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Businesses The Internet Movies Television The Almighty Buck Entertainment

Online Streaming As Profitable As TV, Disc Sales By Charging Just a $15 Flat Fee 160

Posted by Soulskill
from the all-about-the-benjamins dept.
Lucas123 writes "A new report shows that if movie production houses charged a $15 monthly fee to just 45% of the world's online subscribers, they could rake in just as much cash as they currently do through TV downloads and disc sales. That equates to $29.4 billion. 'Movie producers have little to fear from online distribution in the long term,' the report states. 'It is the distribution part of the movie business that should be worried because online distribution will replace a sizable portion of their current industry.' According to the report's hypothetical model, the $15 fee would offer open access to all movie content — meaning instant online access to all movies that have been ever produced, 'along with new releases as they come out.'"
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Online Streaming As Profitable As TV, Disc Sales By Charging Just a $15 Flat Fee

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  • by rodrigoandrade (713371) on Friday January 24, 2014 @12:25PM (#46057909)
    That's the excuse MPAA will use now.
  • But greed. (Score:5, Insightful)

    by i kan reed (749298) on Friday January 24, 2014 @12:26PM (#46057937) Homepage Journal

    With this, then they can't double dip. They wouldn't be sell the popular ones, while dumping the unpopular ones on netflix for the fees. And there might be incentives other than spectacle and marketing in the development of movies, and we can't have that either.

    • by Wycliffe (116160)

      This only goes so far. Many people (like myself) don't subscribe to Netflix because the content is crap.
      I would gladly pay $15/month though if I had access to any movie/show ever made. I like that the
      selection is slowly increasing but there are still alot of the content that is so expensive it might as well
      not be there. Who really pays $2 an episode for a 10 year old tv show? They would probably make
      10 times the money if they charged $0.50 an episode instead. I would also be content with a service
      that

  • by Anonymous Coward

    They do this and I'll stop pirating!

  • by phantomfive (622387) on Friday January 24, 2014 @12:30PM (#46057981) Journal

    the $15 fee would offer open access to all movie content — meaning instant online access to all movies that have been ever produced, 'along with new releases as they come out

    That's not going to happen

    • by CanHasDIY (1672858) on Friday January 24, 2014 @12:46PM (#46058211) Homepage Journal

      the $15 fee would offer open access to all movie content — meaning instant online access to all movies that have been ever produced, 'along with new releases as they come out

      That's not going to happen

      Which is too bad, because a guy like me, who doesn't care enough about movies to pay $30/visit to see them in the theater nor pay $30 to buy the BluRay, would happily pay $15/mo for instant access to, essentially, every movie ever made.

      Oh, well, I guess the studios don't want my money.

      • by sremick (91371)

        If you're paying $30/blu-ray disc you're either impatient or doing it wrong. I don't feel a burning need to watch a movie within some arbitrarily-short timeframe after its release just so I can keep up with the Joneses. As a result of that and buying things on sales/deals, I average $5-$10 per blu-ray movie, even very popular blockbuster releases. My movie collection now spans over 400 movies, most of which are blu-ray. And I know friends and family with more.

        One might point out that if I had taken all that

        • If you're paying $30/blu-ray disc you're either impatient or doing it wrong

          I'm paying $0, because movies aren't something I feel a compulsion to spend money on, outside my current Netflix subscription (which I use to watch TV shows, mostly). But I do see new releases priced that high at the big-box stores on the rare occasion I actually find myself inside of one.

          One might point out that if I had taken all that money, I could have instead paid for 25 years or more of Netflix or what have you. The issue there is that then I'm at the mercy of whatever movies the streaming provide decides I can watch today, and maybe will pull tomorrow, as well as the condition of my internet connection. I've already had maybe a 10% success rate searching Hulu Plus/Netflix/Amazon Prime for a given movie we want to watch, as well has seen frightening lists of what movies Netflix decides to "discontinue" from time to time.

          No thanks. I'll keep my physical media, thank you.

          Oh, I dig - I'm the same way about buying CDs rather than relying on streaming services.

