Is downloading cult movies the future for smaller companies?

"I am that anal when it comes to collecting that I would like to have something in my hand that I could put on the shelve with the rest of my collection."

Me too. I would still rather have something on a shelf.

What has happened to the recorded music industry will eventually happen to the home theater market. Downloads will reduce the demand for packaged movies across the board, and companies that offer pay downloads will ultimately be competing against free downloads of those same films. The niche players who want to survive will have to know their customers extremely well and provide value-added product that appeals to these customers (e.g., limited editions, special packaging, physical extras, etc.).

No, physical dvd's are the best way.
As you said the problem is piracy, the only way i see them getting around piracy for a while atleast is to print unique identifiers into the data of each individual sale but im sure that this would be circumvented within months at most, and that sort of technology isn't cheap to produce so unless protection is changed every couple of months (not cheap) they would have a real hard time stopping this.

Thats why physical copies of media is the best way....because a majority of consumers only motivation for paying for Movies is the collector element i.e the nice Boxsets with collectors cards or soft toys or simply the nice sleeves for display, this is the best defence against piracy i understand that the smaller cult distributors are disappearing but isn't that the nature cult cinema? only a select few are willing to pay for this stuff.

Rodney got there before me :)

Personaly I have never understood people who pay for a product and then offer it free for others. I have friends who have asked me to lend them my films so they can copy them but I always say that why should you get it for free when I paid for it. Fuck that shit.

I'd be only interested in legal movie downloads if those would be DVD-5 or DVD-9 sized, whatever the film and number of extra features demands. I would never, ever pay money for a 700MB MPEG file with horrible compression and no extras. Well, I would pay for something like that if it were a download for a recent theatrical release movie because I'm really fucking sick of having to wait months for releases just because I don't happen to live in the US. But that aside, when it comes to something like cult movies I'd want the downloads to be the exact same quality as the DVDs in stores and I see that as a big problem. Many people - more than you'd think - are stuck with internet connections that simply don't allow them to download 4.5 or 8.5 gigabytes of data overnight. And until that's resolved in another 10 years or so the companies would opt for the crappy 700MB downloads. And in 10 years the people with fast connections will demand HD or BD downloads or whatever new standard is around by then and again the bulk of people won't have the necessary connections... Nah, I just don't see this working in any way.

By the way, the most costly part for the small labels actually isn't the production and pressing of the discs but rather the DISTRIBUTION process. They have to sign with a huge distributor who takes care (ideally) of getting their discs into stores and into the catalogues of online retailers. And for that service they charge insane percentages that are killing the small labels.

Same here Caterpillar. I'd be interested in seeing this happening if the material would be in the same quality as DVDs.

The problem with having a movie collection on the harddrive is if something goes wrong with the pc that could be the end of your precious collection not to mention the cost of replacing the films.

"Remember when laser disks used to cost over 100 dollars per disk?"

Er... wait a minute, what kind of argument is that? Laserdiscs were ridiculously overpriced and nothing to use as an example.

In my opinion, the paying to download films and the video on demand stuff on cable will only have so much of a market. For movies, I think only the big blockbuster titles will make money as downloads. Spiderman, Pirates of the Carribean, Etc. I just feel like the cult type stuff will get lost even more in a sea of Hollywood product. I think downloading's strongest aspect will be TV shows. Everyone misses TV shows, and they want to watch them when they have the time and not be forced to watch them when they are scheduled. The DVR's have really helped that, but if its a show you forgot to record or heard about later on then you can't get the old episodes until a DVD set gets released.

And as far as the cult DVD companies go, the most costly aspect of releasing titles is the license fee. The distribution fees are nothing. The distributor only gets paid if your title sells. If it doesn't then they don't get paid. Their percentage is a fraction of the cost of everything else. The main two costs are license fee, followed by production.

No. Or at least it's not the answer for me. Any pay movie downloads are going to be so burdened with unrealistic restrictions on their use that they'll be effectively worthless. Can't take it to a friend's house? Won't buy it. Requires the latest piece of crap Microsoft operating system to watch it? Won't buy it. Quality is inferior to current DVD quality? Won't buy it. Can't burn a DVD to watch in a room with no computer? Won't buy it. Can only watch it in one specific software player? Won't buy it. Any aspect that represents a downgrade in convenience or quality from the way things are now is an absolute deal-breaker.

Geoff. How so? If people were willing and able to put down well over a hundred bucks for a disk then why are we complaining today if a disk loaded with extras is around 30 bucks? Especially in the collectors market which fuelled the laserdisc to begin with.
We are so used to disks being cheap that we are more unwilling to pay for a good DVD release unless it has insane amount of extras. And since we fans are such a small piece of the whole puzzle it often isn't worth the cost for these companies, especially if it's getting more and more difficult to get good exposure in the larger chains. This is why so many of the smaller companies are going under, the huge cost of gather material for the special features and lack of general exposure outside the collectors market. The laserdiscs had very few extras to speak of but people still paid huge amounts for them.
Laserdiscs were pure collector’s product and not many households had the technology. When the DVD took over far too many companies started to flood the marked with cheap discs. Anchor Bay and others had to tempt us with extras to get us to buy their release instead. Then we start to complain when they dare to expect us to pay for them. We are getting spoiled. So that’s why I think it’s a good idea to offer downloads for films because it will eliminate the cost of manufacturing the disc, printing and packaging and also distribution. But I wonder if that would be enough to change anything.

