BluRay and HD-DVD will die a slow death once digital distribution becomes more acceptable. This is a good start.

You know what's funny is the Amazon service actually shows you how to stream your downloaded movies through the 360 via Media Center:

1. Download an Unbox video to your Media Center PC.
2. From the Xbox 360 Dashboard, go to the Media blade and select Media Center. Your Xbox will connect to your Media Center PC.
3. Select "My Videos" and then "Amazon" to see all of your Unbox videos.
4. Choose your Unbox video and enjoy!

The problem with downloadable movies, which is the same with games, is that they charge retail prices. They need to knock a few bucks off since you get no disc or box. If they ever get around to doing that then I think these services will really take off.

20 GB hard drive seems to be working so far, remember xbox doesnt require a partial install of your games.

The movies are using storage on a temporary basis.

Im sure Microsoft has a bigger drive in the works.

Xbox 360 and PS3 and demanding attention for these features.

Dirtboy... Same can be said about music downloads. People get over the material need to have an actual CD is the convenience is there.

"BluRay and HD-DVD will die a slow death once digital distribution becomes more acceptable. This is a good start."

That's like saying the digital distribution of music on the internet has killed the sales of actual CDs. It's your opinion, and I applaud you for practicing your right to state it... but I disagree.

However, I believe HD-DVD and BluRay won't fully replace DVD for quite some time.

Hard media will never go away, because there will always be a segment of the market that wants to physically own something tangible. People like to get so called "Special Editions" with packed-in junk because they appeal to collectors. The digital distribution sales are more likely to impact rentals.

I'm absolutely loving the whole streaming and downloadable content thing..I got rid of my cable months ago because I got tired of being raped by them..Luckly I have FIOS in my area..I dl all of my TV shows and stream them directly to my 360..It's so sweet...

"I dl all of my TV shows and stream them directly to my 360.."

And you do so in standard-def, worse than DVD quality, with higher compression rates.

As for the Xbox download service itself, they do offer some HD downloads, but it's not even a drop in the bucket compared with what they'd need to gather a critical mass.

Let me put it this way: saying the Xbox download service is as successful as Amazon.com Unbox (and that is what the post above says) is not a compliment.

Let me put it another way: the number of Netflix rentals of physical DVD's dwarfs the number of iTunes video downloads by a factor of about 1,000:1 on a daily basis. The number of iTunes downloads similarly dwarfs the number of Unbox downloads by about 100:1. That's the level of success Microsoft has reached.

Oh, I should add that my Netflix comparison includes HD-DVD's and Blu-Ray discs, because they rent those as well. I didn't make that clear enough.

i think ms have nailed it as a easy to use service with good bandwidth allocated, i feel that if the 360 install base keeps growing stuidio's cannot afford to keep there distance, as consumers who current own a 360 have extremly high attach rates implying a hardcore base and these are the peole that are going to buy hd movie, hd dvd or blu ray.
personly as a consumer i think this service is a great alternative to the upcoming formate war. when dvd came out the difference between it and vhs was huge but we are not seeing the same with bd and hddvd, to justifie a player is hard. but the abbilaty to play games is a great bouns, this still does not justifie a ps3 as they still have not shown their movie serivce plus the network it self have had teething with just a few hundred thousand user downloads(gt hd demo)
so sony may have a good selection of studio's but if they cant do the tech behind it, it will be useless

i think that sony service will be half asked and will insted try to shove blu ray down peoples wallets

now if MS would just get Adult Swim TV shows in HD they would totally fucking rule the market.

PT Barnum was right when he said that there's a sucker born every minute. And Microsoft is cashing in on suckers who are paying premium prices for restricted content.

It defies common sense to pay top dollar to download videos that can only be played in a single device (XBox360). In this age where video can be played on cell phones, mp3 players, portable DVD players, PDAs, notebook PCs, etc. having a video that cannot be transferred to play on another device... or simply in another room, is foolish.

Without physical media, you are held at the mercy of the content provider.

