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Netflix CFO Sees No Future for Amazon Rentals

Zonk posted more than 9 years ago | from the sniping-from-the-sidelines dept.

Movies 136

Dave H. writes "In comments made at the Morgan Stanley Small Cap conference last week, Netflix CFO Barry McCarthy says he doesn't think Amazon.com will expand its video rental market into the US because the retailer's infrastructure wouldn't work to its advantage with video rentals. He also sees the window between theatrical and DVD releases shortening, which is a Good Thing." From the article: "The price of entry is much higher now than it was in the past, both in terms of the cost of locating warehouses and just the mere fact that Netflix and Blockbuster are both considerably larger now. McCarthy then said that Amazon is in the classic make-versus-buy dilemma, noting that the company can either start from scratch or try to acquire service through either an acquisition or partnership." Update 6/20: Barry McCarthy's position at Netflix corrected.

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Unlike, Amazon.... (1, Funny)

manifestcommunisto (641699) | more than 9 years ago | (#12858847)

I'm here first!

Oh, wait...

Re:Unlike, Amazon.... (1)

manifestcommunisto (641699) | more than 9 years ago | (#12858896)

No, select "Show oldest first" and see for yourself...

Buy out then??? (1)

headchimp (524692) | more than 9 years ago | (#12858852)

Hmm, might be a hint that Amazon buys out Netflix....

Re:Buy out then??? (1)

daviq (888445) | more than 9 years ago | (#12858870)

I don't know, they could do it by themselves...they have the resources...and then they could just take out Netflix later with a nuc...

Re:Buy out then??? (1)

Saeed al-Sahaf (665390) | more than 9 years ago | (#12858967)

I don't know, they could do it by themselves... they have the resources...

Amazon has been no friend of either Seattle or any place it has landed. Sure they could do it themselves, and then export the whole fofillment thing to Mexico or India. A plane full of DVD mailing envelopes can make it to the states in a day.

Re:Buy out then??? (0)

Anonymous Coward | more than 9 years ago | (#12859132)

What has Amazon done that's bad for Seattle...? Provided a lot of jobs?

Re:Buy out then??? (2, Interesting)

1lus10n (586635) | more than 9 years ago | (#12859146)

Yeah, but it would most likely take extra time to be inspected at customs, then there is the issue of having a fleet of planes going 24x7 and the fuel costs etc etc.

Some things are still cheaper to handle locally.

If I mail a DVD to netflix on monday I get a new DVD wensday. Try having that turnaround time when using an out of state facility, let alone an out of country one.

Re:Buy out then??? (1)

_KiTA_ (241027) | more than 9 years ago | (#12859504)

I think it was more of a strong hint that Netflix would not be opposed to a partnership with Amazon.com, actually.

I can't wait... (3, Funny)

CypherXero (798440) | more than 9 years ago | (#12858860)

...until I become a CEO of a large company, so that I can tell other CEO's what to do and think!

Re:I can't wait... (4, Funny)

eclectro (227083) | more than 9 years ago | (#12858924)

...until I become a CEO of a large company, so that I can tell other CEO's what to do and think!

I can't wait until I become a CEO of a large company so that I can patent what other CEOs already do and think.

Re:I can't wait... (2, Funny)

DAldredge (2353) | more than 9 years ago | (#12859183)

Political types and whores already have the entire field of screwing people over patented. :)

Re:I can't wait... (-1, Troll)

Anonymous Coward | more than 9 years ago | (#12859452)

And you, DShitredge, hold the patent on being a lying sack of rotten horse semen.

Re:I can't wait... (1)

LiquidCoooled (634315) | more than 9 years ago | (#12859199)

Patent for the role of a one click CEO.

Abstract
The role CEO is both novel and none-trivial, as such, this patent is written to outline these processes.

Claims
1. The CEO's age shall be greater than 40
2. The role shall have been applied by using the following options
Brown nose way through ranks.
Born with a silver spoon.
3. The CEO shall spend all his time in the office barring the following ommisions:
During a golf tournement
During another unspecified sporting event
During the mornings, these are spent with teh secretary.
During friday afternoons (to be spent in the club)
During lunchtimes.
During random afternoons monday through thursday for unspecified reasons.
4. The CEO shall spend his office time on the internet gambling, watching porn or playing solitaire.
5. The CEO shall commission numerous reports, mostly aimed at emphasising the self importantance of themselves in their role.

Prior art notices
This patent is similar in definition to other patents, though the implimentation is both novel and none-trivial. This section is designed to outline the similarities, and more importantly the differences.
1. one click VP. The VP patent differs from this in respect to the salary awarded.
2. one click President. The President patent differs from this in respect to the salary awarded and quantity of porn viewed.
3. one click drone. The drone patent differs from this in respect to the salary awarded.

Re:I can't wait... (-1, Troll)

Anonymous Coward | more than 9 years ago | (#12859625)

All that effort and you couldn't even make one joke that was funny? You suck.

Re:I can't wait... (1)

jnhtx (87543) | more than 9 years ago | (#12860142)

You don't know Jack! The CEO must be over six feet tall and have silver hair!

Re:I can't wait...Other IMPORTANT CEO HEADLINES (5, Funny)

darkPHi3er (215047) | more than 9 years ago | (#12859147)

1. Microsoft CEO sees no future for LINUX

2. RHEL CEO sees no future for UNIX

3. Google CEO sees no future for Yahoo!

4. RIAA CEO sees no future for P2P

5. CBS CEO sees no future for HBO

6. Western Digital CEO sees no future for Lexar

7. Oracle CEO sees no future for MySQL

8. Sun CEO sees no future for Dell

You read it here first!

Re:I can't wait...Other IMPORTANT CEO HEADLINES (0)

Anonymous Coward | more than 9 years ago | (#12860230)

Good point, but all of these companies are large companies that are down talking their competitors. All Netflix is doing is telling a giant that they can't do something completely within their control.

Re:I can't wait... (0)

Anonymous Coward | more than 9 years ago | (#12859296)

Even better, you get to tell the president what to do.

Re:I can't wait... (2, Funny)

AvantLegion (595806) | more than 9 years ago | (#12860046)

I'm the CEO of a company whose main function is to post on Slashdot.

Your posts have no future. Please leave and let our company's posters handle things.

