iTunes Movie Rentals: It’s the Usability, Stupid

One of the best things iTunes Store has going for it is usability, but the Movie Rentals section (which, basically, doesn’t exist) is simply broken. The categories don’t let you filter for rentable movies, so (as of writing) it’s almost impossible to find movies to rent unless you just choose popular picks or new releases.

Next, the iTunes Store suffers a major weakness relative to Netflix which isn’t so apparent when shopping for music, but is horrible when looking at movies. Here’s a clue: Coyote Ugly is rated 4.5 stars, and the only reason it’s 4.5 and not 5 is that a few people are annoyed at the nudity in the unrated version (which seems a bit like complaining a nature documentary is full of animals). Meanwhile, “An Inconvenient Truth” is rated 2.5 stars owing to a huge number of 1 star reviews from, basically, insane people. (Rating it 1 star doesn’t make you insane, saying that the scientists quoted in the film have been disowned by the majority of the scientific community and the claims have been disproven by NASA does.)

Basically, the movie reviews are of similar quality to the reviews on YouTube, which is to say horrible.

Now that iTunes is competing head-to-head with Netflix, Apple really needs to lift its game in the reviews department. Netflix’s reviews are very well done — they basically weight reviews by people with tastes similar to yours more strongly, and reviews by other folks less strongly.

It seems to me that Netflix is to video what iTunes is to music — a very successful business that is undermining the way that the content distributors prefer to do business. A person pays NetFlix $20 (or so)/month and sees all the movies he/she can be bothered to see. After a while he/she stops going to movies and largely stops buying DVDs. When my wife or I see an interesting trailer, we usually just add it to our Netflix queue — thus making the studio, what, $0.25? $0.10? I don’t know how much Netflix pays for a DVD (including rights to rent it out), how long a DVD lasts, whether Netflix pays full replacement cost for damaged DVDs, whether Netflix pays royalties per rental, etc. etc. but I can’t imagine it all adds up to much more than say 25% of the cost of a DVD divided by 20.

The apparent high participation of studios in iTunes rentals reflects the fact that the studios are going to earn FAR more from the iTunes rental model than from the Netflix rental model (or Blockbuster’s imitation). For now, the iTunes rental library is slated to be ~1000 movies by the end of the month; last time I checked NetFlix’s library was 60,000, and there’s plenty of stuff that hasn’t made it to DVD.

If and when there are 1000 or more movies to rent on iTunes, I don’t think anyone will be able to find them. E.g. if I type “Robert DeNiro” into the iTunes search widget, it doesn’t bring up “RONIN” — one of the current top rental titles. If I search for “Pixar” it doesn’t find any of Pixar’s feature films.

Improving iTunes Rentals

Obviously, you need to be able to filter for movies you can buy vs. rent. I imagine this will happen pretty soon.

Next, the search function seriously needs to be fixed, and it’s something an intern could probably do in a day or two (while the library is so small), but it will become a bigger deal as the library gets bigger.

Apple seems to be stuck with a broken user review system — but I guess on the positive side it can probably all be fixed in one place (just look at the way the same system works in apple.com/store). One of the major problems with this kind of review system is that lots of people treat the system as a way of giving feedback on the shopping experience or some random other thing (like price, or upgrade policy, or whether some other product they’ve gotten confused with this product was good). For movies or songs where the price and shopping experience are (generally) fixed, this is probably less of a concern.

Then there are obvious synergies — such as discounting the purchase of a movie you’ve just rented (the way they discount albums if you already own tracks). This kind of thing will let Apple compete with DVDs and Netflix in ways that don’t let them fight back.

It’s the end of the (TV) world as we know it, and I feel fine

For ten years, I’ve been saying to friends and anyone else who is sufficiently immune to boredom that network TV was headed the way of commercial radio, and predicting it would be all over in five years. I was obviously at least five years ahead of myself. The proverbial fat lady hasn’t sung, but I believe that the television writers’ strike will be looked back on as marking the beginning of the end, a watershed moment.

