Rent, rip and return - Hollywood, RealNetworks square off on DVD copying [Archive]

David M

04-24-2009, 04:15 AM

The whole thing is kinda bizarre considering that anybody can buy really sophisticated DVD copying software as a download. Most vendors allow you to download a time-limited trial version for free, and you can then pay online for an unlocking key. Actually many of them can be downloaded from file-sharing sites already unlocked. Yes, the pirates have been pirated!

In my experience anyway, one thing that users really appreciate is the "movie only" function offered by DVD Fab and some others. This gets rid of all the "extras", FBI warnings, unnecessary menus, Mandatory trademarks and so on, leaving a disc that starts playing just the movie as soon as it is inserted. More often than not "just the movie" will fit on a single-sided DVD without any compression.

It all sounds suspiciously like highly paid executives pretending to be working to solve a problem that really has no solution.

Curran Giddens

04-24-2009, 05:23 AM

Ha ha. I used to do that with Netflix when they first started since they didn't have any distribution centers near me. To cut down on the turnaround time to get my next DVD in the mail. I would get the disc in the mail around noon, rip it, and send it back out that same day. Of course, when I finally did have time to watch it, I would erase it afterward....

Danish P.V.

04-24-2009, 06:47 AM

Of course, when I finally did have time to watch it, I would erase it afterward....

...yes, of course you did! ;)
Just kidding, Curran :)

Tom Lowe

04-24-2009, 07:43 AM

Thom Steinhoff

04-24-2009, 09:46 AM

They don't want you to back up DVD's, but where is the policy that allows me to trade my scratched and useless Toy Story DVD for a new one by only paying a small processing fee? I've already licensed the movie--I just want to replace the media. They smugly sit quiet when that question is raised.

My kids speak Chinese (Manderin and Cantonese), so I buy all of the kids movies in Chinese, paying 20-30$ for all of the Disney Movies that would otherwise cost $15 just so my kids can keep their languages.

After scratching several of them beyond usable, I was forced to come up with a better solution.

Curran Giddens

04-24-2009, 10:20 AM

There are also cases where the only way to watch the scratched-up DVD you rented from Netflix without it freezing / skipping is to rip it to the hard drive. The ripping program can slow down and take its time reading the 1's and 0's to make sure it is accurate before copying to the hard drive.

Dominique Grenier

04-24-2009, 11:03 AM

I also use this method for "time-shifting" the DVDs I rent. Sometimes I don't have time to watch it for whatever reason, so I rip it and return the DVD. I'm then free to watch whenever I have the time. I always delete it after watching it, though. I realise I might be in a minority.

I've bought all the DVDs I own, and I refuse to lend a DVD I own to someone I know will make copies and share it with all his friends I finally. Partly because I don't want to be the bozo who actually pay for the thing so everybody else can enjoy it for free. I'm not that generous...:cool:

David M

04-26-2009, 03:04 AM

Another interesting fact is that quite a few DVD releases now can be simply directly copied without needing any ripping software. Obviously the distribution company has realized that current copy protection methods are a waste of time, and they refuse to pay royalties for them:-)

David M

04-26-2009, 03:13 AM

This is madness. What about people who buy their kid some $20 Disney DVD and want to back it up, since the chances of the kid eventually scratching or damaging the DVD are about 100%?

The only people who get punished by anti-piracy measures are the people who actually pay for the product.
The crazy thing is that people making a single copy of a DVD for their own use are hardly going to harm the distributors. In most cases people only watch the movie once, and if anybody else happens to borrow it, chances are if they weren't able to do this for free, they simply would do without, they wouldn't be buying or renting it. In any case, once you buy a DVD you can lend it to as many people as you please, and they won't be paying a cent either.

The real threat is from people engaging in bulk bootleg duplication, and current copy prevention technology is not even going to slow them down.

Chris Kenny

04-26-2009, 09:50 AM

Rent, rip and return - Hollywood, RealNetworks square off on DVD copying

This is clearly a substantial loss for Hollywood, because I'm sure those people ripping 20 movies a month from Netflix were totally going to spend $5000/year buying that many movies instead.

Right.

Study after study with music has shown that piracy (actually, we should probably switch to calling it "bootlegging" now that actual piracy is getting popular again) doesn't substantially decrease sales. What happens instead is that people buy about the same amount of content, but also illegally download a bunch of content. So they spend about the same amount of money, they just get more for it.