    • by AmiMoJo (196126) *

      How would it even work? Some kind of scam like the current pay-to-join rights groups that only deal with mainstream record labels?

    • It's still useful data for responding to the movie industry's absurd statements.

      Movie industry: "We can't make a profit with streaming! Titanic! Movie magic! Actors will starve!"
      Response: "Yes you can. For a flat rate of $15, let alone whatever you WILL charge. And that's even if you DON'T charge premiums, which you fucking will."
      Movie industry: "But PIRACY IS GOING TO DESTROY ENTERTAINMENT FOREVER"
      Response: "NO."
  • Quality? (Score:5, Insightful)

    by sunderland56 (621843) on Friday January 24, 2014 @12:30PM (#46057985)
    If movie producers got a flat, monthly paycheque, there would be zero incentive to make *good* movies.
    • Re:Quality? (Score:5, Insightful)

      by Anonymous Coward on Friday January 24, 2014 @12:34PM (#46058045)

      Your statement implies the current system produces anything of quality.

      • Re:Quality? (Score:5, Informative)

        by phantomfive (622387) on Friday January 24, 2014 @01:20PM (#46058627) Journal
        Uh, what? In recent years, we have The Avengers, Harry Potter, Ender's Game, and Les Miserables; those might not meet your criteria of 'perfect movie,' but they have a lot of good qualities and were enjoyable.
        • by Firethorn (177587)

          Not even accounting for different tastes, 90% of what is produced is crap, and 90% of that remaining is generally transitory. This has been true since we were able to record music.

          For the most part you can build a really good movie list simply by taking the BEST 1-2 movies produced each year. Same deal with songs.

        • by jddeluxe (965655)
          All your examples would be in my category of "crap" I wouldn't bother to stream for free from Netflix...
          • See? Just because you don't like it, doesn't mean it's crap.
            Most likely the movies you would stream from Netflix actually are crap......
          • by rjstanford (69735)

            Most of everything we consume is considered "crap" by someone. Do you cook gourmet meals? Watch only the best movies? Enjoy great music (opera! No, classical! No, whatever...). How about your car - is it a high-touch work of art or do you do just fine with a "transportation appliance" that you probably see for more hours per week than you watch movies? Are your clothes bespoke or off the rack?

            Sure, in a very few areas of their lives most people have different (possibly better, but at least different) t

        • by evilviper (135110)

          Go back a few years, and the stuff you listed would be the middle of the road, bulk pablem. Seriously, another comic book movie? You didn't list a thing with a new and original story line... I'd put something like Inception ahead of all of those. Hell, i'd put low budget films like The Big Empty above any thing you listed.

          • You didn't list a thing with a new and original story line...

            There are no original story lines. Only stories you haven't heard of.

            • by evilviper (135110)

              Only true if you vastly oversimplify every story to a ridiculous degree, to make it fit your silly dogma.

              • Only true if you vastly oversimplify every story to a ridiculous degree, to make it fit your silly dogma.

                You don't think it's silly to judge the quality of a movie entirely based on how original the storyline is? Which is what you did in your post.

                • by evilviper (135110)

                  Entirely, yes, but that whole *story* thing is and should be the single biggest contributing factor to the quality of a film.

                  • Entirely, yes, but that whole *story* thing is and should be the single biggest contributing factor to the quality of a film.

                    That's fine......we disagree though. I judge a movie based on how much enjoyment I get out of sitting there watching it. I enjoyed LOTR even though I already knew the story completely. For me, the telling of the story is more important than the actual story.

    • by kamapuaa (555446)

      Presumably the movies that got requested more would receive a larger chunk of the pie.

    • Re:Quality? (Score:5, Insightful)

      by CanHasDIY (1672858) on Friday January 24, 2014 @12:47PM (#46058239) Homepage Journal

      If movie producers got a flat, monthly paycheque, there would be zero incentive to make *good* movies.

      Right? I mean, what crazy person would think that the exact same model that pretty much every productive human in the nation lives by would work for the denizens of Hollyweird?

      • by bws111 (1216812)

        What world do you live in that everyone lives by that model?

