Media Wars – Response to Reader Comment
Reader Linda N recently commented on my post titled “ Media Wars Part 2 of 2: Focus on Content and Easy Digital Distribution “
Faisal, I think you’re missing some important points about VOD. Right now, I’m downloading independent films from Unbox, in about 40 minutes to my ZEN. I can watch on the train or plug it into my TV and watch in DVD quality. This allows me to watch sophisticated independent films, that I could only get from Netflix in the past, except now I don’t have to wait for the mailman and I can take my content where ever I want. It’s simple to use and less expensive that buying DVD’s at retail stores. Amazon got it right with Unbox. The also have content from all the studios except Disney and I don’t know many adults that care about Disney films anyway. ZEN is awesome – best quality image and awesome features not found on video iPods. HP will give Walmart a great platform for downloading and offer tons of titles not available on iTunes (who currently don’t have any independent content). HP will also provide DVD by mail for them, as well. EZTakes.com already has films for download that burn a DVD on your PC that you can play on any DVD player attached to your TV, so the technology is all in place to make it easy for people to use VOD. Neflix’s streaming doesn’t make any sense at all, as you have to watch it on your PC. Boring. People want their content to be viewable anytime, anywhere and now they can do it. CinemaNow and MovieLink were too paranoid about piracy, so their content is only studio based and viewable on a PC. I think Amazon and Walmart have a great chance of burning up the market with their VOD services.
Linda – first off, thanks for the comment. I want to clarify a couple of things. I don’t deny that the technology to download movies onto portable devices lacks significance. In fact, I too use a lot of these services. I believe Amazon and Tivo will have an exciting product, and Walmarts download service is cool, as is Movie Gallery and Cinema Now. Netflix continues to look into downloadable content. Even they have a relationship with Tivo that might come to fruition at some point. Even Blockbuster is looking to get into the space now with attempts to acquire Movielink.
Amidst all this competition, consumers like us always come out on top. Individuals who want to download and watch on PC’s can do so, those who want to download to their Zens and iPods can do that and those who prefer the comfort of the living room can enjoy movies at their finger tips. But the goal of my post is not to dispute technology. It is to point out how investors can profit from these technologies. Until these technologies reach or capture an audience large enough to make a significant contribution to their earnings, they do not serve investors a reason to buy the stock. As such, I do not like the stocks of Amazon and Walmart at all. I do like some of the cable companies, particularly Time Warner. I like Blockbuster for a few more months (I think they will have a couple of upside surprises over the next 3-5 months), while Tivo and Netflix are a little speculative here.
Are there certain stocks that you like here?
– Faisal Laljee