But for those people with more dollars than sense, more power to you...just don't proclaim the demise of physical media until you are sure you can continue to have access to the content you paid for.

I'd jump on the digital distribution bandwagon myself, but I just don't understand the price. Why (aside from raping consumers for profits) should a %100 digital service cost the same amount per episode as a digital service that comes burned on a DVD with a case?

I'd gladly buy some episodes of various shows from Amazon's digital distribution service (to watch on my projector from my 360), but only if the price drops.

With that in mind, I think there are several factors holding back digital distribution right now.

1) Price: There is no reason it should cost the same as buying a DVD. At the very least, episodes could be packed together by season to lower the cost, but it should definitely be AT LEAST 1/4 less than it does right now.

2) Consumers are not Tech-savvy: The only reason iTunes has become such a success is that Apple made it quite user-friendly to non tech junkies. But even still people prefer the old method of buying CDs, and I think it is in part that people just aren't very tech-savvy. People KNOW how CDs work, but people DON'T know (yet anyway) how digital ditribution works. And until they do, they aren't going to buy into it.

3) No Advertising: Unless I missed it, there hasn't been any big advertising on digital ditribution of movies, except for Apple's service. This goes hand in hand with number 2. I'm sure many consumers just don't know what it is yet. If there was more advertising, it would be far more likely to catch on.

I've also heard the argument that there are always people out there who need a physical copy of something, but I don't really think thats true. If it is, it is a small portion of consumers. I mean, just look at how Digital Cameras have taken over the home photography market. Sure most professional photographers still use the old-fashioned models (mostly because it is still higher quality), but most casual photographers use digital cameras now, and they don't have definite physical copies. Yes, the pictures are saved to memory sticks, but that is no different from how a digital movie download is saved to a harddrive.

Ultimately I think digital download for movies just isn't taking off because most people still don't even know what it is, and because the price is unnecessarily high.

It's a shame. I'd love to see this take off, because I think it could be a great way to bypass the clunky and expensive HD-DVD/BluRay war. But so far it just isn't being implemented properly.

I certainly see what you're saying about paid content on one device. I don't disagree, but I do think we should keep in mind some future developments that are coming.

In regards to MS... love em' or not... they do have a plan or a developing plan. The kicker is going to be Live Anywhere. The content I purchase will be accessible whereever I can access my Live Anywhere account. So if I buy some music on Zune Marketplace, eventually I'll be able to access that via Vista, Media Center PC, Xbox 360 and other extenders and Zune just to name a few. From a strictly business and "Community" perspective... this ecosystem is brilliant. Remember, some folks were and are complaining about the MS Points system for purchasing stuff, but that will be tied to an Live account and makes it easier to give gifts and to buy content from across many domains whether you own a credit card or not. Now.. throw in spaces.live, soapbox etc and you're looking at a huge community.... There's a huge potential if they execute well. J Allard and Robbie Bach, should not be seen as typical old school Microsofties... remember Xbox was supposed to be the beginning and end for MS... look at them today.

sracer:

I understand your point, but at the same time, the prices for the HD movies on the marketplace are still only $6.00 - actually a bit cheaper than you'd find anywhere except NetFlix, and considering the movie expires after a matter of days, it fits right about where it should for HD prices.

The bigger problem here is when Microsoft is going to release a hard drive bigger than 20GB for the 360. With only 12GB available out of the box and all the stuff available for download in the marketplace, that space gets filled pretty quickly...

Brad Lee... excellent points. I will argue, however, about having a hard copy of something. With photos.. digital IS more portable.

With movies.. it's about the inset designs, the artwork, the added content, etc. I buy some movies like shows because I think it's funny but I don't necessarily want to own it. For instance, i bought a couple of episoded of Robot Chicken on Xbox MP. I could care less about having a hard copy. I do love the movie Local Hero and decided to buy that in DVD. There's definitely something about having a DVD that's sometimes better than just having a digital download.

