has attracted more than 20 million subscribers, more than 20,000 movies
and television shows for its online service, and more than its share of
headaches in
There’s one thing it has yet to attract: competition.
That will probably change. Retail giants such as
Such moves would win cheers in
fast-growing customer base is buying fewer DVDs and watching less
television, contributing to the financial struggles of studios.
“This is a battleground that’s just starting to brew,” said
But it had better happen soon. Observers believe that once
surpasses 30 million subscribers — a goal that analysts say the company
could achieve as soon as 2012 — it may become difficult to unseat the
International expansion will further broaden its reach.
So far, none of the company’s potential competitors
has started writing the nine-figure checks necessary to secure a
library of movies and TV shows to rival
The studios hope a bidding war for streaming rights to content will help to offset declining DVD sales.
“A lot of companies seem to be looking at
intends to use the struggling home video company’s brand name and
technology to launch an Internet video service, people with knowledge
of the plan said. A Dish spokesman declined to comment.
the No. 1 and No. 2 DVD sellers in the U.S., have acquired digital
video businesses to help make up for plummeting revenue from discs.
A spokeswoman for Vudu said, “At this time, we are focused on a pay-per-content, transactional model.” A
Hulu, the popular free TV website, has also talked
to the studios about increasing the number of movies on its
subscription service Hulu Plus, people briefed on the matter said. A
spokeswoman declined to comment.
Some cable companies are gunning for
as well, although their online services are tied to pricy TV
subscriptions. HBO has a Web version of its cable network called HBO
Go. Similarly, iN Demand, a video-on-demand venture whose co-owners
include
is said to be looking to expand its tiny Web movie offering Vutopia,
which has only about 200 titles. A spokeswoman said Vutopia will “ramp
up slowly.”
number of advantages that make it difficult to challenge, such as
sophisticated software to recommend what users might like to watch and
a brand name that’s becoming as familiar as
But retailers and cable companies have their own
marketing strengths and reach huge audiences, including many who don’t
live in affluent urban communities where the lack of a
In addition,
online library has a limited number of recently released movies, as
many of those rights are locked up by HBO and other pay cable networks.
around for more than a decade but became a powerhouse only recently, as
its subscriber count has more than doubled in the last two years and
its market capitalization has more than quintupled to
That’s largely because of its online service, which is becoming
increasingly popular on Web-connected TVs as the company’s original
mission — shipping DVDs through the mail — declines. Last year
consumers streamed about 329 million videos from
The company is projected to increase its spending for online content from
Studios can’t scoff at that money, but some fret
that it’s a deal with the devil, trading short-term gains for a
long-term erosion of their other businesses as consumers come to rely
on
gains even more power over how movies and TV shows are sold to
consumers and are eager for competition to prevent that from happening.
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(c) 2011, Los Angeles Times.
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