The logical conclusion is that, since this stuff has almost no physical per-unit cost, content rights owners should just lower their prices. Think about this. If price has ever prevented you from purchasing a movie, that's money out of Hollywood's pocket, since the copy of the movie they could have sold you (at a price you were willing to pay) would have cost them almost nothing to produce. Of course, they can't sell you a movie for $5 (because that's all you're willing to pay) and still charge some other guy $25 (because that's what he's willing to pay). But given how little content people buy (the average American adult buys about three DVDs/year), it's hard to avoid the conclusion that things are badly overpriced and that total revenues would be much higher with lower prices. People spend $800+ on cable every year. It seems ludicrous to think Hollywood couldn't get more than $60/year out of people by offering better value. They've just completely misunderstood the demand elasticity that exists with respect to movies.

Tom Lowe

04-26-2009, 11:21 AM

Well I definitely disagree with anyone who says that piracy does not harm sales of DVDs, CDs, etc. To be honest, I have not purchased a CD in like 8 years -- ever since Napster. I used to buy dozens of them every year.

But the broader is these companies and artists need to find newer business models that fit the realities of the digital age, rather than trying to sue or punish their customers -- just to be able to cling onto the way things were before.

I have been saying for a very long time that music artists should try to concentrate more on making money with concerts and live performances, and now we are very much starting to see that happen. A much greater percentage of revenue now is coming from live events and much less coming from CDs. This actually cuts out all the useless fatcats and "marketing" geniuses at the labels, which is a good thing. The artists get paid, the fans get a live show, and the recording industry clowns who have been cramming Britney Spears and Nelly down our throats can go get jobs doing something useful and productive.

Movies and DVDs are kind of a tougher situation. But it will probably come down to making the theater experience better and more unique (larger IMAX-style screens, better seats, serving cocktails, 3D, etc). And of course I have been arguing for years that the best way to fight DVD and Bluray piracy is to slash prices on those discs to like $5. The volume would make up for the price drop, and people would be less likely to tie up their broadband connections for 10 hours downloading a Bluray if they could buy it at the local store for 5 bucks.

But of course, all this assumes that people in the recording and movie industry are logical and reasonable -- which has been proven time and again to be untrue.

Roberto B

04-26-2009, 11:42 AM

To be honest, I have not purchased a CD in like 8 years -- ever since Napster. here's part of why sometimes the gang loves you

Chris Kenny

04-26-2009, 12:09 PM

Well I definitely disagree with anyone who says that piracy does not harm sales of DVDs, CDs, etc.

Have some links:

http://www.psfk.com/2009/04/music-piracy-may-actually-help-sales.html

"The research examined the buying habits of 2,000 online music users, and found that those who downloaded tracks for free (both legally and illegally), were 10 times more likely to pay for music. The subjects often said that the freely gotten music was used to inform their subsequent purchases."

http://techrepublic.com.com/5208-6230-0.html?forumID=102&threadID=243454&start=0

"Overall the researchers found no difference between pirates and other people in the number of CDs they buy. They did not find a positive or a negative relationship between filesharing and CD sales."

http://www.allacademic.com/meta/p_mla_apa_research_citation/1/7/2/9/6/p172966_index.html

"The results show that the overall impact of piracy is slightly positive. This implies the counterintuitive conclusion that theatrical movie sales have at least slight benefits from movie piracy."

It's counterintuitive. But it's substantially less counterintuitive when one considers just how few DVDs and CDs people normally buy, and just how small a fraction of available content people are exposed to. Someone who discovers they like a movie by illegally downloading it becomes far more likely to buy it than someone who isn't really aware of it. Obscurity, not piracy, is the major threat to most content, especially the stuff that doesn't have hundred million dollar marketing budgets behind it.

Tom Lowe

04-26-2009, 12:10 PM

the only gang members i want to impress are the rumored sexy female members. :ihih::ihih: :beer:

michael zaletel

04-26-2009, 12:44 PM

And the biggest culprit, ironically?

REDBOX. :)

-michael zaletel
(shooter)

Gavin Greenwalt

04-26-2009, 01:04 PM

When HD-DVDs were competitive with rental prices I bought 40 of them. That doubled my owned movie collection.