Same for CD's... I sometimes buy cd's just for the artwork, story etc..

Well. I guesss we're all different.. but I bet there's a huge population that would collect hardcopies for at least the same reasons I've mentioned.

I find it ridiculous a company has to do this much (and more, when you count 3rd-Parties and advertisers) to pay for its online service.

It's great service quality for the XBL users, I'll give it that.

However, the content like music videos and tv shows and such shouldn't have a vested interest in the gaming economics though.

"And you do so in standard-def, worse than DVD quality, with higher compression rates."

How the fuck do you know what I'm downloading? If I was getting crap I wouldn't have mentioned it and I would have gone back to cable a long time ago..I really hate know it all that don't know shit...

BTW..Merry Christmas!

Jeff - invalid comparison, sorry. You do have to take userbase into account as well. iTunes has a huge userbase. And the point of an Xbox 360 is not to play movies, it's to play games. So if a reasonable number of people are downloading, if Microsoft is making *any* money at all, yeah, it's a success.

sracer - You have effectively stated why I don't like traditional rental schemes. And in my opinion, called renters idiots. You get no physical media in return for a time limit to use the product.

That said I do think that services like this will become more popular in the future, as it resembles more or less what OnDemand (TM) has accomplished. The big plus side is that you don't have to pay your cable provider $30 to $70 every month for the privilege.

I do like the download service a lot, but I hate having to browse for movies using only the remote. So I will either add a convenient search feature or better yet something that allow me to select my movies from a web browser. That way, I can log on using my msn account at work, select the movies I want (similar to what I do with my netflix account) and when I'm at home and turn on my xbox, the movie will start downloading automatically.
I mean, right now I have to wait at best 3 working days to get my movies from netflix, so waiting for a HD movie to download is not a problem for me.
By the way, I have not downloaded any movie as of now (only CSI episodes). I would like to know, do movies come with the same content as a DVD? Meaning, multiple language, director commentary and that kind of stuff..?

wow people still buy cd's why???? they just take up space and are a bitch to keep organized. With Mp3 players everywhere and car stereos that accept USB drives. there really isnt a need for Cd anymore

The article only talks about digital download RENTALS. For digital download purchase, iTunes Music Store is leading the pack by far.

heretrix:
I download some of the same stuff you do. I also have over the air (free) HD reception. The downloaded stuff is fine, but it's not HD level. Even the best stuff out there is only about 1000x550, which is 1/2 to 1/4 the res of real HD.

OTA HD reception looks a lot beter than what you're downloading, and HD discs (BluRay in my case, but HD-DVD looks great too) look even better.

At this time, I don't see downloadable movies beating out discs at this time. Perhaps in another couple years.

I just joined NetFlix, that's how much I believe in digital over the net movie downloading. It only takes me a day or two to get a new movie. And it doesn't tie up my network for an entire day. And, I can take the video to a friends house to watch it (as I'm going to do today). You can't do that with digital downloads, they're keyed to your place.

Great article, sadly, Canadian Xbox 360 users don't have access to any of this great content. It would be nice if for once, Canadians would be allowed to download this great stuff. It's bad enough we're shut out of iTunes for TV shows and Video.

I wouldn't say that M$ has nailed it, but they've laid down the groundworks for something everyone can see is going to be nice. I'm getting cable just because of my 360. I want to be able to play games without lag and start downloading TV Shows. Let's just hope they change their policy and start offering movies to own instead of rent.

And since M$ is working towards a cross platform future I would also like to see my PC download the TV shows or movies that I have purchased.

I want FREE TV shows on XBLM. You can even show me lots of ads if you want, just like (gasp!) REGULAR TV. Then I could care less about DRM and other usage restrictions. And video downloads would shoot through the roof.

The download service just sucks for Xbox 360. You could probably order a movie from netflix or something and get it faster than it takes for you to download the movie. Plus you don't get all the special features. I think microsoft did a horrible job on this service. Taking 1 day to download a 900 mb movie is just sad. Good bye

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