Guba, a pioneer in the user-generated video content space, became a pioneer of another sort today, when Warner Brothers’ film and television content went on sale on Guba.com at 2 PM PST. Through its deal with Warner, Guba will initially sell almost 200 movie and television titles (quickly expanding shortly thereafter), ranging from new releases like “Good Night and Good Luck” to ‘classic’ television content like “The Jetsons”.
Guba will offer two services to users. View-On-Demand (VOD) is priced from $1.79 to $2.99 and affords the user a 24 hour rental. Download-To-Own (DTO) will range from $9.99 to $19.99 for newer titles and allows unlimited viewing on 2 computers and 1 portable device, while allowing a single DVD burn for backup. The service will play content through Windows Media Player on a 640X480 screen. Downloads are progressive and will run up to 1.3MB/second.
The deal sounds similar to the Warner/BitTorrent deal, but Guba is out to consumers first, so kudos to them. To be honest, my money was on Apple to get there first since the Pixar/Disney merger. But Apple’s power probably worked against them here. Having a broader online distribution network in place will give the studios more leverage in negotiations.
As to Guba being one of the chosen few, CEO Tom McInerney offered: “We treated the studios with respect, we listened and were responsive to their needs. Our proprietary technology gave the studios confidence that we could protect their copyrighted material and that our user-generated content could exist side by side with their premium content.”
I can’t think of any negatives for Guba in this deal. I don’t know how long it will last, but a lead is a lead and any differentiation in this space is a plus. Good buzz, extra traffic, and the goodwill of at least one major Hollywood studio, which might help them soon add another, will be a nice shot in the arm.
On the studio side, I like the concomitant release through web and DVD. It shows Warner is starting to get it. But what I don’t like in the deal is the pricing. While the VOD pricing seems reasonable when compared to a video rental, DTO is too high. Equivalent pricing through the two channels will hurt web uptake. These are savvy consumers. Distribution costs through the web are lower and, while I haven’t reviewed the experience yet, I doubt the experience will be equivalent to a DVD. Yes, I know lower web pricing could raise the ire of Warner retail distributors. Still, since the move online is a test, now is the time to understand the effectiveness of lower pricing in the web channel. And, of course, a lower price point is also the best way to combat the studio’s biggest fear online — piracy.
In related news, see Paul La Monica’s analysis of the DVD v. download war. He thinks DVDs will be king for another five years or so. The end is almost certainly much closer than that.