Doesn't matter (-1, Troll)

Anonymous Coward | more than 9 years ago | (#12858863)

Once the US housing bubble collapses there will be a total economic collapse. Companies like Netflix and Amazon will go bankrupt as Americans just try to save enough for food

Re:Doesn't matter (1)

fishbowl (7759) | more than 9 years ago | (#12859026)


"Once the US housing bubble collapses there will be a total economic collapse."

I'd settle for a levelling off. $60,000 houses in parts of Arizona where there are NO jobs at all, going for more than asking price of >$250,000, the day they hit the market? I don't get it.

I'm not convinced a total collapse would be a bad thing, altogether.

Re:Doesn't matter (0)

Anonymous Coward | more than 9 years ago | (#12859297)

I'm not convinced a total collapse would be a bad thing, altogether.

I'm thinking it will be a good thing as in 2-3 years when the first part of their interest-only (now that's just plain scary) loan starts paying off the principle and their payments go up the market's going to be flooded with houses for sale.

And that means I can snatch up a house in 3 years for what it went for 4 years ago -- so pretty much a 7 year interest free loan for me.

Off course this is highly location dependant -- look for places where people want to retire as being hot. Which means Florida, coastal areas, etc.

Re:Doesn't matter (0)

Anonymous Coward | more than 9 years ago | (#12860690)

You wouldn't be saying that if you OWN a house or property.

what he really said was (5, Insightful)

epaton (884617) | more than 9 years ago | (#12858868)

please dont go into business against us, we are for sale

Re:what he really said was (2, Insightful)

Leroy_Brown242 (683141) | more than 9 years ago | (#12859137)

Sure, why not?

Most that start their own company and do well, at some point want to retire and be bought out.

Tens of millions goes a long way towards retirement.

Re:what he really said was (1)

LiquidCoooled (634315) | more than 9 years ago | (#12859266)

But then you don't want to see your hard earned product get ruined because your business rilav offers you more money. You have been competing for the same customers for years, and many will have loyalties, either technological or psychological, you can't feel happy about giving up so easily.

It would be like Linus selling Linux to Microsoft.

It just wouldn't happen.

Now, if members of your own hand picked team come up with a buyout offer, or maybe a business partner from the very beginning, or your own children even, then its a comfortable feeling.

Re:what he really said was (1)

DroopyStonx (683090) | more than 9 years ago | (#12859349)

Isn't the point of working to get money?

You come up with an idea, form this company (like Netflix)... and it grows. While you are CEO, you're raking in the cash, doing all you can to IMPROVE your product to get more customers to get MORE MONEY.

That's what it boils down to.

If you accepted a buyout, you'd be rich. The end. Retired, never having to work another day in your life.

Why would you continue to care about customers that do absolutely nothing for you? It wouldn't be your problem anymore, it'd be theirs.

You could take pride in knowing YOU created that empire, and it stood up until retards took it over and ruined it.

Re:what he really said was (1)

Felinoid (16872) | more than 9 years ago | (#12859495)

> It would be like Linus selling Linux to Microsoft.

Not exactly. The point of running a business is to make a proffit. It's a job where you hire yourself (self employment).

When your ready for retirement you sell out or pass it down.
(Selling out gives you a nice retirement fund, Passing it down gives your children jobs).

Linux however is a project. Money is not the objective thus it isn't for sale.
That however won't prevent Microsoft from making an MsLinux. Just means Ms Linux will have to compeate with all the other Linux systems.

But if a business owner isn't ready to retire he isn't going to sell.

Blockbuster Online (4, Insightful)

Rick and Roll (672077) | more than 9 years ago | (#12858869)

I signed up for Blockbuster Online only to discover that A) I don't rent enough for it to be a good deal and B) Anytime I rent something I want it right away.

I was impressed that they had many shipping locations. Unfortunately I was unable to take advantage of these because it took 2-3 days to get mail from the shipping location to my house, which is in the same state as the shipping location.

It seems shipping locations would be a lot of the cost of setting this up. Perhaps smaller businesses could pool resources?

Re:Blockbuster Online (1)

justforaday (560408) | more than 9 years ago | (#12858974)

I signed up for Blockbuster Online only to discover that A) I don't rent enough for it to be a good deal...

Don't forget that you get the two free instore game/video rental coupons a month. When you consider that games rent for $6.99 each, think of it as paying for the game rentals and getting the month of video rentals (12-15 a month) for free...

Re:Blockbuster Online (0)

Anonymous Coward | more than 9 years ago | (#12859264)

"Diane, I am holding in my hand a small box of chocolate bunnies."

Although it paled in comparison to the first season, I'm hoping that they eventually release the second season to DVD.

- Tony

Re:Blockbuster Online (0)

Anonymous Coward | more than 9 years ago | (#12859502)

According to a few sites around the internets, Paramount will release a full series set sometime next year. They currently hold the rights to the original pilot and are awaiting Artisan/Lion's Gate's rights for the rest of the series to expire in the US and a few other places (Paramount holds the rights to the show for the rest of the world). Also, apparently Lynch is involved in overseeing the new transfers and 5.1 mixes...

- a different Tony

You're the wrong demographic (4, Funny)

Alaren (682568) | more than 9 years ago | (#12859066)

I have often considered trying Blockbuster Online or something similar, but it turns out I'm in the same boat as you, it might be worth the cost one month out of five and if I'm in the mood for a movie it's not usually a mood I planned a day or two in advance.

The target demographic seems to be hardcore movie buffs and (let's face it) "pirates." I have one friend who subscribes and she and her husband watch two or three movies every Saturday, and sometimes another one or two on Sunday. It's just what they do. I have another friend who is 20 years old and is one of those infoholics who accumulates data the way old women accumulate cats... he gets five or six movies a week, copies them all in a few hours, and sends back the originals without even watching them.

As nifty as it sounds, most regular people just don't benefit from this kind of service. Although apparently, there are enough movie buffs and/or pirates and/or mathematically-challenged suckers to make it a viable business model.

Infohilsm! (2, Funny)

rekrutacja (647394) | more than 9 years ago | (#12859374)

friend who is 20 years old and is one of those infoholics who accumulates data the way old women accumulate cats... he gets five or six movies a week, copies them all in a few hours, and sends back the originals without even watching them

Infoholism... You should tell me that 10 years ago... Or at least before RSS was invented...

Re:You're the wrong demographic (1, Insightful)

Anonymous Coward | more than 9 years ago | (#12859597)

I really disagree with you on this.

I use to have NF and I have to say it is a amazing service that saves me time, and increases my enjoyment of the time i spend in front of the TV.

