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Thursday, February 1, 2007

The Nascent Market: Coming of Age

As mentioned recently, an op-ed I wrote for the American.com last month focused on the amazing display at CES of business activity regarding rights clearances and new consumer goods and services. In writing about these brand-new or upcoming services, I fear I may have overlooked existing ones that offer consumers opportunties to access and enjoy digital content like never before. Many of these services were on display Tuesday in the Cannon House Office Building, where NBC Universal demonstrated at numerous kiosks the creative ways they are distributing online Universal movies as well as programming from NBC, Sci-Fi Channel, USA Network and Country Music Television.

Regular readers know I've argued that before we abandon the rights of artists because consumers feel constrained in their use of digital content, we should allow the market to provide them new uses of content at reasonable price points. Some examples of this have been cited in a series of entries on the nascent market (see here, here, here, here, here, here, here, here, here, here and here). I'll outline some more after the jump, and I'll leave it to the reader to ask if "nascent" still is accurate for this ever-growing digital market.

Two services I'd like to focus on involve download-to-DVD and P2P. I wrote last summer about how CinemaNow was launching a download-to-DVD service, but expressed dismay that the launch was limited to adult programming. Well, the movie line-up there still isn't as robust as Netflix, but it's growing, with plenty of movies for every interest. The gentleman at the kiosk said it can take a few hours to download the DVD, then you have to take the downloaded graphics and put them on, but as bandwidth speeds increase this will become more viable. (It also begs for the ability of content companies to purchase dedicated channels to deliver content, particularly HD content, so consumers don't have to wait so long, but if the net neutrality folks have their way that sort of "fast lane" would be illegal.)

Also of interest was Peer Impact, which seems to be growing quite well. Peer Impact offers both rental and download-to-own services, and includes movies, TV shows, music and games. It has an interesting way of enticing users to host content on their personal hard drives; every time another Peer Impact customer downloads one of your files, you get a cut of his or her payment, and that cut can be applied to a future rental or purchase. No need to trick customers into sharing the way unauthorized services did and do, and no reason to monetize the service with spyware, as unauthorized services did and do. (This business model is also questionable on a large scale if the traffic must share the pipe with all other network traffic, but I'll leave net neutrality to my PFF colleagues on our other blog.)

NBC Universal is even trying to do the "free" route, with unique content developed specifically for the Internet, such as webisodes of NBC's "The Office" that aired on the NBC web site during the summer, when original TV shows weren't airing.

Disney's Anne Sweeney at our Aspen Summit last year outlined how that company is aggressively embracing the Internet, and CEO Robert Iger followed up on that at CES; CBS' Leslie Moonves offered similar examples. Media companies large and small are trying to find out what consumers want online; let's let them continue to do so.

posted by Patrick Ross @ 6:00 PM |

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