        • What world do you live in that everyone lives by that model?

          America.

          And, for the record, I didn't say "everyone," I said "pretty much everyone." Big difference.

    • by alen (225700)

      if its anything like spotify they get paid based on how many people saw the movie

      but then you can game it like app store rankings of paying kids to watch the movie

    • by Immerman (2627577)

      Why would producers get a flat paycheck? Production houses might, but they would still have incentive to keep their catalog improving so they could keep the subscription price up - people won't pay as much for a subscription that only gets your reruns and drivel.

      Individual producers, actors, etc. could still be paid according to arbitrary and convoluted contracts having little bearing on the quality or profitability of their work, just as they are today.

      • by Lehk228 (705449)
        people won't pay as much for a subscription that only gets your reruns and drivel.

        the fact that cable TV is a major industry has determined that is a lie.
        • by Immerman (2627577)

          Note the "as much". Would you be willing to pay *more* for cable if there was consistently something new and interesting worth watching? (Or alternately would you consider signing up for cable in the first place?)

          Cable is also infected with bundling - if you paid for only those stations you actually want to watch then the individual station producers would have far more incentive to carry things things worth watching instead of carrying so much "filler". If you paid by the individual show or episode then

    • by CastrTroy (595695)
      That assumes there's no money to be made elsewhere. A good movie doesn't just bring in money from ticket sales, there's tons of other advantages, like T-shirts, toys, and other merchandise. You could still sell premium disc versions with directors comments and extra footage, while offering the basic movie on the subscription service. People would still pay to see the movie on the big screen, even with the movie available at home on their TV. They could basically have a bit of both, and probably come close
    • The big blockbuster movies are just advertisements for toys anyway. Sy-Fy quality movies don't sell merch the way that Disney/Pixar/Marvel/Star Wars movies do.
    • If movie producers got a flat, monthly paycheque, there would be zero incentive to make *good* movies.

      Or new ones.

    • by kcitren (72383)
      Not at all, in fact, you'd probably see them willing to take more risks on movies that might not be overly popular. You'd see more niche programs / movies getting created. No one sets out to make a bad movie. They make the best movie they can based on their skill and resources.
  • by Anonymous Coward

    So you're saying there's a way they can make even more money than they do now? $15 a month is laughably optimistic.

    • by omnichad (1198475)

      Especially if that's a fee to one movie studio. How many major studios are there? It's kind of a big business.

  • by jedidiah (1196) on Friday January 24, 2014 @12:33PM (#46058033) Homepage

    Out of curiosity, I looked into how much revenue a top rated network sitcom earns for a single broadcast. That amount was equal to how much revenue would have been generated by 1/10th of their viewing audience paying for the SD version of the episode on Amazon or iTunes.

    • by alen (225700)

      sitcoms make money on syndication
      the itunes and are like dvd sales revenue

      the cost to make a sitcom is so high you take a loss on the original airing only to syndicate it to the crap channels on cable for people to watch it when they have nothing to do. this has been the strategy for decades

      • by jedidiah (1196)

        The cost of a sitcom is absurdly inflated.

        There's no good reason they couldn't make a profit on iTunes style PPV. The fact that they can't or won't right now just indicates an economic instability that is bound to be corrected sooner or later. Big content is taking advantage of a situation that really isn't sustainable and it will crash sooner or later.

    • by CastrTroy (595695) on Friday January 24, 2014 @02:26PM (#46059635) Homepage
      Yeah, but I doubt most people would pay $1 an episode. You have to get them on a subscription package, because at the end of the day, once you start asking them for money every time they want to watch a show, they'll opt to not watch it at all. They're only watching it because their cable bill is a sunk cost, and your show happens to be the best thing on. If they now have to choose paying you $1 to watch the show, and spending $0, and watching some other show, or just watching stuff on Youtube, the vast majority of people will just choose to not spend the $1.
  • Ridiculous (Score:5, Insightful)

    by kamapuaa (555446) on Friday January 24, 2014 @12:36PM (#46058063) Homepage

    Are people in China going to agree to this? 45% of the entire world's internet subscriber base strikes me as absurd.

