Flixter – Content in The Cloud – Can it Work?

The announcement by Warner Bros. that it plans to use its recently acquired Flixster to encourage consumers to upload their DVDs to the “cloud” so that consumers can access that content from anywhere – and on the device of their choice – is very intriguing.  Using the cloud to store content which is then accessible anywhere has been on the minds of studio executives for many years, but no one has implemented a solution that works – or that consumers have bought into.

Consumers like the idea of being to access their content from anywhere – and on the device that they choose.  If consumers can just put all of their content in one location and access whenever and wherever they want – they would be very happy.  Consumers also like the idea of purchasing content just once rather than needing different versions for their TV than for their mobile phone.  The average consumer doesn’t really understand rights management or codecs.  They just understand that if they bought content, then they want to access it anywhere and on the device of their choice.

In order for the cloud service on Flixster to work, there are a few challenges they must overcome.  First, a DVD is often several gigabytes and a Blu-ray disc is even larger.  It could take hours for a consumer to upload their DVD to the cloud, which is very daunting to consumers.  A better solution is to allow consumers to register their DVD online and just be able to access a copy already in the cloud.  This would enable consumers to quickly access their content without having to go through the painful process of uploading all of the DVDs – which they don’t really want to do.  The challenge with this, of course, is that Flixster would have to make deals with other content providers to store their content in the cloud.  This would not only be expensive and time consuming, but likely impossible with some content providers who prefer to do distribution deals with aggregators rather than other studio’s services (this is a big challenge that Hulu faces with content licensing).

Second, the concept of the cloud may only be attractive to subset of consumers.  Business models are changing and content consumption habits are changing.  Consumers today are less interested in content ownership than in the past – in part because there is so much content and in part because it is so inexpensive to rent content.  Kids are typically the biggest market for DVD purchases as children love to watch the same content over and over.  Services like Netflix allow customers to access a significant amount of content online.  As Netflix and others expand their online catalog which is available for a subscription, the need for the ability to access a personal library of content decreases.

Third, content online doesn’t always work.  Bandwidth has to be available (sadly we’re not ALWAYS in a place where there is an Internet connection) and it has to be fast enough to stream the content at a speed that makes the content watchable.  If I’m watching on my HDTV, I want the content to be in HD. I require higher video quality on my TV than my mobile phone.  There are also times where I’m simply not connected, which is a challenge for any of these online services.  It’s great when I’m connected and it’s not great when I’m not, so the ability to offer downloadable content can be a key feature of these services.

These challenges don’t mean that Warner Bros. shouldn’t try out the service and launch something.  Having a direct relationship with consumers is important and the studio can learn a lot about consumers and obtain a lot of useful data.  It can help them learn more about what consumers are watching and how they are watching it to make better distribution deals.  It’s difficult at this point to believe that Flixster will end up becoming a competitor to Hulu, Netflix, Vudu, or other online video services who offer a large breadth of content with no requirement by a consumer to upload content at relatively inexpensive prices…but time will tell if consumers become interested in the idea.

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