The idea for serving video-on-demand has been around for a while. You may have noticed it first when you were staying at a hotel years ago or on your cable television system. The quality and convenience was good and the price was generally competitive with the old bricks-n-mortar video rental shops. The only limitation was the number of titles that were available, which was usually well under a hundred. The selection was also limited to second-run features: New releases and older movies were not typically available. Broadband Internet changes all of that... (MORE)

We're not talking about crappy amateur videos at postage-stamp resolutions, either. New video-on-demand (VoD) services are delivering movies and television shows with quality that comes very close to standard definition cable. And, in some cases, you can even get HD-quality movies that are better than cable and better even than DVD-Video. Prices remain extremely competitive and while actual delivery is an important factor, technical details like bandwidth are clearly minor hurdles that only need improvements in existing technology to clear. Better cable Internet? Better DSL? Fiber? Wireless?

The real news here is that VoD services as a whole offer quality, convenience, price and selection. As I write this in mid-Summer 2008, there are litereally tens of thousands of programs (movies + TV shows) available with a click, many of them entirely free to the viewer (i.e., ad supported, just like television).This truly revolutionary change is perhaps the biggest shift in home entertainment since the VCR invaded the living room 30 years ago.

Remember the VCR?

The parallels to the VCR are significant, and although it took some time for the  VHS VCR to go mainstream, the resulting shift in viewing habits was dramatic. Movie rental shops popped up pretty much everywhere and, for the first time, thousands of movies became available outside of the movie theater and on-demand. Granted, "on-demand" meant about a half hour to drive to the store and pick out a title. The video cassette recorder was also the first time-shifting device that allowed people to record broadcasted programs and watch them later. Considered in this sense, DVD-Video discs and TiVo are only incremental evolutionary improvements in home entertainment, mostly in terms of convenience. VoD services, in contrast, are a radical revolutionary shift away from how we've watched television and movies for the last three decades.

VoD Kills Blu-ray and TiVo

I've been provocatively saying that  VoD was going to kill off HD DVD and Blu-ray for about two years now. Truth be told, when I first made that argument, I was mostly just being contrarian. And although I always thought that eventually VoD would be the future (the same way flying cars are in our future), I didn't think it would happen so quickly. Even seven months ago, I thought we might still be a couple of years away. Now it's looking like the Death of the Disc really is here and now. And not just the end of Blu-ray, but the end of the DVD and the end of physical media itself. This is a huge shift that some people are going to resist, especially collectors that enjoy owning a physical library of movies in their home. It is true that there will always be diehards that genuinely enjoy a cup of coffee and the newspaper at the breakfast table (Sunday morning at least), but what is the point of reading the news on dead trees a day after it was news? Likewise there's a certain nostalgia to owning and reading a real book that technology cannot replace, but when we are talking about movies, especially on tape or disc, we are already talking about technology and it's hard to see how anyone could possibly be nostalgic about plastic discs that have only been around for a decade or so anyhow. The music industry is probably the best comparison here: When's the last time you bought a CD at a store?

VoD may very well spell the doom of TiVo-esque DVR devices. Physical, local storage of some content is going to be with us for some time as a necessary part of streaming and on-demand technology, but what is the point of recording that syndicated episode of Seinfeld if you can just go watch it anytime you want on demand? Indeed, TiVo and Amazon have already teamed up in this area, offering Unbox VoD with a click of the TiVo remote. As VoD offerings expand to include all telvision show and movies, the only use for a DVR might be sporting events. Even then, how much longer will it be before yesterday's game is available on demand as well.

Invading the Living Room

There is one final technical kink to broadband VoD and that is the magical force-field barrier that keep the computer out of the living room. All VoD services require some sort of computer and some still require an actual traditional general-purpose Windows or Apple machine.To be honest, no one but a super geek wants to have to boot their television, much less have a beige box humming away like an idling Cessna hooked up to the TV. So a mountain of dedicated devices have accumulated in the Convergence Junkyard over the past six or so years (remember WebTV?) and it looks like a few more are headed that way, including AppleTV and maybe even the yet-to-be-released Amazon and Netflix standalong boxes. It's hard to say exactly where this is going, but I think there are two clues that might point to success.

There are two VoD devices that have already made a stealth run into the living room successfullly and are likely there to stay. First, the gaming console, specifically Sony's PS3 and Microsoft's XBox, but you can bet Nintendo can't be far behind. I'll have a little more to say about those technologies in just a moment in terms of actual service, but these are first and foremost gaming devices. Claiming that they are Blu-ray players or VoD servers misses the actual point of the product and gaming consoles are unlikely to ever catch on as a universal device the same way DVD players did.

The other stealth invasion VoD device is the cable box (or satellite reciever). Whether that just a dumb-terminal channel changer and decoder or a full-fledged multi-tuner DVR, everyone's got a cable box that already serves up a lot of VoD content. As a ubiquitos part of modern television viewing, it is very easy for a cable operator to simply offer up a new cable box with new features for a couple of extra bucks a month. And since your cable company is also very often your Internet provider, it's hard to see how the cable box won't ultimately become the VoD hardware of choice for most people. Still, standardization is a big issues and, right now, the lack of standardization is actually a huge advantage for VoD.  

{mospagebreak title=p.3 The State of VoD Today} 

The State of VoD Today

While I've been a VoD evangelist for a couple of years now and have been covering the very rapid changes we've been seeing over the last six months, I took a step back the other day and realized: VoD is here. Now. But instead of looking for a victor in the VoD wars, my moment of "Ah ha!" came when I realized there doesn't need to be a single winner and, in fact, the chaos of competition is what makes VoD successful now. While there isn't a single VoD source that has everything you want to watch, combined together almost everything you want to watch is available VoD or will be before you know it.

So let's take a look at the State of VoD today. It'd be nice to think that this survey is at least somewhat complete and up-to-date, but with how quickly this is all changing, this is actually an exercise in futility.

Chaos and Control

Part of why this is so neat is that the chaos doesn't tie you into any particular compay's hardware or service. Hulu and iTunes, for example, are pretty much universally available on any computer. Check Hulu first to see if you can watch for free and if they don't have it, fire up iTunes and pay for it. Do the services compete? I guess, but as a viewer, I don't care. I mean, it's not like you need to drive all the way across town to Best Buy because Walmart didn't have the movie you wanted. The only stumbling block I see here is the subscription-based services: Who can afford more than one of those? As long as it comes along with some other service you are already paying for (e.g., XBox, Netflix), it might work, but in the long run, people just don't want to pay subscriptions for Internet service sites. 

In any case, the list above is not comprehensive. New services have already been announced, the catalogs continue to grow, quality will go up and pricing will change. Just to leave you with one final interesting link to help sort out all the chaos: 

http://www.blinkx.com/

Blinkx is an ambitious aggregator or index of all video on the Web, but mostly news and television. Who knows if this will succeed or just be another blink in the rise of VoD?

References:

• Death of the Disc: How Blu-ray Lost the Format War January 21, 2007.