NF allowed me to make a list of all the TV shows and Movies that I wanted to see. I was able to make sure that I would see those random movies that people always recommend, but i never remember when i get to the video rental shop.

I stopped watching a lot of TV becuase I was able to watch all the same shows i like, but commerical free, and on my own schedual.

I personally just view NF and simular services as a extension of the Video On Demand (VoD) future. We all know that someday, once all the legal and technical problems are worked out, we will watch shows with VoD.

We will be able to filter the crap out, save tons of time, and view things on our own schedual.

Re:You're the wrong demographic (1)

eponymous cowhead (891314) | more than 9 years ago | (#12859622)

You forgot people living in semi-remote locations with limited/no movie rentals and/or obscenely expensive satellite service. Alaska, etc.

Re:You're the wrong demographic (0)

Anonymous Coward | more than 9 years ago | (#12859971)

Or "regular" people watch more movies than you think when presented with a three a month opportunity, especially when they may have been paying nearly as much on late fees for watching less than 3 a month (ahem).

We don't have to leave our house to get DVDs, ever. It uses a queue that you can update or change at your whim. Three a month, anything you could think of, easily searchable... etc.

I just don't think your definition of "regular people" is on target. Consider someone who merely has kids...

In 1998, 72% of teens ages 12-19 reported going to the movies and 71% purchased at least one full-length CD during a three-month period.

Teens ages 12-20 make up 16% of the population, but purchase 26% of movie tickets.

63% of kids ages 9-17 say that seeing the latest movies is important.

62% of youth ages 9-17 say they watch a video at least once a week.

54% of kids view a movie on a VCR three or more days a week and 47% see a movie in a theater at least once a month.

Re:You're the wrong demographic (4, Funny)

jackbird (721605) | more than 9 years ago | (#12860070)

accumulates data the way old women accumulate cats... copies them all in a few hours, and sends back the originals without even watching them.

I've never heard of anyone doing that to a cat.

Well... (1)

Alaren (682568) | more than 9 years ago | (#12860242)

"'...accumulates data the way old women accumulate cats... copies them all in a few hours, and sends back the originals without even watching them.'

I've never heard of anyone doing that to a cat."

Well... you've obviously never met my friend. d^_^b

Re:Blockbuster Online (1)

joelsanda (619660) | more than 9 years ago | (#12859233)

Anytime I rent something I want it right away.

The best way around that is to rent two or three days in advance of anticipating when you want it. With the concept of a queue and no limit on the length of time the DVD can be in your possession (in the case of Netflix), you're all set.

One can imagine the server peak for Netflix is probably Monday and Tuesday for those planning for the weekend.

Though it is funny to live less than one mile from a Netflix warehouse and know I could walk over there, pick it up, and return it before the DVD reached my house. Kind of defeats the business model of Netflix, though.

Re:Blockbuster Online (1)

Ingolfke (515826) | more than 9 years ago | (#12859420)

B) Anytime I rent something I want it right away.

My ultimate dream would be on-demand movies, but in lieu of that and soul-snatching DRM that would have to be in place to actually make it a reality, I wish Blockbuster would allow you to order a disc online and then have it burned at the local store for pickup. They'd have to work out some kind of payment arrangement w/ the MPAA (I think?), but if anyone could do it right now it's probably Blockbuster.

Re:Blockbuster Online (1)

jmcharry (608079) | more than 9 years ago | (#12859677)

The Postal Service claims one day service in state for letters in NC, but my postman told me that the DVD envelopes, while they are sent first class, don't count. Not all first class is first class, apparently. They take two to three days to reach me also, although I am not convinced they are always shipped when the web site claims they are.

Re:Blockbuster Online (1)

Rick and Roll (672077) | more than 9 years ago | (#12860351)

I am not convinced they are always shipped when the web site claims they are.

I thought the same thing. I began to generally hate the service, which was definitely a factor in cancelling it.

Re:Blockbuster Online (1)

Kris_J (10111) | more than 9 years ago | (#12859946)

I trialed Australia's Bigpond Movies and I discovered that A) The weekends burn shipping time and B) Some discs are so badly scratched that they won't play in my DVD player.

This added up to a waste of my subscription.

Netflix wants to get bought out. (0)

Anonymous Coward | more than 9 years ago | (#12858876)

Note the fact he says either start from scratch or you can buy us.

Theatrical Release TO Dvd Release (3, Insightful)

Buster Chan (755016) | more than 9 years ago | (#12858883)

I found that sentence interesting about how he found the window from theatrical release to DVD release shortening. It's probably because a lot of people are downloading movies now, on the day when they come to theater, and so since people are watching free home video copies of new movies anyway, the shorter window is now allowing producers to profit from people who desire early copies to watch at home. Or the following scenario probably happens a lot now: someone goes to a friends' house and watches a downloaded movie that's in theater, and then that person wants their own copy but doesn't want to download, and then that person gets less and less interested in having their own copy as time passes and newer movies are available, so a shorter window is important in getting customers like that. I'm not sure what my opinion about that is, really -- whether or not it's a good thing or a bad thing.

Re:Theatrical Release TO Dvd Release (2, Interesting)

randomwalker (758064) | more than 9 years ago | (#12859034)

The availability of movies online will certainly reduce the window between theatrical and home video. Currently distributers make a lot of money by keeping that window there, but others are exploiting that window to make significant amounts money for themselves. There are lots of businesses that are supporting their business models with free content. We have already seen the progrssion to more global release windows as a result. Unless online piracy can be stopped (which is unlikely), the only things studios can do is move up the DVD release dates.

Re:Theatrical Release TO Dvd Release (1)

Blondie-Wan (559212) | more than 9 years ago | (#12859068)

From a business perspective, it could be a good thing, but from the point of view of someone who loves watching movies in theaters, it's a bad thing. Movies are in theaters such a short time now that one all but "has" to see them on opening weekend to get the full experience. Home video has certainly made it possible for anyone to see far, far more movies than they ever could if they were totally reliant upon theatrical exhibitions, which is a great thing, but there's something special about seeing movies in theaters with fellow audience members, and that experience is going away.

Don't get me wrong; as indicated above, I think video in general has been great, and DVDs in particular are a wonderful development, but there's always pluses and minuses to everything, and here the theatrical experience is what's being detracted from.

Re:Theatrical Release TO Dvd Release (1)

zaq121 (838716) | more than 9 years ago | (#12859397)

I doubt that would be the main reason. I think it has more to do with advertising costs.