    Sure if Photoshop sold for $3 to every single person who owns a PC they would make way more money than if they sold their software for several hundred dollars. But it's not going to happen.

    • by thewolfkin (2790519) on Friday January 24, 2014 @12:43PM (#46058163) Homepage

      Are people in China going to agree to this? 45% of the entire world's internet subscriber base strikes me as absurd.

      Sure if Photoshop sold for $3 to every single person who owns a PC they would make way more money than if they sold their software for several hundred dollars. But it's not going to happen.

      for $3 I'd pay $5 a copy and pass out legal copies to everyone I meet. I would do it so hard. I might spend hundreds of dollars making sure everyone I've ever met has Photoshop. It wouldn't even make sense but I'd do it.

    • Interesting point, particularly if that 45% includes countries like India/china where much of the population would find 15/mo to be alot of cash.
      • Not to mention how few of them would want to watch english movies in the first place!
      • by Whorhay (1319089)

        I'm curious though as to how many people there actually are counted as subscribers. Internet cafe's are much more popular in those parts of the world already because of the cost of having your own equipment and connection.

    • The report costs 395 pounds to access, but the article does get slightly more specific:

      Forty-five percent of the world's broadband subscribers equates to 348 million people.

      I do not know whether this is inserted from ComputerWorld or if it is copied from the report, but I hope that the report gets far more specific than that.

  • by pr0t0 (216378) on Friday January 24, 2014 @12:38PM (#46058113)

    I would gladly pay $15 per month to access all movie content. I don't think I know a single person that wouldn't pay that. It's considerably more than I pay to production houses right now. My only movie expense currently is Netflix. $8/mo and production companies have to split that with Netflix.

    • by Githaron (2462596)
      If it includes all TV and runs on all platforms (including Linux), I would definitely subscribe. Heck, I already pay more than that when you combine Netflix, Hulu, and (to a much lesser degree) Amazon Prime. I rarely watch movies. The few I am interested in I tend to go to the threater for.
    • No doubt! That's like buying a DVD / BD once a month. Most people don't do that. Now add in how expensive a Cable TV / Sat subscription costs, and $15 bucks a month is a drop in the bucket.

      I can only speak for myself, but I find in my -limited- spare time watching TV going towards two genres. Movies, and documentaries. News I can get online, and I prefer to binge watch TV series. So if Netflix can offer all this for $15 a month, and I pay my cable provider $50 a month for decent bandwidth, that equals $65 o

  • Can't Truss It (Score:5, Insightful)

    by thewolfkin (2790519) on Friday January 24, 2014 @12:42PM (#46058147) Homepage
    for $15/mo I would pay but I want EVERYTHING. ANYTIME. ANYWHERE. For Decades. they won't give me that. They'll drop some shows, they'll only last for a while. they'll block it in Canada offer different choices in Europe. It won't work in Trinidad. And without all that I'm not paying.
    • It won't work in Trinidad.

      Do you often watch movies in Trinidad?

    • by CCarrot (1562079)

      for $15/mo I would pay but I want EVERYTHING. ANYTIME. ANYWHERE. For Decades.

      they won't give me that. They'll drop some shows, they'll only last for a while. they'll block it in Canada offer different choices in Europe. It won't work in Trinidad. And without all that I'm not paying.

      And that's why the best way to combat torrents is to join them.

      If they offered their own competing torrents for clean, guaranteed-quality, DRM-free digital copies at a nominal charge, well, people would be all over that. I haven't checked lately, but last I heard Apple was doing pretty well with their TV show revenues, and that's for a DRM-riddled file that only works on their proprietary platforms...imagine how many more people would be interested in getting a copy that they could play on whatever they li

  • Not going to happen (Score:5, Informative)

    by Dan East (318230) on Friday January 24, 2014 @12:42PM (#46058151) Homepage Journal

    "Online subscribers" is defined by the article as everyone in the world with Broadband, and 45% of them are the 348 million broadband customers who would have to pay $15 annually to watch movies. Here's the problem. Of those 773 million people, 174 million are Chinese, which are 22% of the broadband users. I was just reading an article how China has not even been releasing Box Office revenue from foreign films showing at theaters. I don't think there's much chance of milking any considerable amount of money through video streaming out of that country at this point in time.

