Risky Business

The Economist ran an article last week about online video downloading and just how risky that business model is to the movie industry.  The article was full of facts about the movie industry including that revenues from DVD sales is a whopping $23.4 billion compared to the $9.6 billion in box office sales.  An estimate from Screen Digest indicates that in 2006 online sales were a measley $58 million.  And they say that as long as piracy continues to be a problem that studios will continue to resist moving the the online distribution model.

In addition, they point out that online sales have 3 major hurdles to clear before we will see real success in this line of business.

1. Download times will have to improve

2. There will have to be an easy way to transfer the movie onto your home entertainment center-- people don't want to what their favorite movie on their computer screen.  THey want it on their 72" home theater screen,

3. Standards will have to be developed among dowload sites and personal devices.

The article concludes that it will take a few more years to get it right, but we are on the path.