Most films are not block buster hits and not having to rebuild interest from scratch can save a lot of money.

Time between theatre and DVD (4, Interesting)

syynnapse (781681) | more than 9 years ago | (#12858884)

I feel like the time between theatre and DVD has shortened signifigantly already thanks to the quality of the films. There is an interrelationship between these two things. How long did it take National Treasure to go to dvd? a week? two?

Re:Time between theatre and DVD (5, Insightful)

Spodie! (675056) | more than 9 years ago | (#12859052)

It's not such a simple process to shorten the time to DVD release. I work in the sound department of a large motion picture studio and all the work I do is for DVD.

Nowadays, every DVD release is dictated by the marketing department. Almost two years ago we fundamentally changed every aspect of our workflow in order to be able to deliver final DVD audio to the authoring department faster. We shortened our delivery time by a week, but marketing wants it much faster - often, this is not possible.

The biggest problem is that the company is so large and there are so many titles in the pipe that the scheduling of elements being created by outside venders is very problematic - final approved picture, final approved audio, extras, subtitles, DVD menus, etc. Not to mention the fact that there are so many idiots up the chain that have no idea what's involved in getting the actual work accomplished.

The President of my company has said that he wants to eventually see the day when a person can walk into the theater, watch a film and on the way out buy the DVD. This could, and probably will happen, but it would likely be a domestic only 5.1 and/or Lt/Rt with little or no extras. The replication time alone would probably push back the theatrical release a week or so.

Re:Time between theatre and DVD (3, Insightful)

SirSlud (67381) | more than 9 years ago | (#12859076)

>The President of my company has said that he wants to eventually see the day when a person can walk into the theater, watch a film and on the way out buy the DVD. This could, and probably will happen, but it would likely be a domestic only 5.1 and/or Lt/Rt with little or no extras.

That would be awesome. I really dont like all the extras, and you can't tell me it doesn't cost more money to make. If what you suggest is true and the movies are priced cheaper than current DVDs, sweet.

Re:Time between theatre and DVD (1)

zaq121 (838716) | more than 9 years ago | (#12859443)

final approved picture, final approved audio, extras, subtitles, DVD menus, etc.
Wow, some of these menus and non abortable junk that we have to watch just to get to the movie has been final approved by someone? Oh my.

Re:Time between theatre and DVD (0)

Anonymous Coward | more than 9 years ago | (#12860441)

Hmmm...first of all, just how much is different between a theatrical sound release and a home audio release? The mixes can't be that much different...

I think one way to do a quick and dirty Theater-to-DVD audio transfer is to run the sound through a TC 6000 reverb or other device that can simulate the revereration of a movie theater. This won't be perfect, of course, but it will speed up the process of making audio for a DVD release.

What would be better would be to use Total Recall to call up the mix used for the Theater audio, and to make the necessary changes for home audio. Of course, this will necessitate the people making the DVD audio to have the same console as the people making the theater audio. Another option is to simply do both the DVD and theater mixes at the same time; I think something like this is already done to give a given movie a THX and SDDS mix.

One way to eliminate the replication time is to give people DVD-Rs at the end of the movie; of course the MPAA won't like this since one can't CSS-encrypt data on low-cost DVD blanks. Quite frankly, the cat is out of the bag and the MPAA's attempts at copy protection are futile; the issue is a social issue and people just need to know that it is morally wrong to watch a movie without paying the people who worked hard to make the movie a reality.

Menus, of course, will take time to make. And translations also take time, although these are usually done for foreign country television broadcasts. One way to work around this is to have a given DVD not have translations nor subtitles, and saving all the extras for a "deluxe edition" that is released a couple of months later. Of course, international releases already have subtitles in the other languages, so a movie that has a worldwide release can fairly easily already have subtitles ready on the DVD.

Re:Time between theatre and DVD (1)

Spodie! (675056) | more than 9 years ago | (#12860511)

You have no idea what you're talking about.

Re:Time between theatre and DVD (1)

destiny71 (731278) | more than 9 years ago | (#12859409)

How long did it take National Treasure to go to dvd? a week? two?


Theatrical release date: Nov 19, 2004
DVD release date: May 3, 2005

Took 2 weeks shy of six months, which is the norm for most movies.

I worked in video rental for several years, getting out of it about 4 years ago. Six months was the time between theater release, and video rental release. It was then anywhere from a month to sometimes 3 months before it was available to consumers to purchase. Once DVDs came out, the biggest hits were available for purchase right away with rentals, but you had to wait for a VHS copy. Then just about every movie started being available right away for purchase, and the rental window was gone completely.

The reason for this time period, first of all, is to allow them to suck as much out of theater ticket sales as posible. But also, a couple months before video release, it's available to hotel PPV, and airlines.

You would find once in a while, that a really crappy movie that bombed would be released to video direct sales a month early. And on the same note, if it did great, they may hold off video release for a couple more weeks, adding on more theater runs.

Re:Time between theatre and DVD (1)

kihjin (866070) | more than 9 years ago | (#12859758)

How long did it take National Treasure to go to dvd? a week? two?

Before the theatrical release?

A few days... ;)

In related news... (0)

yotto (590067) | more than 9 years ago | (#12858888)

I am the bestest ever. At everything. Nobody can beat me.

What, I'm just doing what all these CDO's do. Tell you what, when one of these guys says 'Our business model is flawed. We're totally going to get taken over by another company' let me know, because /that/ will be news.

Most people... (1)

Cyan-Z (879583) | more than 9 years ago | (#12858892)

It doesn't matter if Amazon can break into the market or not. Most people who don't feel like going to the video store to rent or buy their videos probably just... err... "obtain" their movies online for free anyway.

Re:Most people... (1)

BewireNomali (618969) | more than 9 years ago | (#12858954)

exactly.

the bigger issue is the slow uptake for media center PCs. Plus, no one has developed a low to moderate cost media center appliance designed to go into your living room. It doesn't exist, so movie downloading as a business is in the air. At best, mail order movie rentals is a risky business to invest in. The ramp-up time to develop the business (and cost) might be a waste, as one can often not account for public sentiment.

I read an interesting article the other day about J.K. Rowling. She's decided not to release her latest Harry Potter book as an ebook. Her argument: her biggest audience (kids) don't like to read ebooks. WHY? Because no one's developed the right device for reading an ebook. Especially one cheap enough for kids to tote around. Adults read ebooks because they have a litany of devices and/or are will to cobble together a solution. I think it's a similar situation for movies. There's no killer appliance yet to take advantage of the broadband and the content. Downloading movies (I think the movie industry assumes) is a cobbled solution that won't work for the majority (the industry assumes are lazy) of consumers.