Network (and indeed “standard cable”) television is dead to me, and I suspect many others. At its last gasp, it produced some of its best work ever — amazingly original television shows like Lost (season one, at least), and brilliantly executed retreads of old concepts such as Monk and Battlestar Galactica. Many television critics observed that television was entering a golden era, just as its audience began to disappear. And probably for just that reason. As network executives flailed about trying to figure out how to get ratings, it must have occurred to some that perhaps actual good writing might do the trick, and for a remarkable number of shows, it did.

But, just as a gas flame burns brightest when its supply is cut off, television has flamed out. The brilliant new shows have exploded as their hail mary concepts have been forced back into the tired “it must last five seasons of twenty-two episodes” formulae, and the writers and producers have leapt at each others’ throats in some kind of insane suicide pact. It’s worth noting that two of the best recent shows — Lost and Galactica — both nearly lost it with padded episodes intended to stretch their arcs to five seasons, but then made mid-course corrections and then cut their arcs to four seasons.

The underlying problem is completely obvious and perfectly analogous to the music downloading issue.

First of all, people want to watch good shows, and they prefer not to see ad breaks. They’re actually quite happy to pay for the shows without the ads — witness the huge numbers of TV shows selling on DVD. And they’re going to turn out to be quite happy to see “TV” shows which never get shown on TV (or perhaps only appear on TV as reruns — the way movies do).

Second, commercial television is an extremely inefficient mechanism for delivering content that people want to the people who want the content, just as it is an extremely inefficient mechanism for delivering relevant ads. Guess what? The exact same issues apply to commercial radio, radio advertising, and music. Premium cable is even worse, incidentally. It’s cheaper and more satisfying to watch the Sopranos, say, all at once on DVD than be strung out waiting for it to show in installments as HBO tries to tease out subscriptions.

How is this playing out?

Well, folks are buying the stuff they want direct from the source (or, as direct as they can), and ignoring the middleman. In this case it means buying movies and TV shows on DVD or from iTunes and ignoring commercial TV … in ever greater numbers. And the writers’/producers’ mutually assured destruction is just hastening the end.

Futurama has just gotten a new “season” purely driven by DVD sales.

I’m surprised that Stargate SG-1 didn’t continue as a pure DVD/iTunes venture, but I suspect that was more a consequence of writers’ fatigue than economics. Don’t be surprised if, say, Firefly comes back as a DVD/download-first, see it repeated on TV later, production. The economics aren’t incredibly difficult to calculate. Suppose that a studio gets 50% of iTunes sales, a show like LOST might cost $3M per episode to make and (currently) only make $250,000 from iTunes sales alone. But imagine if LOST were produced a bit leaner (e.g. it were made in Canada or Australia), had a rabid fanbase (OK, that doesn’t stretch your imagination much), and were coming out on iTunes exclusively one week before it was shown on TV.

This is speculation, but it seems pretty inevitable to me.

I’m currently watching seasons one to three of The Wire on DVD. This is a brilliant show that could never be shown on US commercial TV, doesn’t fit the network formats at all (1h episodes, profanity, nudity, violence, and 12 episodes per season).

The commercial television networks don’t have a big fork in their asses just yet, but their asses are probably tingling in anticipation.

NBC Universal and the iTunes Movie Store

This little bit of information is probably obvious to some people, but it wasn’t to me, and evidently has been missed by a lot of bloggers. Everyone who keeps track of Apple knows that NBC Universal pulled all of its video content from the iTunes Music Store. Depending on your various preconceptions, this is either a sign that Apple is doomed (of course) or that NBC is run by idiots (of course) or some random and elaborate conspiracy theory.

Today, on Sci Fi (which is part of NBC Universal), I saw an ad for Battlestar Galactica Razor, and noticed something interesting: it’s on HD-DVD. And suddenly, I realized exactly why NBC Universal pulled its content from iTMS. It’s Platform Wars, Episode IV: The Empire Strikes Back.

When you see HD-DVD, think Microsoft. When you see Blu-ray, think Sony, Apple, and most everyone else. That’s a little unfair. Some other companies with no specific Microsoft or Apple affiliation have simply been (or felt) forced to pick a side. Others, such as Toshiba, are trying to do to Sony what Sony has done to them. But you know from the existence of MSNBC that NBC has always leaned — hard — towards the Microsoft camp.

So it’s all about allegiance to the Microsoft DRM-everywhere camp.