Rhythm X. This is exactly what will most likely happen if this ever goes through and I totally agree with you.

i think films on DVD have both suffered and benefited from a couple of key mistakes by companies, or at least the lack of forethought - one, is that there was never any central studio-based control over their own material, leading to the variety of companies handling material and the subsequent appearance of jumping on the bandwagon and reissuing in eternally different editions from across the globe. secondly, the size, weight, relative quality and cost of DVD opens the doors to these things winging their way across the globe to bypass border controls (DVD regions) and marketing campaigns - everything that goes with that too.

there's also a huge variety in where each film fan began their interest, and the perceptions that go with those timescales have a variety of impacts upon their buying habits; people buy so much, partly because of price and partly because of the broader availability - i too think it's resulted in a frivelous treatment of foreign and odd films (mainstream too, but that's not the focus of my efforts) that has them as trashy novelty rather than something given full, honest consideration before a final personal decision can label it 'trash', but it's also resulted in a huge leap in how realistic and grounded people can view non-domesticly produced films, how we can naturally integrate them into a taste without them being a novelty that would be much more rarely experiences in the days of laserdisc and VHS.

the internet is perhaps the third key factor in how things have worked over the last decade - sure, there's a exponential growth of internet usage, but it entered what could be considered a fairly mainstream and wide use (though of a lot smaller size) a good five years before DVD really began to take hold. the discussion online results from the obscure nature of good information on films that have suffered from a cycle of easy come, easy go treatment by film studios - hence the cycle of outdoing themselves, to some extent, because of the need to drive the interest in product along at an all-encompassing week-by-week level that's evolved into a fight to have a good opening weekend and nothing more until the time for sell-thru or rental arrives.

if only small companies didn't head for the holy grail, and instead built their way through the cheap, easy, ravenously interested small(ish) online communities in order to build on a larger, more realistic market, rather than hoping that there would be a sudden interest in several million customers browsing walmart for obscure 70's european thrillers.

as for downloads - i think you'll end up with an initially confusing spatter of companies that will suffer from an even more complicated and unresolvable set of connected issues (cost, right-to-burn, quality and quantity, obscurity and ease of how we locate the best editions) that might end up with few companies dominating, but most importantly to me couldn't technically stifle the cross-borders effect that foreign and strange films have benefited hugely from. yes, it's not without a small band of dedicated importers, foreign viewers, region-code hackers that the market for remakes, foreign licenses, and all the growth in knowledge about films that goes with it, has grown. that might suffer more dramatically in a download age, making for the other half of the two aspects i most fear about an abandonment of hard-copy editions.

"Geoff. How so? If people were willing and able to put down well over a hundred bucks for a disk then why are we complaining today if a disk loaded with extras is around 30 bucks? Especially in the collectors market which fuelled the laserdisc to begin with."

I'm sorry, what's your argument here? People were silly enough to pay for laserdiscs so they should shut up and hand over their hard-earned for sub-par releases that will be obsolete in a year anyway because the company will double- and triple-dip simply because they don't cost $100 anymore? Laserdiscs were ridiculously expensive because nobody bought into the technology. We had a laserdisc player. Hell, we still do. We have about 10 laserdiscs. I have over 400 DVDs. Does the low price of DVD encourage this? Of course it does.

As for all this releasing online to avert printing/packaging/etc costs: Pressing a DVD costs practically nothing. Printing? Practically nothing. Distribution? Practically nothing. Furthermore, releasing online does not mean you don't pay for distribution. Bandwidth costs money. Setting up new services costs money. They'll also have to pay a lot of money to whatever company they go with to provide the crippling DRM.

This idea of online distribution for movies does not work. Especially as the quality increases to hi-def, you would have to download 4+ gigs per movie. This is simply not feasible right now.

Lewis,

People weren't "silly".

Laserdisc was the only way you could experience your favorite movies in a way which somewhat resembled the cinema. Remember that VHS was the only alternative, and if you were rich enough and fan-obsessed with Star Wars or Aliens, shelling out THAT amount of money was cheap when you compared it with buying a cinema.
When Laserdiscs started to appear with novelties like "director's cuts", "commentaries" and other "extras" that was nothing less than revolutionary.

So people weren't silly investing in Laserdisc 6 or 7 years before its cheaper and better nephew DVD arrived. If you were in the movie industry it was often the only way you could do decent research (remember the Pixar team referencing the Ghibli Laserdisc collection whenever they were in an inspirational rut for Toy Story).

