Are Paid Downloads Dead?


Entertainment execs gathered for a Variety-sponsored panel at CES yesterday to discuss technology’s impact on the entertainment biz. One key takeaway: ditching paid downloads in favor of ad-supported streaming. Here’s a telling quote that Variety pulled from the talk:

“People online want to watch for free, because they can get content for free via piracy,” said Fox digital media prexy Dan Fawcett. “Downloading to own and keep on a PC seems to be losing out. People like to watch on an impulse.”

Fawcett’s right. Why clutter up your hard drive with big video files that are either incompatible with some device you have now, or will be obsolete down the road, when Hollywood can host it for you? Bolstering that argument is the fact that DVD sales are declining, so maybe there isn’t a lust to own a massive library of movies anymore, either.

Having said that, Hollywood needs to buck up and get its act together. Enough with the exclusivity, already. Studios and networks need to match availability with our impulse to watch. It’s inexcusable to parse out episodes of TV content in drips and drops. If there are 100 episodes of a show, put all 100 online (I’m looking at you, Hulu). Go ahead a slap an ad in there — as long as it isn’t too junked up, we’ll watch.



Let me get this straight… people won’t pay for streaming downloads (Amazon, Netflix, DVWN, etc…) but they’ll pay for it every other which way ie cable, DVDs, VOD, etc.. Complete rubbish!


Fox thinks people download pirated TV because it is free. Wrong. People download TV for the following reasons;

  • People don’t want to buy something New because they don’t know if they will like it or not.
  • People don’t like watching advertising every 7-8 minutes on regular TV. Pirated versions rarely contain ads.
  • Pirated versions are easily played on many devices – TVs, portable media players, mobile phones.
  • The TV program is not distributed through regular TV distribution in their country because of distribution windows/deals.
  • People already [think they] pay for the TV program through their Pay TV subscription. Why should they pay twice?

The problem with Fox’s assumption is that it has no strategic meaning. All of the above are nuisance costs to the TV experience. Piracy is an alternative that vapourises the nuisance. Assumptions like this will undoubtedly result in responsive tactics that include publishing free advertising-laden (pre, post, overlay) video online and heavy use of video anti-piracy technology.


With the music industry, DRM (anti-piracy tech) is irrelevant as it only protects a fraction of the music experience and limits exposure of bands. Revolutionaries like RCRD LBL are giving away music for free. Beyond the listening experience, there is so much more value to be created and captured through the community of passionate fans. Merchandise, sponsorships, concerts, exclusives, books, games, interactive media, the list goes on…

The question Fox and others should be asking is,

What experience can I create beyond and around TV viewing?

It’s not easy to solve. It’s hard to do the right thing. It’s easier to keep doing what you do now. But that’s where the money is.

Posted here


Movies work with subscriptions not pay per view downloads look how many rental ,electronic sell thru bussinesses have failed on the web when they do paid downloads they only ones standing are the subscription based models and even then they are not posting outstanding revenue figures .

The only place downloads will work is on portable devices where the bandwidth is constrained or not available

Mark Worden

Perhaps I’m different than most people, but I’d like to be able to watch ad-supported content AND have the option of buying movies or a favourite series…those ones I know I’ll enjoy coming back to from time to time. My wife and I have only a handful of TV series we enjoy, but currently buy on DVD…MacGyver, Knight Rider, and more currently, Corner Gas. We also have certain movies we enjoy coming back to again and again, especially movies our three kids enjoy as well. Once in a great while I might spend $20 on a DVD that I don’t want to wait for, but often I’ll buy previously-viewed rentals for half the regular price. Watching ad-supported stuff wouldn’t bother me, as long as the ads were family-friendly. Ideally it would be nice to tailor the ads to your particular tastes…fashion, health, automotive, electronics, etc. but I’m probably dreaming. At the end of each movie or episode, it might be nice to be given the chance to download that program. No DRM stuff…I’d like to put the purchased program on my network drive to watch from any PC in the house, and download to my laptop or Pocket PC for viewing anywhere…or burn a DVD for the portable DVD player so the kids can watch it on-the-go. I paid for it, now let me enjoy it the way I want to. I’m not going to purchase separate copies anyway.

There…my $0.02 worth =)

Eric Susch

Personally I want to download something and have it on my hard drive, or on my shelf like a DVD. Why? Because you absolutely cannot depend on the corporations to uphold their end of the bargain. I would never pay for content or even a subscription and keep it all on the companies server. That’s just crazy. The company could take it all away tomorrow and there’s nothing I could do about it. I want it in my hands so I can control what happens to what I buy.

Also, I think DVD sales are dropping because people are anticipating that Bluray/HD-DVD will make their collection obsolete. They’re waiting until it all shakes out, then they will start buying again. At least, that’s what I’m doing.


The survey for this article should obviously have three options, the third being “Both, but it depends”. It’s not as simple as “I’ll only pay for content” or “I only want ad-supported”, the model will depend on the content. Some people will be okay with ads in films, but some will be appalled by the idea of breaks in their full feature, HD resolution movie.

Generally I think people are more accepting of ads when they’re watching shorter form content, for example sit-coms, but they should always be given the option.

Preferences will vary and the providers will need to cater for both models.


I’d pay a buck for an hour show I could watch without a wifi connection (half the time I have to pay for) and spam. Esp if the quality (almost) tv. Most free crap online (that means from an online media co, or a pirate station) looks like…crap.

Jon Smirl

Would any sane person spend $40,000 to buy music for an iPod that can be lost or broken? Putting the backup burden onto the consumer is never going to work. Why is this so hard for the content people to figure out, put everything on a big server. Let people download all they want ad supported, if you don’t like the ads, pay to get rid of them. Once a freely accessible server exists piracy will vanish. People will go to the main server to make sure the media hasn’t been tampered with and for better indexing.

Piracy only exists because artificial means (DRM) are being used to create scarcity. Broadcast TV works ad supported, why can’t an internet server?

Chris Albrecht

Lawrence, I’m right there with you on The Wire. Those are some of the only DVDs that I have hung on to, since I don’t want to wait around for HBO to dole them out when they feel like it.

Todd Smith

We debated this issue for sometime before coming to the decision to use ad based or sponsored media. That is unless the content is extremely entertaining and at a high level. UGOV content I feel will always be ad supported where professional and exclusive content may fetch a subscription fee or similar.


I believe it depends. If there is something a user is willing to pay for they will.

I can’t see myself paying for a TV show. i would pay to download a movie rental so i can watch it in the comfort of my home.

Think of it in terms of shareware, there is some thats col and you will use it. No way would you pay $15 bucks for it. But there are a few that you would. Not exactly a good comparison, but considering how much shareware i actually purchase, the ratio is about right.

i would pay to watch all the episodes of the Wire too, if i can get them whenever i wanted. Waiting to watch them on On Demand is just cruelty to viewers.

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