For the most part, a living room web-enabled media center that is the killer appliance in terms of form and function just hasn't arrived (at least I can't think of one that's ready for primetime). The other thing is that this device can't cost the equivalent of a high end desktop and it must be able to work with both high end HD screens as well as older tube screens. I'd invest in developing something like that.

Re:Most people... (1)

westlake (615356) | more than 9 years ago | (#12859334)

Most people who don't feel like going to the video store to rent or buy their videos probably just... err... "obtain" their movies online for free anyway.

My idea of "free" doesn't include broadband at $45/mo + a PC with DVD recorder + software + media + surcharges for gigabyte downloads over IRC or Usenet.

Re:Most people... (1)

jp10558 (748604) | more than 9 years ago | (#12859972)

But that's just it. Many people are willing to pay ~ $0.80 - $1 (USD) per GB to download stuff, even illegially. I'd guess that many would pay 50-75% more for the convienience of a HTTP download with a dl manger, which is a LEGAL download, of known quality from the studios, or a licensed business.

The big thing is that is far to cheap for the studios, but I'm not sure they can keep costs this high... There are too many people who know how and are willing to get Movies via net for $1 or less, and full first release DVDs (copies) for a cost of ~$5.

I know having legal movies is great but is the utility of legal worth 3-4x the cost of the actual product to many? I'd say it could be worth 50% of the cost, but not many times the cost.

Re:Most people... (1)

The_Wilschon (782534) | more than 9 years ago | (#12860552)

My girlfriend tells me her brother orders DVDs from Netflix, rips and burns them, and sends them back to get new ones as soon as he is done. Which is a little bit odd, as 1) unless I am mistaken (never having used Netflix myself, I very well could be) it does cost something and 2) he spends all of his time either doing that or playing FPS games and never actually watches any movies.

I've said it before and I'll say it again (1, Insightful)

CrazyJim1 (809850) | more than 9 years ago | (#12858910)

Next big thing will be direct to computer downloads. Sure people are doing it illegally, but if you make a store, it will make ph@t l3vvt. Just look at any itune clone for this. It won't just stop at movies either, it will be a virtual on demand for any television show ever made. Now how it will play out with many rights holders is the question. But undoubtably, in the next 20 years, home entertainment systems will be hooked up directly to the internet. If you think on demand from cable is cool, you haven't seen anything yet.

Re:I've said it before and I'll say it again (1)

GoddessEvilena (738870) | more than 9 years ago | (#12859596)

Dircect downloads shouldn't be the next big thing. There is nothing futuristic about this concept. Bandwidth is cheap enough now that highspeed connections are not much more expensive than dialup isp accounts. I am sure the bandwidth used for video would be much cheaper than mailing dvds around the country. If it takes 20 years for the infrastructure of entertainment industry to catch up, the United States will most certainally lose its worldwide monolopy on entertainment.

Re:I've said it before and I'll say it again (1)

alienw (585907) | more than 9 years ago | (#12859738)

Direct to computer downloads will prosper the day everyone gets a 100Mbit connection. Until then, the only people that will bother downloading movies will be the ones not paying for it. I think the next big thing will be Video over IP. The telcos are setting it up already, you can expect it to be everywhere you can get DSL in a couple of years. How about on-demand streaming of anything you want the minute you want it?

Re:I've said it before and I'll say it again (1)

timeOday (582209) | more than 9 years ago | (#12859962)

Direct to computer downloads will prosper the day everyone gets a 100Mbit connection. Until then, the only people that will bother downloading movies will be the ones not paying for it.
I don't see why. I have downloaded shows that looked great at 1 Mbit/s. Let's triple that to be safe. 3 Mbit/s is still less than I see fairly regularly during downloads. (That's still only half the bitrate of a DVD, but DVD compression isn't the most advanced, either). Why would 100 Mbits to each home be necessary?

I do think ISPs would have to beef up so more users could use that much bandwidth concurrently. But they already did the hard part of laying fiber to within a few blocks of most residences.

From the article: (4, Insightful)

Kiyooka (738862) | more than 9 years ago | (#12858912)

"Now Netflix CEO Barry McCarthy says that he doesn't see Amazon entering the online movie rental business in the US, putting ice on the idea that Amazon is naturally suited to the business."

There you go, cause and effect. What else did you expect? Do you think the CEO of Netflix would say: "the market is expanding rapidly with absurdly high profit margins and plenty of opportunities for newcomers. Amazon is perfectly suited to join the competition and can make tons of money with little alteration to their existing infrastructure. I'll be the first to welcome them with a handshake while we prepare to downsize!"?

Doesn't seem like anything out of the ordinary to me.

"As to whether or not Amazon and Netflix are in negotiations for a partnership, McCarthy said "my comment is 'no comment'." I think that statement is about as obvious as obvious gets. No doubt non-disclosure agreements are par for the course, but sometimes nothing is so revealing as a "no comment". Then again, that could be read as some kind of public invitation to Amazon. Idunno... this is /., somebody smarter than me help me out here...

Re:From the article: (1)

Tropaios (244000) | more than 9 years ago | (#12860529)

Be careful, your shoe is untied.

Hope that helps.

I guess I've got something else on my mind (0, Offtopic)

turg (19864) | more than 9 years ago | (#12858935)

I was skimming the article and where it said "Morgan Stanley Small Cap Conference" I thought I saw "Stanley Cup"

Re:I guess I've got something else on my mind (1)

Saeed al-Sahaf (665390) | more than 9 years ago | (#12859032)

I was reading your post, and where it said I was skimming the article and where it said "Morgan Stanley Small Cap Conference" I thought I saw "Stanley Cup", I thought "lame joke, move on..."

Re:I guess I've got something else on my mind (1)

Leroy_Brown242 (683141) | more than 9 years ago | (#12859160)

Hockey deprived?

Wow! (3, Funny)

slavemowgli (585321) | more than 9 years ago | (#12858938)

CEO claims company is ahead of competition! News at 11.

