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Industry Insight
13 March 2001
Forrester: Consumers will not see movies via the Internet
BY
NEWSBYTES
[
13 March 2001
] -
Movie lovers can forget about seeing the latest from Hollywood on their PCs, if a new study released today by Forrester Research is correct.
Digital cinema and cable-based video on demand (VOD) - not Internet distribution - will change the way the public watches movies, the study said.
"The Internet will never be an important venue for the distribution of mainstream feature films," said Forrester analyst Eric Scheirer.
Theater chains will begin investing in the infrastructure for digital cinema in the next year or two, Scheirer said, predicting significant progress by 2004. One-third of the large screens in the United States will be digital by 2006, he said.
The conversion from traditional film to digital will not be painless. In 2003 and 2004 the studios will lose money while cable VOD causes a "drastic" reduction in video and DVD rentals, the study predicted. In 2001 home-video chains will generate 65 percent of movie studios' revenue, but that figure will decline to 40 percent in 2006 because one-quarter of US households will have digital cable with VOD services, Forrester said.
In the future, movie theaters transformed by digital cinema will offer new services, including in-theater advertising, new revenue opportunities in merchandising and non-movie presentations such as premium sporting events, Scheirer said.
"While digital cinema transforms theaters, cable and satellite VOD will overcome their sluggish start to transform the home-video industry and smother IP-based movie services," he said. "Although Internet-based movies and their production companies enjoy the limelight now, movie fans prefer watching films on TVs, not on PCs."
In order to succeed as a revenue-generating service, VOD must move onto the TV screen, Scheirer said. "Cable TV will win the race to bring VOD services to the mass-market home viewer, beating out the competition from DSL and digital broadcast satellite providers."
More information on Forrester is available on the Web at http://www.forrester.com.
Reported by Newsbytes.com, http://www.newsbytes.com.
Digital cinema and cable-based video on demand (VOD) - not Internet distribution - will change the way the public watches movies, the study said.
"The Internet will never be an important venue for the distribution of mainstream feature films," said Forrester analyst Eric Scheirer.
Theater chains will begin investing in the infrastructure for digital cinema in the next year or two, Scheirer said, predicting significant progress by 2004. One-third of the large screens in the United States will be digital by 2006, he said.
The conversion from traditional film to digital will not be painless. In 2003 and 2004 the studios will lose money while cable VOD causes a "drastic" reduction in video and DVD rentals, the study predicted. In 2001 home-video chains will generate 65 percent of movie studios' revenue, but that figure will decline to 40 percent in 2006 because one-quarter of US households will have digital cable with VOD services, Forrester said.
In the future, movie theaters transformed by digital cinema will offer new services, including in-theater advertising, new revenue opportunities in merchandising and non-movie presentations such as premium sporting events, Scheirer said.
"While digital cinema transforms theaters, cable and satellite VOD will overcome their sluggish start to transform the home-video industry and smother IP-based movie services," he said. "Although Internet-based movies and their production companies enjoy the limelight now, movie fans prefer watching films on TVs, not on PCs."
In order to succeed as a revenue-generating service, VOD must move onto the TV screen, Scheirer said. "Cable TV will win the race to bring VOD services to the mass-market home viewer, beating out the competition from DSL and digital broadcast satellite providers."
More information on Forrester is available on the Web at http://www.forrester.com.
Reported by Newsbytes.com, http://www.newsbytes.com.
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