Apple CEO Steve Jobs sang a familiar tune this month when he described a big selling point for his newly revamped Apple TV. The device, which connects TV sets to the Internet, will make it “really simple” for people to rent movies on demand, he said.
Maybe it will be simple. But the cascade of new products, policies and pricing schemes for watching movies at home is making one of the USA’s most popular pastimes “quite baffling to consumers,” says Tom Adams, president of research firm Screen Digest.
Media, tech and retail companies are jockeying to control home video as the curtain falls on the 25-year era when the business was dominated by bricks-and-mortar video stores led by Blockbuster.
Instead of visiting a store to rent a new film on DVD — which began to replace VHS tapes in the late 1990s — consumers can obtain discs from mail-delivered subscription services and vending-machine kiosks. And there’s an explosion of new opportunities to watch movies on demand via a cable, satellite or Internet service.
The pace of these changes mystifies some consumers. Hollywood studios are adding to the confusion by upending their patterns for releasing movies. They’re experimenting with strategies that will encourage people to continue to spend $15 or so to buy a disc — or pay $5 or so to rent a DVD or to watch a film via VOD.
There’s a lot at stake. Home video sales and rentals account for about 68% of the $38.4 billion that U.S. consumers will spend on movies this year, consulting firm PricewaterhouseCoopers estimates.
Yet the home video maze may get crazier before it becomes simple again.
“There are a few years (left) of sorting out the winners and the losers” in the new home video era, says Bo Andersen, CEO of the Entertainment Merchants Association, a trade group…