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Ahead of the coming connected TV opportunity, availability of movies through UK online services is still poor – and Lovefilm has amongst the…

Admit One; Movie ticket
photo: Corbis / Tetra Images

Ahead of the coming connected TV opportunity, availability of movies through UK online services is still poor – and Lovefilm has amongst the poorest of selections, according to research.

Although most of the films which come top of critics’ and buyers’ lists are available on DVD, online services have only about half of titles, says the Open Rights Group’s (ORG) audit. And that is only about 27 percent if you ignore iTunes.

Although Amazon-owned Lovefilm is often lauded as a market leader, ORG’s audit quantifies what paidContent has been reporting this year – that its online catalogue is poor. Judged on some of the leading lists of top movies, both Lovefilm’s online subscription and its online PPV packages have fewer titles than even the services Filmflex runs for Film4oD and Virgin Media.

This all suggests that, despite growth, consolidation and opportunity in the space, the UK online movie sector is still the Wild West. There is still ample opportunity for better services to come along and dominate. Netflix (NSDQ: NFLX) is planning a UK launch, YouTube (NSDQ: GOOG) is slowly improving its catalogue and Janus Friis is planning his new service Vdio.

In a paidContent article this spring, Forrester Research analyst Nick Thomas criticised content owners for not creating compelling enough services to meet what is actually a growing consumer inclination to pay for digital content.

The problem in movies – News Corp.’s Sky Movies has exclusive rights to the six Hollywood majors’ blockbusters. The UK’s Competition Commission has provisionally ruled this anti-competitive and is currently considering how to level the playing field. But some analysts expect remedies to be minimal and arriving only in 2014, meaning a true opportunity for these upstarts could be a long way off.

ORG carried out this research to lobby UK legislators that, rather than throttle freeloaders’ bandwidth and block access to pirate sites, they should first be creating the conditions for a thriving legal online content market, such as has happened in music in the case of Spotify.

Tesco-owned Blinkbox’s catalogue compares with favourably with iTunes’. Lovefilm is likely to be subsumed in to Amazon (NSDQ: AMZN) next year and Blinkbox is due to be rebranded under Tesco (Blinkbox PR says there are no rebranding plans).

ORG audit highlights:

“Digital prices do not compare favourably to those of DVDs. For the best selling DVDs from August 2011 the average price was ï¿¡6.80. For iTunes purchases, of the films available through it’s service, the average price was ï¿¡8.88. For blinkbox purchases the price stood at ï¿¡9.49.

“The quality of films available online also does not compare well with physical media.

“The film market online is dominated by one service and overall offers a poorer selection, higher prices and lower quality than the physical media market. It is not a compelling consumer offer.

“There are obvious problems with the licensing and availability of films online. If the goal for policy makers is cultural markets that thrive in the digital age, then a vital element of this must be ensuring that consumers’ demand is satisfied online.”

  1. As a very recent trial customer to Lovefilm on PS3, i have to say i’m pretty disappointed with the ‘watch now’ choice. I searched for Julie Walters and only two of her more obscure movies are available to watch now. The streaming aspect of the package feels like an afterthought. Also, the quality is appalling – marginally better than a youtube video and certainly no better than Home Choice which was pioneering film and TV delivery over DSL a decade ago.

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  2. Online movie is far better than DVD because overall its cheaper, it is more readily available and the quality is great thus it isn’t a surprise that more and more people are choosing it than DVD. 

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  3. Regarding the statement “This all suggests that,
    despite growth, consolidation and opportunity in the space, the UK online movie
    sector is still the Wild West. There is still ample opportunity for better
    services to come along and dominate.”…sure, if you have the cash! The
    issue is simply that digital rights are still too restrictive, too expensive,
    and too inferior to the physical product (sub-titles? bonus content?
    multi-lingual support?). The Lack of VoD titles on services is mostly the
    content owner’s fault since they make it expensive and difficult for a service
    provider to distribute their content. Getting digital rights to movies is the
    easy part – Paying for it, making your business case work, and delivering it to
    the end customer is the challenging part. So until content owners relax their
    rights and look longer term (instead of focusing on the short term), the
    “legal” VoD market will have growth issues. Additionally, what
    perhaps Nick Thomas from Forrester does not realize is that content owners
    could care less about “creating compelling enough services to
    meet what is actually a growing consumer inclination to pay for digital
    content.”…their business is to generate the most revenue possible from
    their IP with the least amount of effort and risk – Why should they take the
    risk of launching a distribution service (NOT their core competency) when
    others will do it? They just need to charge others silly licensing fees for
    their content in order to generate revenues. Hulu is an example of a
    “test” service for the majors and the only reason why it is not in
    major trouble like its competitor Netflix is because they essentially have a
    much lower cost for content…

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