The most you can say of those people is that they probably had more money than you or me at the time.

well i guess, not now but soon it might be like this. bandwidth is geting cheaper and internet faster. whats normal now? 3mbit? 10mbit? something like this. so 5gig takes about 3 hours. no prob so far. the collectors who want a steelbox in their shelves wont download movies. but for some titles id wish to be able to download them since theire impossible to get (except some lousy vhs rips on ebay). if there are people who want this it will come...

Off topic a tad in the first two points, but a couple laser disc stories (while I procrastinate further from finishing my Hot Fuzz Review):

1) My love of anime, and probably my gateway into Japanese cinema came from laser discs shown publicly at the university of Waterloo (and co-incidentally, the owner of those discs -who I never met at the time- is a reader of this site...small world). I could never afford them but anytime someone was demonstrating or having screenings I was there, it was magnificent when combined with a projector (this is around 1994). I also had the treat of seeing Blade Runner projected off of a laser disc in 1994 and that was breathtaking after watching the ratty VHS copy I had because somehow I missed the re-release of BR into the cinemas in 1992.

2) There was a video store that used to dub the laser discs with directors audio commentary on (like say The Usual Suspects, Clerks, etc.) directly to VHS and rent the copies. If that didn't drive my already thriving love for 'digging deeper' into the films I love and prime me for massive DVD spending, I don't know what did.

These days, I don't spend as much time as I'd like listening to commentaries or viewing extras (Although recently I sat down with Paul Verhoeven and Ed Neumeier's STARSHIP TROOPERS commentary - It is compulsory listening, I assure you!). But If I become obsessed with a film, I'm happy to know it's there.

As to downloading cinema, it's another 3-4 years minimum before mass adoption. The Dual-layer DVD-burners have to be wide-spread and Dual-Layer discs have to be

I'd love for there to be a sign in account that let me download the movie multiple times once I bought it. That'd solve the 'hard drive crash' problem, if your account kept a record of films you 'own' sort of like a database backup of titles you are allowed. There just has to be a level of trust between the e-tailer and the customer, and until big business is willing to acknowledge that trust, there will be the annoyances Rhythm-X mentioned of DRM and restrictions which prevent any sort of customer adoption. The key to any new technology being adopted EN MASS is simplicity and convenience over wow-factor or innovation. DRM is the showstopper as much as anything.

(wow, longest comment ever, just goes to show what procrastination will do)...

Bob Michaels, the licensing cost thing totally depends on what sort of material your company is putting out. If it's anime (some of which is released by smallish companies) then yes, the licensing costs are the biggest issue. If it's obscure Japanese gore flicks from 25 years ago then you can forget about licensing costs. These things are usually very cheap. It's indeed the distribution process that's killing these small labels. If, say, 60% of your profits end up going to Genius or whoever, it becomes kind of hard to survive.

To put a spin on my earlier point, and this is not an ad, Jaman delivers 716x484 (DVD = 720x480) film downloads from master sources for rent or sale at about 1.3 GB for a 90 minute film. With decent U.S. home broadband, you can probably download that at a speed of 30-60 secs at minute. On top of that, they seem to be on top of some interesting content (i.e., most of the Celestial Shaw catalog). Amazon has the same type of deal w/Tivo but I understand the sourcing, thus the resolution, is not as good. I think we are at "beta" on this technology and there is enough money and brains behind it to push it to the "alpha" stage pretty fast.

The New York Times had a nice article similar to this in their Sunday Arts section two weeks ago. I tried to find a link to attatch here, but the bastards want $4.95 for the 'archived' story.

I'm guessing it's the same article that was pasted in the forum section here.

Yep, that'd be the one.

I have a close relationship with a DVD label, and it's hard for these types of companies to survive right now because they aren't moving enough product. The main reason they aren't able to do this is because most of the smaller stores that people who purchase these types of product have closed down. Best Buy is the only player pretty much right now and they completely changed their policies about what they carry. Same thing with Borders, they cut back ordering most of the smaller companies titles. And as far as a any license goes, trust me there is no such thing as a cheap one. It doesn't matter if the movie is 1 year old or 40 years old. they want top dollar because its the USA and when they see the USA, they see dollar signs.

bobmichaels - grady hendrix mentioned licensing costs, not long before kaijushakedown went away, he said that they were very high and that companies said something similar to what you are, "it's america, it has a lot of people". forgets that a) that's a potential audience, not an actual one, and that b) if it's not released, it has no audience, let alone either a large or small one. worth noting though, that as discussion is connected heavily to the internet, so should publicity (trailers? what are they?!) be a part of this, as purchases mostly are too - one website is closer to another than any shops are ever going to be, and they go from country to country, home to home, with such ease.

It's true that ever since the license for VERSUS sold for $100.000 the Japanese especially think that they can charge that kind of money for pretty much anything. So if certain high profile Japanese films don't come out in the US anytime soon, chances are that it's because of this. Just do a bit of math and try to figure out how many discs an US label would have to sell to break even on such an investment...