Steam has seen 1500% increases in sales by reducing their prices by 75%.

People are willing to buy stuff. If they're at rental prices. If movies were $4-5 Netflix's rental model would implode. Especially if that was an on demand subscription.

I have a Zune Pass. I buy like MAYBE 1 CD per year. Before Napster I bought MAYBEEEEEE 1 CD per year. I'm a radio junkie. I want new stuff not the cd over and over and over again unles it's really that good. If piracy went away I would just listen to ther adio. Now I have a zune pass.. even piracy is obsolete. I get to keep 10 songs a month permanently and I have free access to hundreds of thousands more on a rental system. Price? $15 a month. So I've gone from buying 1 maybe 2 CDs a year to now effectively buying a CD a month for $10 and getting access to every other song while I'm subscribed fro an additional $5. That's the kind of deal that makes the music industry money.

If the movie industry wants the same thing they need to offer: HD. On Demand. For less than $3 for rental $6 to own (offer the sale after they've rented it.) "Would you like to purchase this movie for an additional $3? Truth is almost nobody actually watches a movie more than once but we think we will. So we watch a great film. We're on that movie credits high and it asks if we want to own it? You bet! $3 extra into their pockets. All it does is remove the DRM which sets the movie to expire. No additional download (unless maybe you want to download the 1080p version but stream downloaded a 720p).

Are people more likely to rent and rip if it's even easier? You bet. Who has actually bought WinZip or WinRar? It's been pestering me for like 18 years that my demo has expired. But it's free and it keeps working... so I don't bother spending any money. It's human nature. "Why would I pay for this. It's working fine and it's free."

But at $6 a pop. I'm not sure it makes any sense what so ever to rent and rip. That's half the price of a DVD. If you increased your rental habits to get more movies you're still paying $6 to blockbuster. The bottleneck on my Netflix account is always ME, not netflix. I haven't sent back a movie in about 18 months. :D As soon as their entire portfolio is instant-view this debate will be meaningless.

A) I can view it instantly on Netflix
B) I can rent it on netflix. Rip it and then watch it later.

Either way I can watch it on Netflix whenever I damn well please!

Chris Kenny

04-26-2009, 02:08 PM

When HD-DVDs were competitive with Steam has seen 1500% increases in sales by reducing their prices by 75%.

This is a great example. I'm probably going to have to steal it.

Either way I can watch it on Netflix whenever I damn well please!

See, I bet that when studio and network executives hear things like this, they don't think "Wow, we really need to offer our customers a better value", but rather "I wonder if we can pass a law against Netflix".

Gavin Greenwalt

04-26-2009, 08:01 PM

Here is an even better one from steam:

http://www.shacknews.com/onearticle.x/57308

Valve co-founder Gabe Newell announced during a DICE keynote today that last weekend's half-price sale of Left 4 Dead resulted in a 3000% increase in sales of the game, posting overall sales that beat the title's original launch performance.
Newell also mentioned that new Steam customers jumped 1600% over the same weekend, according to G4TV. Retail sales remained constant.

Sales of Team Fortress 2 went up 106% following a free update to the game. Retail wasn't left out in this case, with sales jumping 28%.

The massive Steam holiday sale was also a big win for Valve and its partners. The following holiday sales data was released, showing the sales breakdown organized by price reduction:

■10% sale = 35% increase in sales (real dollars, not units shipped)
■25% sale = 245% increase in sales
■50% sale = 320% increase in sales
■75% sale = 1470% increase in sales
Furthermore, Valve has hired an experimental psychologist to maximize the excitement of Steam sales and other marketing opportunities. According to Newell, one suggestion by the psychologist was to provide one free copy of a Valve game to every 25th buyer of Left 4 Dead.

Steam is also selling old games right now for like $3. I admit. I've bought 2 of them. Haven't even installed them yet. But hell for $3 I know I've got a good night's worth of entertainment if I'm ever bored.

Take special note when they say "3000%" they're talking about PROFIT. Not sales. PROFIT. They increased their profit by 3000% by selling it at discount.