4 a month = useless. (4, Insightful)

sumday (888112) | more than 9 years ago | (#12859028)

with netflix and blockbuster, you can have as many DVDs a month as you wish, but only 3 at a time, right?

amazon's service only allows 4 dvds a month. and you're only allowed 2 at home at any one time. at least, thats what they offer in the UK.

now, surely the people that are most likely to use a service like this are going to want alot more than that in return for their monthly fee. i watch alot more that one film a week, and i'm only an amateur film buff. so if i were to get one of these services (which i may do in the future) i'd be getting the one that allows me unlimited DVDs.

i did the math, and using the amazon service, you're not saving alot by getting the monthly fee. and if you only get 3 in one month, you lose money compared to renting(assuming renting is £2.50 like at my local rental place).

and if you live near a good library, its even cheaper and you can keep the DVDs for a week.

i'm usually a great supporter of all things amazon, but they really need to rethink their business model.

Re:4 a month = useless. (1)

aldoman (670791) | more than 9 years ago | (#12859566)

Ah yes, but look at how Amazon places this. Go to Amazon.co.uk and search for a DVD. Just below the 'buy' button is an 'add to rental' button (and also below the picture and basic info is a huge 'rent this dvd' banner). They are going to get a hell of a lot of people which only watch 4-6 DVDs a month and for cheaper than one dvd they could rent 6 for a month. To most, that seems like a great deal, especially when you can keep each DVD for 15 days (on the 3 at a time, 6/month plan).

Their turnaround is also very, very good and their selection is unmatched. Compare this with the likes of Lovefilm and screenselect which are really suffering lately - 5 days+ to turn around 2 DVDs - at that point you are wondering why you are paying for an 'unlimited' service at all.

Re:4 a month = useless. (1)

bobbagum (556152) | more than 9 years ago | (#12859680)

Nope, you get 6 a month, 3 at a time, which is quite a bargain compared to normal rental shop which can be anything up to £3 per movie rented.

Re:4 a month = useless. (1)

jp10558 (748604) | more than 9 years ago | (#12859986)

IDK, I like netflix. I get 5 out at a time, with unlimited rentals, and turnaround of 2 days or so.

Re:4 a month = useless. (1)

dswensen (252552) | more than 9 years ago | (#12860932)

Netflix has more than one plan. You can have up to 8 films out for something like thirty bucks a month.

So depending on how much of a buff you are, you can have more films out.

I'd never move away from Netflix. I love their system, and despite hearing about other people having problems, they've been terrific for me. One cracked disk in many months of subscription, and that's the only problem.

Netflix has improved service (1)

unassimilatible (225662) | more than 9 years ago | (#12859139)

I thought Netflix used to suck, bad turnaround times, so I tried Walmart. Walmart's service was worse, and within a month, Netflix had bought them out. Netflix seems improved now, better turnarounds and they even work on Fridays, which they didn't seem to be doing previously.

Just signed up for Blockbuster's free trial to see how that goes.

Re:Netflix has improved service (3, Insightful)

SeventyBang (858415) | more than 9 years ago | (#12859378)

Blockbuster is going to have to do something to remain afloat. They still have brick&mortar stores to support and I don't think virtual rental is going to bail them out. The expenses affiliated with their hard stores cannot remain fixed and in order to offset them, those stores' revenues will have to increase just to break even.

An interesting question is whether Blockbuster will find a better business model than to mimic NetFlix. It was obviously an immediate counter-move to watch their market share disappear forever, but obviously not original. The result was merely price competition. That alone can't make or break a company because things such as customer service can easily outweigh it.

Blockbuster does have an advantage in the form of having local stores. This provides access to spontaneous rentals. Over time, some form of algebraic equation will have to be worked out to figure out the right mix of their online business model and the number of real-world stores. Too many or too few stores and the balance will be upset.

As far as Amazon's entry into the fray, waving a red flag in front of them won't guarantee they will move forward, but it certainly won't tell them to stay away, either.

There are going to be all sorts of strange statistics to make things interesting. Something which has held true (since forever) is 95% of the people who have access to cable have but a single provider [to choose from]. Otherwise, it's a dish. Pay-per-view is already available as a service but depending upon your provider (and location), the prices aren't always as gentle on your monthly bill as a visit down the street to Blockbuster. Fortunately, many systems permit 24-hour "rental" where you can play it at will, including rewind, fast forward, restart, etc.

As UWB (ultra-wideband) and other technologies (not cable modems) capable of either downloading or providing streaming movies could easily push Blockbuster's retail stores to the bring of survivability.

One of the bigger questions out of all of this - and it seems somewhat unrelated - is how all of this will affect the ability to put butts into the movie theatres. At least one recent survey shows a significant number of people prefer to watch movies at home. Admission price; food choice, quality, and price; and listening to babies cry, bored kids complain, and everyone else talk, surely cannot be factors in all of this, can they? Seriously, the quality and accessibility of home electronics has been cited as adding to the movie experience. (in addition to the other things I mentioned, IMO)

Re:Netflix has improved service (2, Interesting)

Ingolfke (515826) | more than 9 years ago | (#12859513)

Blockbuster needs to work out a deal w/ the MPAA to burn DVDs at their stores. This way you have access to the entire catalog of thousands of DVDs immediately. You'd still have to return the DVD which they'd use as inventory so they weren't burning a copy each time, only if they were out of stock. They'd also need to add kiosks for burning DVDs and use the current stores for renting video games, buying entertainment focused magazines and books, junk food, and providing movie catalogs with information about the all the movies in their catalog.

I had a Blockbuster pass that allowed me to rent two movies from my local store for as long as wanted, and I could return them and get two more. I canceled it b/c I rented everyting I wanted to see (and several movies that really REALLY sucked) and the new releases didn't make it worth my money to keep the pass. If I would have had immediate access to TV Shows on DVD (past and present... I like The Shield and The Twilight Zone), more independant and foreign films, and classic films and guides or reviews to help me find a movie I might like to watch I'd still have my pass and would keep it for quite a long time.

Re:Netflix has improved service (1)

timeOday (582209) | more than 9 years ago | (#12860022)

Blockbuster needs to work out a deal w/ the MPAA to burn DVDs at their stores. This way you have access to the entire catalog of thousands of DVDs immediately.
You are so right. This would also allow them to make late fees more lenient, since there would be no shortage of little round plastic disks to worry about.

They could even let you keep them as long as you wanted, or forever, so long as you had $20 on deposit for each DVD you had out at one time. If they were burning DVDs locally they could advertise this as an option instead of a shame-ridden penalty for "losing" the disc. I think a lot of people who only intended to rent would end up buying DVDs at $20 each from Blockbuster, which should be pretty lucrative. Nothing like nudging consumers into accidentally spending money.