    I think any studies like this can only realistically look at US and similar western broadband markets as potential customers for video streaming service, as opposed to this study which includes every single broadband customer on the planet.

    • "online subscribers" was exactly the weasel-word the needed defining, and parent did an awesome job of patching up the summary!
    • 773 million minus 174 million is 599 million.

      45% of 559 million is 269.55 million

      At $15 a pop, that's $4,043,250,000.

      Not $29 billion, but still a sizable amount.

  • $5 for the owners of Pirate Bay, $15 for the media companies to split.

    My check for this month's in the mail. Now, go away, **AA, and leave me alone.
  • by rossdee (243626) on Friday January 24, 2014 @12:48PM (#46058247)

    Thats OK if you have a (truly) unlimited internet.
    If something like this happened, every ISP would have data caps/overcharges, and the price would go up for those that already do

  • the ./ post says "...if movie production houses charged a $15 monthly fee..." whereas the original post says "If movie producers charged a $15 monthly fee..." these are possibly two very different costs / month to the user. How would they regulate who gets what? I'm not saying this would actually happen as the production houses would probably never agree on who gets what percentage of your $15 (if it was a flat fee like netflix) and I don't believe they would let this fly as they make more than that from
  • Since it's unlikely to get 45% of all internet subscribers, consider a reasonable subset of them such as just America/Europe subscribers. However, if it were $50 and I had access to every movie/TV show ever made, I'd pay that every month, and they would probably only need the America/Europe market. Maybe an extra $20/mo for access to 'new releases' provided they were available on the standard plan after maybe 60 (90?) days. They could even do an extra 'HD' surcharge of $20-$30/mo I used to pay more than

  • by MDMurphy (208495) on Friday January 24, 2014 @01:04PM (#46058413)

    If this was deemed viable and studios signed up there'd be no consensus on how to run it. So, there'd be 2 or 3 (or more) different services, all offering you "all" of their movies for $15 a month. But you'd find Disney films only one one service, Marvel superhero movies only on another and so on...

    It might be that it were possible to get all the back catalogs of movies all available to stream, but I'd strongly suspect it would take several flat fees to do it.

    • by Kaenneth (82978)

      But Disney acquired Marvell.

      In the future, all media is Disney.

    • by alen (225700)

      they seem to have figured it out with ultraviolet
      not perfect but i can buy stuff on target ticket and watch it on Vudu or Cinemanow

      same with Hulu and Spotify for TV and music. Hulu is even owned by the content owners themselves

    • by Type44Q (1233630)

      If this was deemed viable and studios signed up there'd be no consensus on how to run it.

      That should be the studios' fucking problem...

  • Free with ads? (Score:5, Interesting)

    by CCarrot (1562079) on Friday January 24, 2014 @01:19PM (#46058609)

    What I can't figure out is why they're not offering two downloadable, DRM-free versions of their content: one that's free-as-in-beer but contains ads, much like peole get from their cable subscriptions now, and a second 'premium' version that is ad-free for a nominal charge. Make both versions easy to access via a hosted torrent site, with value-added tools such as offering the ability to track new episodes of favourite programs, or notify / auto download when available for upcoming titles. Not only would the end-user love it, the distributors could track the popularity of shows/movies even before they're released and negotiate ad revenues accordingly.

    Sure, the premium version will get shared around somewhat, but at least the average Joe has a place where they can go to directly support shows/movies they like, and in the end they have a useful commodity that they can actually say they own: can back up as often as they like, play on any device, can alter it if needed / desired, or can lend to a friend or family member without hassle. I would pay for such an unencumbered file in a heartbeat, if it were reasonably priced (say a buck or two for an episode, up to $5 for a movie...approximately $2 per hour of entertainment sounds about right), and I'd use the free ad-supported versions to review new shows and see if I'd like them...I would easily spend over $15 a month just on the shows I like now :)

    The proposed streaming model is great...if your customer has access to reliable, unlimited broadband wherever they might want to watch your content, and is willing to only watch the content on devices that work with your particular streaming protocol. Thing is, with people getting more and more tech savvy, even the theoretical average Joe is starting to realize that they don't have to put up with that crap if they don't want to...

