DVD rentals not threatened by digital movie downloads

September 10, 2006

With Amazon, AOL and iTunes, along with a host of other outfits, offering DVD quality video for download, you might think that the old standby rental disc paradigm would be in danger. Well, not so, says the rental industry, who are even backed up with some studies from professional analysts...

The reluctance to watch full-length films seems likely to decline as cheaper portable video players are produced, video quality improves and media- savvy personal computers attached to television screens become more widespread, analysts say.

But Andreas Poliza, founder and chief executive of Amango, Germany's biggest DVD subscription service, said that would not happen soon.

"Habits in mainstream living rooms change very, very slowly, and most people like the simplicity of a DVD," Poliza said. "Only the real geeks, like my brother, would use an iPod to watch a movie on TV."

Until the technology is more mainstream, video on demand via computer will be a complementary service rather than a competitive one, said Morris, of Lovefilm.

"DVD is the distribution choice for customers right now and for the next few years," he said. "The tools are just not in place for a quick switchover."

In addition, there are bureaucratic hurdles to global downloading, said Aleksandra Bosnjak, a film and television distribution analyst at the research firm Ovum in London.

"The Hollywood studios make regional distribution a nightmare by limiting rights to three or four countries at most," Bosnjak said. "On top of that, the European Union is drafting regulations that you can be sure will favor European companies."