I guess the “NBC is run by idiots” theory wasn’t too far off the mark.

The Amazon Music Store: Usability & Motives

Like many people, I like Simon & Garfunkel. And like a sizable proportion of such people, I like Simon without Garfunkel. And finally, like a not-so-sizable proportion of such people, I don’t mind Garfunkel without Simon. As it happens, I really like one of his most saccharine songs, “Sometimes When I’m Dreaming”. I’ve been looking for it for some time — I had it on vinyl, but I didn’t like Garfunkel enough to replace my vinyl with CDs, and I haven’t seen that specific pop song appear on ITMS.

Oddly enough, the album it’s supposed to be on is on ITMS, but that song is missing, and the album is not flagged as incomplete. Well, I thought, this is a great opportunity to try out the much vaunted Amazon DRM-free music store. Feel free to go try to find some stuff on the Amazon music store while I stay here.

Anyone claiming the Amazon music store is as convenient to use as ITMS (whether or not you have an iPod, I might add) is on crack. Oddly enough, it seems many of Apple’s uncritical “fanboys” are even bigger “fanboys” of anything without DRM and so have been singing the praises of a service that offers some notable bargains over ITMS while lacking range and convenience.

I’d certainly be very happy to buy stuff from Amazon versus Apple (once I *found it* using ITMS or store) to save money and/or avoid DRM — and I expect this is how Amazon will succeed — but Amazon should be recognised for the parasitic “Burger King” strategy it’s adopting on the usability side, and the motives of the cartel backing it which allow discounting and DRM-free music on the business side.

MacDonalds is famous for picking sites for its “restaurants” very carefully. Burger King is famous for placing its “restaurants” close to MacDonalds. Get the idea? Apple produces a market for digital music, fabulous tools for browsing, buying, and selling that music, and so forth. Amazon basically knocks together a half-assed website (e.g. when I tried to listen to tracks, it said I needed RealPlayer) but it offers discounts and no DRM. Exactly the way Amazon relies on brick and mortar retailers to let people browse and select books, it relies on Apple to let people browse and select music.

As for price and DRM-free music. Is Amazon offering the labels more than $0.70 per song? Apparently, the record companies which think Apple is greedy for only paying $0.70 per song in royalties out of its $0.99 less operational costs, R&D, marketing, etc. are OK selling songs encoded at double the bit-rate, DRM-free, for $0.10 less. Well, maybe Amazon is paying them a larger percentage, so let’s look at Apple’s DRM-free offerings ($1.29 each): presumably the music labels prefer to be paid some percentage of $0.89 by Amazon than $0.91 by Apple for the same track.

Wow, what does this sound like? It sounds like dumping! The most classic form of anticompetitive behavior by a monopoly or cartel (and the record labels are in fact both — since only one label has the rights to, say, Simon & Garfunkel’s music, and music by, say, Sting, isn’t a substitute). So what we’re seeing here is Amazon acting as a stooge for the music industry which would like to break the power of Apple’s ITMS by dumping their music through a rival channel.

Well, I wouldn’t be too concerned for Apple. First of all, Amazon has been selling stuff through its website since, what, 1995, and the user interface has been very slow to improve. Based on the current gap in usability between their MP3 store and ITMS, it will take them approximately forever to catch up, long before which Apple’s usability folks will have incorporated telepathy and precognition into ITMS.

In the long run the music industry is, to put it simply, dead. They can thrash around suing teenagers and setting up gigantic anti-competitive dumping grounds to what we can optimistically call their hearts’ content, but in the end, music has gone digital, digital stuff is easy to duplicate, and the music industry (as we know it) is an artifact of technology (vinyl records and CDs) that is obsolete. It didn’t exist before we could record stuff, and it shouldn’t exist now that recorded stuff is trivially easy to duplicate and broadcast.

Licensing iTunes/iPod Compatibility

Wouldn’t it be interesting if Apple allowed third parties to support iPod and iTunes right about now? Creative, Samsung, et al, must just be thrilled by the Zune announcement.

Or maybe just wait for Zune to come out, wait until Microsoft has spent a billion or two getting up to, say, 20% market share, and then do it.

Just a thought.