This is great for indies too. Why? Because if you're a nobody who is going to drop $10 to see your movie? Who is going to walk into Hastings and see "Primer" and say. "Sure $10 for an unknown... why not!?" Now change that and make movies $2-3 for an on demand movie. Suddenly it becomes "meh if I quit half way through, it's still worth the risk." And they rent 5 movies. You make the cost in their brain so cheap that it's 'free'. For me a $5 movie that you own is free. And I will spend a ton of money buying lots of 'free' movies. Even if I have seen no reviews for it.

The studios will be wary of this though because suddenly the blockbusters (which they assume everyone will see anyway) aren't commanding a premium. The AAA titles which they assume will do gang busters anyway and cost a ton of money to produce will be sold for less. So there is an argument that the expensive films would need a slightly higher price. But if you want to move lesser name movies or if you want to sell older films (maybe 3 weeks after DVD release) then I definitely think a huge sale should be available.

Tom Lowe

04-26-2009, 09:02 PM

Steam is a fantastic example. I bought GTA 3 or something like that off steam a few months ago for less than the price of a movie ticket. Instant download and play. Very cool. The movie industry should pay attention to Steam.

Curran Giddens

04-29-2009, 06:36 AM

I have not purchased a CD in like 8 years -- ever since Napster. I used to buy dozens of them every year.

I was the opposite during the Napster years. But that is because I am somewhat of an audiophile. I was exposed to so much more new music than I would have been without Napster. And since 128kbps mp3 files didn't cut it on my B&W Nautilus 802's, I would order the CD online.

Andrew Kimery

04-29-2009, 10:55 AM

Take special note when they say "3000%" they're talking about PROFIT. Not sales. PROFIT. They increased their profit by 3000% by selling it at discount.
Where does it say they are talking about profit?

-A

Eric S.

04-29-2009, 11:14 AM

Wow Gavin. Thanks for the posts. Very interesting.

Not that I'm an expert on these things, but I think the best way to combat piracy isn't with legislation or litigation (which tends to rile up the transgressors), but rather with affordable convenience.

I mean, I'll be the first to admit that I've downloaded TV rip torrents from the net. But without a DVR, it was the only way I could watch some of my favorite shows with my schedule. But then Hulu took off and offered decent streaming programs on-line. Now Youtube too. Very convenient, so I'm willing to sit through a few ads. The cost / convenience ratio was good.

I think this is one reason why the net neutrality battle is so fierce. Imagine if big industry controlled the best fiber optic lines. They could offer basically instant access to media content while P2P would be mired in speed bottlenecks. I support net neutrality on principle, but I wonder if tiered service wouldn't help our industry combat piracy more.

It's a complicated issue. I'm glad I'm not an executive right now.

Eric

Gavin Greenwalt

04-29-2009, 04:11 PM

Where does it say they are talking about profit?

-A

Well I guess it depends on your definition of profit. I assume all of those games have payed themselves off already. So every $ made is $ going to profit - a few bucks for bandwidth.

This as opposed to saying that they sold 3000% 'more games'. They sold 3000% more dollars worth of games. So they aren't saying we sold 30x more games. They're saying they sold 30x * (1/saleamount) copies of games.

In other news since my DVR breaking I've started watchign 100% of my colbert and daily show through their respective websites. And it looks as good as SD Comedy central. I watch more ads now than I did on my DVR.

Joe G.

04-29-2009, 06:02 PM

BluRay is a complete ripoff. RedRay could blow them out of the water by simply NOT being so God damned greedy.

"The Cost of Doing Blu-ray Business

With its slew of legal agreements, upfront charges, recurring fees, and other imperatives, BD replication is a time-consuming, expensive, and all-around frustrating proposition for small- and medium-sized publishers.

Quantitatively speaking, for 1,000 copies of a simple title, all these demands add at least $7.54 overhead to the price of a single disc (calculated as a one-shot deal). Based on my earlier examples, this works out to roughly $11-12 (SL) to $13-14 (DL) each for a finished product. Ordering more units and amortizing the one-time and annual fees over multiple titles and years will dramatically reduce these estimated figures, but cost-efficient replication is, obviously, geared toward frequent high-volume production."

LINK (http://www.emedialive.com/Articles/ReadArticle.aspx?CategoryID=44&ArticleID=14071)

Tom Lowe

04-29-2009, 06:08 PM

Bluray has to rip people off because Sony bankrupted themselves to win the HD DVD war, by literally giving hundreds of millions of dollars, IN CASH, to the studios to bribe them.