My Comment (0)

Anonymous Coward | more than 9 years ago | (#12859151)

As to whether or not Amazon and Netflix are in negotiations for a partnership, McCarthy said "my comment is 'no comment'

So what he is really saying... (1)

kalislashdot (229144) | more than 9 years ago | (#12859155)

Amazon, buy me out so I can retire a rich man on a tropical island.

CFO, not CEO (2, Informative)

nsayer (86181) | more than 9 years ago | (#12859247)

Reed Hastings is the CEO.

Equity Marketing (2, Insightful)

Doc Ruby (173196) | more than 9 years ago | (#12859291)

NetFlix is in the classic "buy me" marketing phase: they see that their own infrastructure is dependent on shipping DVDs, but the immediate future is downloading/streaming data. Since they think Amazon wants to be in the DVD shipping business, they're telling Amazon to buy NetFlix, to buy entry to the "competitive market". If McCarthy is smart, he'll take his buyout money, and sink it into a streaming company.

Re:Equity Marketing (1)

n8_f (85799) | more than 9 years ago | (#12860069)

I think you're right that NetFlix is sending signals to Amazon that they want to be bought out, but I think you are wrong that there is no future in shipping. Downloading is undoubtedly the future, but not the immediate future. I think we are still a few years away before it starts to take off and with HD/BluRay, discs will continue to play a huge role for the foreseeable future.

NetFlix is afraid that Amazon will enter the market against them, leveraging their massive infrastructure, and they want to preempt that battle. It is very likely they would be a very good fit and provide a nice revenue boost to Amazon's bottom line.

Re:Equity Marketing (1)

Doc Ruby (173196) | more than 9 years ago | (#12860175)

Our disagreement depends on what we mean by "immediate". I don't think there's any other major development in "home video" between the current state of the art, NetFlix, and Internet delivery. In fact, NetFlix has been the only new development since BlockBuster genericized home video in the mid-1990s. At the time, BlockBuster looked short-lived, because of Internet distribution. But in 1995, we didn't realize how long it would take for the Net to get enough Americans broadband, and how long it would take Americans to learn to prefer video on demand from NetFlix and our cable companies. But we're through that now. I might be as wrong about the immediacy (not a timespan, but an event dependency chain) as I was in 1995. But I challenge anyone to suggest another intermediate step we've got to go through. And that doesn't mean Amazon buying NetFlix, or anything linear, merely quantitavely scaling like that. I mean an actual new market development, like the iPod/iTunes in music distribution. I'd love to hear how I'm wrong this time, because then I can make better plans in the meantime. Until then, though, I'm sticking to my plans :).

Re:Equity Marketing (0)

Anonymous Coward | more than 9 years ago | (#12860549)

If McCarthy is smart, he'll take his buyout money, and sink it into a streaming company.

Sink of course being the operative word. Are you by any chance the CEO of Amazon?

Re:Equity Marketing (1)

Doc Ruby (173196) | more than 9 years ago | (#12860555)

Maybe I am. Would you mind, AC, backing up your implication that streaming is a bad investment?

Re:Equity Marketing (0)

Anonymous Coward | more than 9 years ago | (#12860643)

First problem is quality. Your going to have a hard time finding people to buy streaming video if the quality is going to be blocky and blurry when you full screen.

Second problem is TV-Out. Many computers still don't have a TV-out, nor is it brain-dead easy for a normal user to set it up to work simply (nor is it worth the hassle to constantly keep moving their computer around to do so). The regular user will probably want to watch it on their TV because the screen is bigger and they would me more comfortable with the interface.

The next problem is bandwidth on the client side. While it would be nice if everyone was on the fastest internet around, there are still many users on dial-up, non-hispeed hispeed, and some services are still capped at 512 kbps download.

Assuming you get past all these problems,next issue is server bandwidth. With mail, you pay maybe a few pennies to send out each dvd (maybe less if multiple ones are ordered at once, not to mention that it probably does bulk shipments to a location before it sends out the individual ones). And you get to reuse the dvd once it gets back to you. With bandwidth, you have to pay a significant amount for each download. And what happens if the user wants to rewind or play the movie one more time? That just adds to the bandwidth costs not to mention also probably having to charge the user again.

If your service becomes popular, your going to find it hard to maintain the infrastructure - you'll have to add many servers and a lot of bandwidth - speed and capacity - just to maintain demand which just adds to overhead. Also, huge investement in storage would be requirement. Think order of terabytes to store all the data digitally depending on quality of course.

Next issue is how would you prevent skipping. Because even with my fast internet connection (3 mbps), I've had video skip. And that's not even the highest quality video. And what happens when a user has something downloading in the background . Sure, it's their fault. But a user will still want the kind of smooth problem-free experience you would expect with a DVD.

Finally, DRM. No publisher will allow it to be released with heavily enforced DRM not to mention that it would never allow this at all while the movie is still in theaters.

That is why I believe streaming is a bad investment. At least when compared with the current business of shipping DVDs. Downloading movies might be a different issue. But that again keeps the bandwidth and overhead costs. Not to mention, it's usually a hell of a lot more convenient and faster to go to the local rental store around the corner and pick up a movie than waiting to have it shipped or streaming/downloading it.

Just some food for thought.

Re:Equity Marketing (1)

Doc Ruby (173196) | more than 9 years ago | (#12860712)

All the quality problems you mention boil down to bandwidth. With enough bandwidth, 16bit, 24+FPS 800x600+ skipless video is a cinch. How much? 175Mbps uncompressed, which probably means 10-15Mbps compressed. Plenty of broadband systems around the world already deliver that, and even American systems are getting there: in NYC, 6Mbps cablemodems are the standard. And that means that a downloaded copy, rather than a synchronous stream, can be ordered as late as 15 minutes prior to a half-hour show, or 45 minutes prior to a 90 minute movie - or 90 seconds prior to a 3 minute video. Without leaving one's house, or perhaps ordered while at work, arriving over the Net at home before one commutes back there. Certainly faster than the several days through the mail. And current prices are $0.05:GB, which is $0.50 for a DVD-length movie. At current scales, with most of our national fiber still dark.

