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Kindle Comparison

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    Kindle Comparison

    I go to a bookstore and buy a new technical tome. Inside I see a way to redeem an ebook copy.

    I think, "cool, I think I will try that"

    Two weeks go by and the big paper version is collecting dust and I am burning through it on my iPad instead.

    Next time I go to buy a book I think, "Why go to the book store? I'll just get it in ebook form and save myself the trip."

    From then on, I stop going to book stores. Borders closes their doors and goes out of business. Etc...

    Now, we are in the advent of this same strategy occurring with entertainment media.

    First, I get a combo pack (bluray/DVD/UV). I open my UV account and find I watch my title via Vudu and the physical copy collects dust on the book shelf. Next time I go to buy a new title, I save myself the trip to the store.

    If UV does for movies what e-readers like Kindle did for books, the future is pretty easy to forecast.

    #2
    Re: Kindle Comparison

    I absolutely agree this is the logical next step. The downside is that many ebooks are priced the same as their physical counterparts, and the movie industry is no different...how can a digital license not be a more cost-effective delivery method, and if it does cost less, how can those savings not be passed to the consumer? Granted we live in a generally capitalist society where the prices are set based on demand and supply, however, presently a digital copy has no legacy value, that is, once you purchase it you are the sole owner forevermore and can never recoup what was spent in the acquisition.

    I think we need a way to resell our digital licenses to books, music, movies, or whatever. At that point it makes sense to spend the same amount on a college textbook for the digital license as the physical book, in fact, resale value of such items would likely be much closer to the original price, making them an awesome deal. My first thought on how studios, publishers, labels, etc. would continue to make money is to charge a "digital sales" tax on each license transfer, thus reducing their "loss" caused by people buying used instead of getting a new digital license directly.
    Last edited by Speedaddict81; 04-04-2013, 12:43 PM. Reason: Added solution

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      #3
      Re: Kindle Comparison

      Originally posted by Speedaddict81 View Post
      I absolutely agree this is the logical next step. The downside is that many ebooks are priced the same as their physical counterparts, and the movie industry is no different...how can a digital license not be a more cost-effective delivery method, and if it does cost less, how can those savings not be passed to the consumer? Granted we live in a generally capitalist society where the prices are set based on demand and supply, however, presently a digital copy has no legacy value, that is, once you purchase it you are the sole owner forevermore and can never recoup what was spent in the acquisition.

      I think we need a way to resell our digital licenses to books, music, movies, or whatever. At that point it makes sense to spend the same amount on a college textbook for the digital license as the physical book, in fact, resale value of such items would likely be much closer to the original price, making them an awesome deal. My first thought on how studios, publishers, labels, etc. would continue to make money is to charge a "digital sales" tax on each license transfer, thus reducing their "loss" caused by people buying used instead of getting a new digital license directly.

      Generally, Kindle editions cost 50% less. Not so with VoD copies of movie titles. You are right. I do not know if the delta in ARPU (average revenue per unit) is reaped from the likes of Vudu or if the MPAA members are the ones setting the price and getting the benefits inherent in a digital delivery mechanism.

      If the question is about morality, I would direct your attention to the evil executives in the offices of satellite and cable companies who charge their customers $30.00 to watch a movie one time on a Pay-Per View plan. They do this, reap unholy profits and then sleep like babies.

      I don't know how they do it, to be honest. I guess I have an over active sense of morality.

      Comment


        #4
        Re: Kindle Comparison

        It's very difficult to compare the costs of physical and digital distribution, particularly for files as large as movies.

        The machines that press and package discs may already be "paid off" as far as the company bookkeepers are concerned. Shipping, stocking, marketing, selling the physical copies is done through existing, familiar channels. While there are operating costs involved, once the disc is in your hands, presumably there are no more costs for the manufacturer to consider.

        Digital copies are hosted, presumably, in data centers that are far from free to operate. Electricity, network, HVAC, servers, all operating 24/7/365. Not to mention the development work that goes in to the applications that access the files.

        If you told me the life of an optical disc was 5 years (which seems low), I'd be interested to know if the costs associated with 1 disc were higher or lower than the costs associated with making 1 movie available for digital streaming to 1 customer over that same time period.

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          #5
          Re: Kindle Comparison

          Originally posted by nyunole View Post
          It's very difficult to compare the costs of physical and digital distribution, particularly for files as large as movies.

          The machines that press and package discs may already be "paid off" as far as the company bookkeepers are concerned. Shipping, stocking, marketing, selling the physical copies is done through existing, familiar channels. While there are operating costs involved, once the disc is in your hands, presumably there are no more costs for the manufacturer to consider.

          Digital copies are hosted, presumably, in data centers that are far from free to operate. Electricity, network, HVAC, servers, all operating 24/7/365. Not to mention the development work that goes in to the applications that access the files.

          If you told me the life of an optical disc was 5 years (which seems low), I'd be interested to know if the costs associated with 1 disc were higher or lower than the costs associated with making 1 movie available for digital streaming to 1 customer over that same time period.

          The question is ARPU between the two formats (optical disk vs VoD). VoD has MRC. Optical Disk is an NRC play.

          Speaking from professional experience, the business you want to be in is selling CPU cycles on a router. The math is amazing.

          For the optical NRC play to be recouped, I need to make it, ship it, distro it, and then sell it wholesale. The retail outlet then need to do the same until it reaches a shelf where they need to pay employees and facilities costs.

          The Digital distro method bypasses all of this and instead is selling CPU cycles on a router. Their largest MRC will be bandwidth utilization. However, even on the most wildly successful model, this would in no way reach the cost of putting a physical plastic encased disk into the hands of a local consumer.

          As such the VoD MRC model has far more ARPU with an equal price as the Optical Disk NRC model.

          At least, that is my opinion. I have built quite a few PoPs (point of presence) and the MRC is really not that great. Vudu gets money each month from rentals too. They do not only make "one and done" sales.

          Walmart would not of bought them if their ARPU was not atractive.

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            #6
            Re: Kindle Comparison

            I had to google ARPU

            Comment


              #7
              Re: Kindle Comparison

              Originally posted by Walter-S_North_Carolina View Post
              If the question is about morality, I would direct your attention to the evil executives in the offices of satellite and cable companies who charge their customers $30.00 to watch a movie one time on a Pay-Per View plan. They do this, reap unholy profits and then sleep like babies.
              Huh? No one is forcing those customers to pay that $30. There's plenty of competition for our entertainment dollars.

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