The Future of Movies

Ok, I'm not a technology wiz but I don't think it takes one to know that one day the DVD will be reminisced much like the VCR is today.

About 3 years ago I had a conversation with a couple investors who swore that even though you can rent DVD's online easily through Netflix, Blockbuster was the better investment because there would always be a need for a brick and mortor movie business and therefore they had the stronger competitive advantage. I was then shot down when i said that although that may be true the demand for a brick and mortor movie business would shrink and therefore Blockbuster was not a good investment. By the way, how many of you have seen your neighborhood Blockbuster shut down? I've seen 3.

The way I see it is that the movie business is actually in the technology business. The DVD will become obsolete and so will any physical form of a movie. I can already download and order a variety of movies directly to my TV whenever I want. Well it took awhile for Blockbuster to realize that they're actually in the technology business and not just in the movie rental business. I read today their most recent move to save their skin.

"In an experiment that tests consumer appetite for online movies, Viacom Inc.'s Paramount Pictures movie, "Jackass 2.5," is skipping traditional theatrical release in favor of online distribution.

The movie, from Paramount and MTV New Media, is the second sequel in a franchise based on the MTV program that features violent, often stomach-churning stunts. On Dec. 19, "Jackass 2.5" will be available exclusively on Blockbuster's Web site for free streaming, meaning viewers can watch but not keep the movie. Starting Dec. 26, the movie will be available for purchase on DVD at all major DVD retailers, but for rentals the DVD will be available only at Blockbuster.

The move comes as the studios explore new media in the face of lackluster revenue in traditional outlets. Box-office sales are down about 7% for the holiday season beginning Nov. 2, according to Media by Numbers LLC. DVD sales are down for the year, dropping 1% so far in the fourth quarter, according to Nielsen VideoScan.

If Paramount can show this tactic brings in revenue, it could become a template for movies aimed at young, Internet-savvy viewers.

The movie was planned as a digital release from the start. "When you think about what people generally consume online it's fairly low-end user-generated content, yet there are hundreds of millions of people online watching video every day," says Tom Lesinski, president of Paramount Pictures Digital Entertainment.

Starting Dec. 26, it will also become available for sale online at other outlets like Apple Inc.'s iTunes. From Jan. 1, downloadable rentals of the movie will be available exclusively at Movielink, which Blockbuster bought earlier this year."