaming as part of its subscription service) or going to Blockbuster.

Here is the full list of options under consideration, which you can vote on in our own survey (with full explanation of each one below). Tell us which one Amazon should adopt:

Which Feature Would Do the Most to Help Spur Adoption of Amazon Unbox?

Total Votes: 1078
Started: March 3, 2008

Free Video Streaming with ads – The ability to watch movies and TV shows online within an Internet browser. Watching videos would not cost anything but would include advertisements.

Burn to DVD – The ability to burn purchased movies and TV show downloads to a DVD for playback on a DVD player. To burn videos to a DVD you would need to have access to a special DVD burner on your PC, and use a special type of DVD.

DVD & Instant Stream – The ability to purchase a DVD from Amazon.com and receive a streamed video of the same title you could instantly playback while you wait for your DVD to arrive. This would be included in the DVD price.

High-Definition Videos – The ability to purchase and watch High-Definition (HD) movies and TV shows.

DVD & Digital Copy – The ability to purchase a DVD from Amazon.com and, for a small additional fee, get a permanent digital copy in Your Media Library.

Hit Movie Subscription Service – The ability to watch a defined number of videos per month for a flat monthly fee, including top Hollywood titles. Not all movies would be available for viewing; however, the selection would be comparable to most pay movie channels (i.e. HBO, Showtime, Starz, etc).

Video Extras – The ability to select and watch video “extras” (i.e. DVD extras) when purchasing or renting a movie.

Paid Video Streaming without ads – The ability to immediately watch your purchased Unbox movies and TV shows on your PC within an Internet browser without commercials, instead of having to download them to your PC or TiVo.

Independent Film Subscription Service – The ability to watch a defined number of independent films per month for a flat monthly fee.

Browse your Unbox media library on your TiVo – The ability to access all of your purchased Unbox videos on the TiVo user interface.

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