The future of Video On Demand

// August 18th, 2007 // photolog

I’ve been working with a dutch VOD company for some time now and I can say it’s a though business. The main problem in this market is the the monopolistic position of the content owners. There are several companies in the Netherlands that have the technology to create high quality streams and they are all willing to bring you the latest movies, on demand. Why is this not happening yet?

Future of content

Content owners like Warner or Sony Pictures are asking ridiculous advanced fees for their products. You have to pay at least 250k to get a license for a few movies that are already available in the local supermarket for a few bucks. The contracts that go with these deals are really tight, the major movie companies are making all the decisions in this business (e.g. DRM, availability, pricing). Why don’t they understand that this is only encouraging illegal downloads.

I’m glad to say this is finally changing and some majors are willing to cooperate with the online distributers. In the future it will be more easy to get a deal because this is the only thing content owners can do to prevent illegal distribution.

Quality of streams

A big part of the quality is related to the bandwidth, you’ll get a better image if you send more data. In a country like the Netherlands there are a lot off cities getting their own fibreglass networks. The capabilities of these connections are great if you compare it to an old fashion ADSL or cable connection, especially for streaming content.

Besides the bandwidth it’s important to use the right encoding techniques. More companies are specializing in this and the future will give us great quality movie streams. A nice example is Best TV, a company thats using techniques developed by the Israeli army to encode movie files. Off course you’ll need a high quality source file to get the best results.

Digital Rights Management

People always complain about DRM licensing but at this moment it’s the most common way of protecting a media file. I see two options for the future on this part. The first is a major improvement in the abilities of DRM (like an online storage of the license so you can play the movie on every pc if you payed for it). The second is removing the DRM for media files, apple is playing with this right now.

I think the first option is most likely to occur in the near future. Content owners loose a lot of control if they completely remove all protection, and they won’t let this happen.

Set-top boxes vs computer

It’s great to watch low quality content like YouTube movies on your computer, but when it comes to blockbusters this is totally different. Watching a movie is better on a tv then it is on a computer. The early adopters in this world had their pc connected to a tv years ago (normally you only need one cable for this). More and more people are getting a pc to tv connection these days, but it’s still only a small percentage of the total computer owners. It would be great for the video on demand business when all people can watch streaming content on their tv.

A major change will happen when set-top boxes get more common. I have seen some great set-top boxes and in the future it will be build-in hardware in every tv. These build-in set-top boxes have different channels, including a video on demand service with all your favorite blockbusters.