  • by RichMan (8097) on Friday January 24, 2014 @01:19PM (#46058617)

    I don't think it is a good idea:
    All content ever produced instantly licensed will provide income to a legion of Ewe Boll imitators to produce volumes of work.

    I shudder as I glance at the size of $5 bin at Wallmart as it is.

  • by RadiCalMan (1288104) on Friday January 24, 2014 @01:26PM (#46058717)
    The World Wrestling Entertainment (WWE) is about to switch to this model on February 24th. With their new WWE network, subscribers will have 24/7 HD access to all their past content and pay-per-views for $9.99/month. This includes not only cable but also internet streaming to android and iOS devices. Since most of their monthly pay-per-views have cost between $40 - $50 each, an annual subscription of $120 would easily pay for itself. They are betting that the subscription numbers will more than make up for the current pay-per-view income. It will be interesting to see if their model is successful and if it is, will the studios see the light?
  • Online Streaming As Profitable As TV, Disc Sales By Charging Just a $15 Flat Fee

    Could you really not stretch for the extra three characters to put a more readable "and" in there?

    You don't even see this in print nowadays.

  • "they could rake in just as much cash as they currently do through TV downloads and disc sales" - come on... capitalism asks for "getting as much money as possible", not "making the same money as before".
  • Give me a monthly bill with:

    $10 for Unlimited Music Streaming + $15 for Unlimited TV Show Streaming + $20 for Unlimited Movie Streaming = $45 Total

    I would never feel the need to pirate and everyone would win. Throw in a $10 surcharge for multiple device / independent streaming.

    Can someone please make this work?

  • HBO (Score:3, Insightful)

    by XMark3 (2979399) on Friday January 24, 2014 @02:59PM (#46060057)
    Seriously, I am just waiting to give HBO all my money as soon as they offer HBO Go without having to sign up for the TV channel. Why doesn't HBO want my money?
    • by evilviper (135110)

      HBO doesn't want your money, because they earn a billion dollars a year from the middle-men you want to snub. They have enough competition that those middle men would happily drop HBO if they saw signs that they will soon threaten their traditionally profitable business model. Customers would complain a bit, get a few free months of Cinemax, Starz, Showtime, etc., and then HBO would lose their billion dollars, and forced to be nothing but another Netflix competitor with the same slim margins.

  • I think that cost model totally forgot to include the cost of the servers & infrastructure to deliver that amount of content to the masses reliably and with high quality. They seem to assume almost every dollar goes to licensing.
  • by Shoten (260439) on Friday January 24, 2014 @05:35PM (#46062103)

    This concept...the viability of a business model defined by "if X% of Y population buys this for $Z" is so classically suicidal that it is literally taught in management 101 in college as one of the most sure-fire signs that a business will fail. It is called "Chinese Marketing," as a lot of early examples involved pipe dreams of how much profit could be had with even modest market penetration within the Chinese population. Such a simplistic approach fails to take into account many things:

    -how long it may take to reach that level of penetration
    -currency valuation challenges
    -IP law differences between countries
    -how many of the world's online population has access to sufficiently high bandwidth
    -how many of the world's online population has their own computer (as opposed to just using an Internet cafe...substantially increasing the cost of subscribing to those potential customers who are on the margins of affordability)
    -who would be the clearing house/sole distribution provider that would distribute all of the movies on behalf of every movie company

    The model falls apart quickly when you take these factors into account, and I am sure there are at least a few more that I don't even know about.

  • If it was possible for me here in Australia to buy a reasonably cheap streaming account and watch the shows I want to watch when I want to watch them I would be very interested. Be much easier than trying to find copies on dodgy YouTube-clone streaming sites.

    But as long as Rupert Murdoch and his Foxtel empire exist, it will never happen.

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