REDray would have no such legacy cost.

Gavin Greenwalt

04-29-2009, 06:22 PM

Yeah but REDRay *would* require $1,000 in hardwrae.

Tom Lowe

04-29-2009, 06:38 PM

Yeah but REDRay *would* require $1,000 in hardwrae.

Well, hell, Bluray players were even more than that when they first came out. Hopefully Jim will let other hardware manufacturers build REDray devices.

Thom Steinhoff

04-29-2009, 06:52 PM

Yeah but REDRay *would* require $1,000 in hardwrae.

Ask Jim what he thinks he could sell them for if he thought he could sell 2 million units? 10 million units?
or even 1 million units?

Luis de la Cerda

04-29-2009, 09:59 PM

Well, here in Mexico, the whole CD-DVD story is a little different. 10 years ago I would buy around a movie a month (laserdisc) and 2-3 CD's. Back then DVD's and laserdiscs were expensive U$20-30 and CD's around the same. But then, something happened, don't ask me what because I have no idea, but today DVD's are dirt cheap over here. Original 100% legit DVD's at the store. Some titles you can get for as low as 3 bucks. Meanwhile, CD's have remained at the same cost and nowadays compilation CD's are almost non existant. Let's face it, most albums have a song or two you actually like, and 10 dollars a song is a little steep. So today, I buy around one CD every 5 years (must be something really special) and 10-15 DVD's a month.

Btw... We have cheaper movie theater tickets over here as well. For around 10 dollars a month you get a membership to get into as many movies as you want. Unlimited cinema at the theater for 10 bucks. For 10 extra you get unlimited IMAX and VIP entries thrown in. VIP screens are something like what Tom said: Waiters, cocktails, leather recliner seats, etc...

Actually, it's a very clever scheme: movie theater chains want you to sign up on their membership so you'll attend their theaters exclusively. This insures every dollar you spend on popcorn/sodas/etc... will be theirs and not their competition's. It also makes those with paid membership convince their friends to attend the chain where they hold their membership when attending a film together. Regular tickets are like 4 dollars for regular screens, 6 for Imax and 8 for VIP.

Gavin Greenwalt

04-29-2009, 10:01 PM

Dude. Theater memberships? Sign me up. And if my netflix account is any testament... they would definitely come out ahead financially. :D

Andrew Kimery

04-29-2009, 10:32 PM

Well I guess it depends on your definition of profit. I assume all of those games have payed themselves off already. So every $ made is $ going to profit - a few bucks for bandwidth.

Maybe gross revenue would be a better term to use than profit since we don't all of the costs they have to cover (and bandwidth on a large scale is more than just a few bucks)? Left 4 Dead is a very big hit so I think it's safe to assume all the initial costs (development, marketing, etc.,) have been covered, but there are still continuing costs such as tech support, patches, dlc, etc.. Left 4 Dead being a hit game allows Valve to have the occasional loss leading sale but that doesn't mean it's viable for everyone nor does it mean that selling the product at a bargain-basement price from launch is a viable business model either.

It's kinda like when NIN and Radiohead released pay-optional albums over the internet. Sure, it might work for them but that's only after nearly 20 years of garnering a massive world wide following, earning 10's, if not 100's, of millions of dollars, and selling music the 'old fashioned' way. ;)

-A

Gavin Greenwalt

04-30-2009, 12:05 AM

Tom Lowe

04-30-2009, 08:44 AM

Theater membership? Very cool! They would stand to make a lot of money on concessions from repeat viewers, including cocktails and beer!

Plus the local taxi cab guys can rake in profits from shuttling home smashed moviegoers... it's a win-win. :thumbsup:

Andrew Kimery

04-30-2009, 11:09 AM

Absolutely. The converse is also true though. I only pay bargain basement prices for things which are unproven. Once proven then I'll pay extra.

Millions of people are willing to pay $1. Thousands are willing to pay $10.

I would say there is an inverse bell curve of profitability. Charge a bunch and extract as much as you can from your target demographic which will spend regardless. (Opening day launch syndrome). or Charge nothing and get exponentially more customers who are willing to make an insubstantial risk to try you. Or even purchase you for show. (Netflix Classic Movie Queue syndrome.)