The server-side bandwidth storage problems you mention are exaggerated. You don't scale copies of streams or downloads by simply cloning the servers at the same central datacenter. At a single datacenter, you clone the traffic servers as relays, off a single (or backed-up) copy of the content, until you max the outbound pipe. Which these days is typically hundreds of Gbps, or ten thousands of simultaneous transmissions. Multiplied by many datacenters, distributed geographically/topologically around the Net. Then there are new approaches, like BitTorrent architectures that distribute the loads around the full capacity of the Net. And probably even others in development, just as BT was once new.

The same kind of innovation expectation applies to DRM, or other means of content control. As the article mentions, theatrical releases are much more quickly followed by DVD release, and increasingly race bootlegs already being distributed around the Net. When the distribution infrastructure evolves linearly, the content owners will scale up their competition with the bootlegs which take better advantage of the Net. It's only a matter of time.

Which is what investment is about. By the time my imagined Amazon buyout delivered McCarthy his investment bundle, it would be at least 2006. After a couple of years R&D, along with the rest of the market, he'd have to weigh the bandwidth cost:benefit, and the competition from unauthorized Net distribution, in 2008. By which time we can expect the cost:benefit, and risks, to pass the thresholds on which we now teeter. It sure seems like a better place to bet a $billion than sticking to shipping discs through the mail, which is going to look only worse over the next couple-few years.

Re:Equity Marketing (0)

Anonymous Coward | more than 9 years ago | (#12860804)

The problems aren't just bandwidth. It's also cost. Yes, some areas have 6 mbps connections. Their also very expensive, usally being the top tier in the offering - a price you have to pay on top of paying for the downloads. And that's on the client's side. You also have to provide several times as many streams on the server side - think on the order of at least thousands to satisfy initial demand as popularity is just beginning - prepare to scale significantly if it becomes popular.

And this dream of dark fibre becoming somehow a magical solution to bandwidth problems isn't an answer. There's a reason the fibre remains dark after over 5 years and so many companies went bankrupt laying it down. Turned out that last mile was a bitch.

Then, there's the capping issue which will become huge in the public if downloading movies gains any popularity. Either, they'll cut you off, scale back your speeds, or make you pay through the nose for every MB you go over. Each of these will severly limit how many movies you can download.

Futhermore, forget about the movie industry even allowing downloads to vanilla PCs in the forseeable future. Not enough hardware control can gaurantee that the movie cannot be transferred off the PC. And if you're thinking hardware DRM ala Trusted Computing, think again. Cause there's no way they can make that a requirement if they expect for the service to gain any kind of popularity, in the sense that there will still be a large portion of the population that will not have the latest gratest CPU with DRM capabilities.

And your telling me that having a movie download while your at work is a solution? A better one than stopping by the store on your way home from work and getting the actual DVD? There's a reason that the traditional rental method has remained as popular even though mail dvds are offered.

I don't disagree that internet distribution can be convenient - nor that the companies need to offer some kind of online service to help curb the current piracy problem. However, your simplifying it to a simple technilogical issue which can be solved by throwing money at streaming (I'm assuming in implementing infrastructure, not actually trying to develop a codec which would be pretty pointless cause there's a lot of good ones out already for any purpose you can imagine).

Also, as a sidebar, that resolution you gave is pretty weak - especially if your planning on people looking at it on a screen. And 16-bits? Compare this to how a DVD would look on a normal screen and you've got a pretty big discrepancy in quality. Furthermore, your assuming video quality will remain about the same. By 2008, you'll have HD DVDs or whatever the next format is and a lot of people will have HD TVs (people are more willing to upgrade their TV sets than computers). Now assume that you can get a residential service at 15-20 mbps for the price you pay now for the top-tier. You're still not going to get nearly as good quality streaming (maybe downloading, but it will still take quite some time). Not only that, but now your increasing the required storage size for downloading 1 movie, let alone downloading multiple ones. Furthermore, the costs on the distribution side have gone up severly as you increase cost.

Wow, that turned out to be a long sidebar :)

Not in the US != No Future (2, Insightful)

Xugumad (39311) | more than 9 years ago | (#12859309)

Okay, fine, Amazon.com may or may not expand it's DVD rental service into the US. I don't see how on earth it lacks a future if it doesn't, though? Its rental service seems popular here in the UK (I'm pleased with it, I know friends that are pleased with it, anyone got any actual numbers?), so it may not expand into other territories anytime soon, but...

So what, exactly?

Amazon will buy peerflix or some such. (0)

Anonymous Coward | more than 9 years ago | (#12859798)

The only thing that makes sense is for amazon to buy a similar service that was designed to scale without large infrastructure. Enter Peerflix, I've been reading a lot about it lately, and I tried it out... it's pretty interesting, although they don't have plans that accomodate heavy users (it's $1 per dvd) it works for me because I only watch like 5 a month. It seems to me that if Amazon were to buy a service like that and offer flat-rate pricing they would kick ass.

I'm still waiting for my Netflix+Tivo... (1)

doormat (63648) | more than 9 years ago | (#12859854)

I swear its the killer app of the late 2000's (as in from 2005-2009). Being able to rent movies over broadband is a killer app. Imagine Netflix's library available on demand. Fucking outstanding.

And? (1)

John Pfeiffer (454131) | more than 9 years ago | (#12860188)

Are we supposed to be surprised that he'd say this? I mean, was he supposed to say "Oh noes! Amazon is going to steal our market!" ?

General comments (1)

oncebitten (893231) | more than 9 years ago | (#12860391)

Forgive me, i'm a new /. poster, and couldn't figure out which thread to put this in (since it replies to multiple threads). Just some general comments: 1) With all the discussion of direct downloads, has anyone tried Cinemanow and/or Real's movie rentals? With the seeming convergence of media and computers (ie Windows Media Center Edition, Mythtv actually runnable on a $300 PC with realtime transcoding), maybe this actually is an "oh crap, we're screwed, buy us now Amazon". 2) In regards to the shortened release to DVD cycle, it mostly has to do with the fact that margins are higher on DVDs than theatrical releases (remember, cinemas make their money on concessions, not the movie). 3) Another reason why rentals are more popular might have to do with the fact that Hollyweird has released *crap* for years. I mean, come on, the comics that make up the big blockbusters have been around for what, 40-50 years? Try something original/interesting (and, yes, I am a fan of comic books), and stop releasing disposable crap. Why should i pay $10 to see your crap in the theatres when i can rent it for $3 later. As an aside, this will reduce piracy issues. I (and most other people) have no problems shelling out $$$ for Citizen Kane, The Matrix, etc, on DVD since I/we will watch them over and over again anyway.
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