A report from the New York Times says that Microsoft's (MSFT) Xbox has had double-digit growth for it's VOD service month after month since its introduction in November 2006.
Through it Xbox LIVE Marketplace, users can download regular movies and some in high definition. Users can also dowload episodes of television shows to own. Basic membership for the service is free.
Xbox Live offers members around 2,000 hours of professional video content from media companies like ABC (DIS), Warner Bros. (TWX) and MTV (VIA-B), among a number of others. Prices for the content are from $2 to $6.
The only problem with this is, as we talked about recently: "A study from The Diffusion Group, shows that while 80 percent of those owning a game console have the ability to play a DVD or download online video, only 13 percent use the feature."
So using the term double-digit growth is probably accurate, at the same time the revenue is probably miniscule. It shows that the adaptation of the service at this time is very small, which is the only reason it could be growing at such high percentages.
Overall, what this reveals is there is a lot of things that need to be put into place before this type of service really becomes part of our everyday lives. I think people really want this type of thing, but things like download speeds for high def movies and shows will have to improve before it really takes off.
It also seems companies will need to all have exclusive content of some sort to keep from becoming a commodity business. Netflix (NFLX) has been slowly working on this with their buying up of exclusive rights to movies.
With the viewer experience really being no different than current video-on-demand services, there's really not a lot of reason that users will find to take advantage of this service on game consoles. This is reflected in only 13 percent of those having download capabilities with their consoles using them.
We're still quite some time away from this reaching scale and people adopting it as one of the major ways they consume video.
Comment Preview