I would say most people ride down the middle territory too often and don't charge enough to break even from their captive audience but still charge outside the range of an impulse buy.

The only way you can fight piracy is to grab the impulse buy.
People do love things on sale. I don't know if Best Buy still does this, but they used to sell new release CDs at a 20-25% discount for like the first week they were out and when BB was my main source of music I would always pick them up during that sale period. If I missed the sale period then I'd be less likely to buy the CD (or at least less likely to buy multiple CDs at a time).

There is a line though between making people feel like they are getting a good deal and making people feel like your product is crap which is why you are asking so little for it. I do agree that most sellers stay middle of the road to play it safe. To bring up Steam again, they are having a Left 4 Dead free Friday tomorrow where people can get a free copy of the game that expires after 24hrs.

-A

Eren Ozkural

04-30-2009, 05:08 PM

We have cinema memberships here in England as well, at the cineworld chain:
LINK (http://www.cineworld.co.uk/unlimited)

The cheaper option excludes the best cinemas in central London. I go for the more expensive one at £16 a month.

Im kicking myself for not doing this sooner. As of late I've been watching every movie I can get my hands on. On average, unless im on a shoot or it's a gruelling post deadline i go watch 4 films a week.

Hell, I saw Knowing projected digitally, walked out and bought another ticket to watch the first 20 minutes from the front row to see if there was any noise or aliasing.

Same with Che, except I went to one film print and sat half way through a digital showing.

I also bought a whole bunch of Watchmen tickets...not that it did much good, apparently.

Sean

04-30-2009, 10:32 PM

As for DVD pricing, I'm always taken aback by the price of an indie DVD. You know, a film that was a favorite on the festival circuit--I read about it online and wanna see it. But it never comes to a fest in my city. And then a couple years later I come across it on DVD for $35. I just won't spend $35 just to see the movie once. Often the film isn't that good! I do want to support artists. But would probably support a lot more of them to the tune of $12 a pop and not $35.

Chris Kenny

05-01-2009, 06:11 AM

Or maybe have a free downloadable SD version and sell a Blu-ray for $35. That way you still get the cash from your true fans (nobody else was going to pay that much in the first place), and hopefully you have more true fans because more people have seen your movie thanks to the free download.

Chris Kenny

05-01-2009, 06:18 AM

Here's a refreshingly productive attitude about the piracy issue, from the CEO of a game publishing company:

"Demigod debuts at #3 for top selling PC games at retail – bearing in mind that that was a partial week and that the majority of units sold were digital sales which weren’t counted.

But...but...what about those hundreds of thousands of pirates? Yep. Demigod is heavily pirated. And make no mistake, piracy pisses me off. If you’re playing a pirated copy right now, if you’re one of those people on Hamachi or GameRanger playing a pirated copy and have been for more than a few days, then you should either buy it or accept that you’re a thief and quit rationalizing it any other way.

The reality that most PC game publishers ignore is that there are people who buy games and people who don’t buy games. The focus of a business is to increase its sales. My job, as CEO of Stardock, is not to fight worldwide piracy no matter how much it aggravates me personally. My job is to maximize the sales of my product and service and I do that by focusing on the people who pay my salary – our customers." Link (http://forums.demigodthegame.com/349758)

The game is sold without DRM.

Radoslav Karapetkov

05-01-2009, 07:29 AM

Maybe they should wake up.

Eirik Tyrihjel

05-01-2009, 02:40 PM

I have two blu-ray players, one European and one American... because I want to buy movies from wherever I want to (whenever I want to) but because of DRM (Digital Restrictions Management or Copy protection to us mere mortals) I need two players - you go figure!
However I am more stubborn than they are...

BTW: I HATE DRM, it´s defective by design And I HATE it!, I HATE the way Disney has 8 trailers that you HAVE To skip through before letting the kids see their favourite movie, I bought the d@mned DVD - I Paid for it!!!, I HATE how you have to watch the anti-piracy FBI warnings, I paid to get the blu-ray/dvd, they guys who illegally download the films they don´t have to see the warnings... It doesn´t make sense!
And at the end of the day DRM only stops the people who paid in the first place, NEVER EVER the pirates, they figured out a way around it the day after it came out...

CUT THE CRAP!

Now that felt great saying in a REAL names forum!

Sorry if I went too far OT, but I needed it off my chest!