How Netflix can beat iTunes and Lovefilm in the UK
These days buying books and music online has become normal, common practice. And with iPlayer leading the way, we’ve become regular consumers of catch-up TV in all its forms. Yet downloading and streaming films remains far less common. There’s no shortage of services, Apple (iTunes), Amazon (LoveFilm), Sony (Video Unlimited), Microsoft (Zune on Xbox) Sky, Virgin and many more offer films on-demand, but the selection and prices often leave something to be desired.
In other words, Netflix has a chance to completely transform on-demand films in the UK. To do so, though, it’ll have to achieve the following things…
1. Have a good back catalogue of classics
When deciding on a film to watch, you might wish to eschew the most recent releases in favour of a classic. Perhaps you’re in the mood for a bit of The Godfather, or maybe 12 Angry Men. Our research shows that you might be out of luck. Using the IMDB top 10 rated films, we found that very few were actually available to rent. These aren’t obscure cult classics, but titles such as The Shawshank Redemption and The Good, The Bad and the Ugly.
iTunes did have most of the top 10 available, but only to purchase.
If Netflix can offer a comprehensive back catalogue of older titles, not just the latest blockbusters, then consumers are more likely to turn to them for their film downloads.
2. A more compelling subscription model
Currently, the online subscription content offered by sites such as Lovefilm is fairly lacklustre. Users on the lower packages have an allocated amount of time each month, which can be used to stream online content.
However, if they wish to watch anything recent they must pay extra. The library of films provided within the package is fairly weak, and doesn’t contain anything that you couldn’t catch on a Thursday night on ITV 2.
If Netflix can produce a package that includes a half-decent library of older titles, as well as allowing viewers to watch some more recent titles online as part of their subscription with no extra cost, it will allow consumers more flexibility than what’s currently on offer.
3. Offer more HD content
Of all the online rental sites we looked at, only a couple offered titles in high definition. The most consistent was iTunes, which was able to offer four out of the ten most popular rental titles in this format, for an extra pound (£4.49 instead of the £3.49 for SD). With the increase in large monitors and popularity of streaming content to connected TV’s, it’s about time viewers had more choice as to what quality they can rent their films in.
4. More competitive pricing
We looked at the prices of the top ten rental films across most of the online rental sites, and it would be fair to say that pricing was barely competitive. Let’s say you wanted a bit of comic book hero action and wanted to watch Thor. You could rent it from iTunes for £3.49.
Or from AceTrax for £3.49.
Or BlinkBox for £3.49.
Or Sky Go for £3.49.
Or Virgin Media for £3.99.
OK, there is some small variance in pricing, but it doesn’t go far enough.
If Netflix can offer titles at aggressive prices and under cut their competitors, consumers will get a better deal, and it would also stimulate the rather stagnant pricing structure of online rentals.
5. A better deal on purchasing to own
Purchasing digital media over physical discs always poses some issues. Should we pay less for downloads, when there are no actual production costs involved? There’s the argument that digital distribution has costs not associated with producing discs, such as server space and implementing distribution systems, but even in view of this, we still need a competitive online market.
At the moment, this just doesn’t exist online. Very few sites offer the facility to purchase films to own, and the pricing between them all is nominal. Not only this, but it’s usually cheaper to buy the DVD itself. During our research, we looked at 20 films, and only one was cheaper to purchase digitally rather than physically.
We’re undoubtedly moving towards a digital future, and cheaper prices for this content would help us get there a little quicker. The games industry has known this for years, and digital delivery platforms like Steam regularly undercut the prices of discs, as well as regularly offering sales and special offers.
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