Prelim thoughts on Amazon moving into movie download fray: do it cheaper


Cheap 3D GlassesApple's iTunes will probably start offering movies soon, and Amazon too, has entered the movie download biz according to press reports today. Amazon (AMZN) will also offer television shows, priced at exactly what iTunes charges: $1.99 an episode. Movies will cost around $8 to $15 at Amazon, and movies can also be rented for around $4. No idea how extensive their offerings will be, but if $15 is the high end for new releases that seems fairly in line with what Apple's expected to do. Consumers will have to figure out their own storage means for digital movies they decide to buy. Will you be burning each of these to a DVD, effectively transferring the manufacturing process to your home? Or will you store everything on drives? The main advantage to me seems to be the ability to get the stuff immediately, and without shipping charges.

Just today happened to read a New York Times article about online-only magazine subscriptions, and was struck by the fact to many online-only subscriptions cost exactly as much as buying the print version. The publisher gets to pocket the money saved in printing costs, and this is probably partly why, for example, Popular Mechanics has 1.2 million print subscribers and only 5000 email digital subscribers. Call it: "we cut costs and don't pass the savings on to you" merchandising. Asking us to give up the sense of ownership that a hard copy provides ought to be worth a deeper discount off convention media on this stuff. Make it cheaper and we will buy more of it.

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