Over in Slate, Edward Jay Epstein offers an overview of the escalating war between Comcast Cable and DirecTV. The article is okay as far as it goes but I think this is one of those "Battle of the Titans," so familiar to readers of Marvel Comics, wherein two powerful forces slug it out based on a false premise. For instance, I don't think "Video on Demand" will ultimately be driven by allowing people to pay to see Desperate Housewives whenever they want and without commercials, nor do I think it will thrive by delivering current major motion pictures. I think most people will come to adopt the attitude that the big, mainstream material will always be readily available. If you don't catch it today, you can always wait for a rerun, especially if you have a TiVo or similar device and know how to program it.
Epstein writes of the head of Comcast, "His ultimate VOD goal is to release new movies at the same time as they are released on DVD." I dunno…if you're going to pay to see a new movie, wouldn't you rather have the DVD? Even if it means waiting until your next trip to Costco… when it'll probably be cheaper? Once you have physical possession of the DVD, you really "own" that movie. It's not going to get deleted off the hard drive of your Personal Video Recorder or lost if there's a crash. You can watch it whenever you want it on any TV in your house that has a DVD player. You can take it to a friend's house and watch it there. You can look at a little shelf of DVDs in your library and say, "I own those" and feel like you really got something for your money. This could get into a long discourse but basically, I think the new age of cable and the Internet is disabusing people of the idea that you pay for content. A lot of people feel that they're not stealing if they download a bootleg of a new movie. They'd never think of stealing a DVD or a VHS tape of that film but just moving a copy to their harddisk is different. That same, dubious distinction is what I think will discourage people from paying to have a new movie delivered to their PVRs when they could be getting a tangible DVD for their bucks.
What I think VOD is going to have to do is to offer people programming they can't go and buy at Sam's Club. I'll pay to add new channels to my DirecTV subscription because that increases my viewing choices. But I've never bought a pay-per-view offering because I've never seen an ad for one it would bother me to miss. If I cared about sports, that would probably be different.
The business model for VOD may not be in TV. It may be established by Howard Stern's pending move to Sirius Radio: How many people will buy the units and subscribe to hear Howard, for the first time, unexpurgated? (My guess: Not nearly as many as Sirius is projecting. I think a lot of people will never accept the idea of paying for radio. And as Stern's show gets dirtier, it's going to be more frustrating to listen to it and not be able to see. Betcha that within three years, he moves the whole thing to HBO or Showtime…or to VOD, where it would indeed be something you couldn't get elsewhere or buy at Sam's Club.)
Lastly, Epstein's article is wrong that "[Rupert] Murdoch's satellites reach about 90 percent of the American population. Everyone (including Roberts' cable subscribers) in this vast footprint can receive Murdoch's 500 channels with a small 31-inch dish and digital receiver." An awful lot of people can't because they live in apartment buildings and housing projects that won't let them put up dishes and/or where they have no unobstructed view to the South. (I had to have someone come out and cut the top off a big tree in my neighbor's yard with his permission.) Another large chunk of people in that 90% are simply scared of the technology. To my mother, having cable installed wasn't that much different from using the old roof antenna that had brought her TV for years. Ask her about having a "satellite dish" on her house and she won't get past the idea that this is something that you have to work for NASA to operate. I love DirecTV but it'll never be as popular as cable because it'll never be as simple.