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onShore Tries to Fluster Blockbuster With 'DVD on Demand'
6/17/2002 - by Adam Fendelmand, ePrairie - Editor-in-Cheif
You may recall enjoying the reasonably priced convenience of now-defunct Kozmo.com, whose bicyclers would peddle a DVD to your door in about 30 minutes during more hours per day than most video stores.
But while Blockbuster Video is proclaiming that "renting is better than buying" and asking if you'll "really watch that DVD more than once," one local Web boutique is questioning why you'd even leave your Chicago high-rise for a movie, and why you should be constrained to a certain time of the day or a limited selection.
Like any other emerging trend, "DVD on demand" is a new and unproven notion. Chicago-based onShore hasn't yet fleshed out many of the particulars—such as how much high-rise dwellers will pay for the service and how to convince more first-run studios to latch on board—but the company is confident in its technology.
"The big gorillas are holding their breath, waiting to deploy bandwidth from the head-end," said onShore CEO Stelios Valavanis, "while here's little 'ole onShore, making it so convenient and inexpensive that there will be no point even for pirates to try to circumvent the fees."
While the code to crack a DVD's algorithm has become publicly available, he says piracy isn't about being frugal: "People aren't pirating to save a few bucks. People pirate for giggles." With onShore's new DVD-quality and on-demand digital video service, Valavanis asks: "Why wait to download it off the Net (with damaged quality) when you can play it now for a couple dollars?"
While he says installing a rather inexpensive and unobtrusive server with a terabyte hard drive isn't an economic barrier to entry, bandwidth has been for many companies. Valavanis says onShore's technology, though, can pump up to 100 Mbps of dedicated bandwidth to each unit (the company's high-speed Internet offering, onShore hotWire, allocates about 3 Mbps per unit).
He says a typical movie is between 1 and 3 gigabytes in size and needs approximately 3.6 Mbps of bandwidth to stream in DVD quality. A terabyte is 1,000 gigabytes.
The company's largest expense will be paying the studios a fee per movie viewed. Each unit will need its own set-top box (a rental fee for which you may have to pay), and the front-end menu system and usage tracking is being provided through a partnership with Roomster. The in-building server would communicate to each individual unit through a standard Ethernet connection.
While the infrastructure may not be underdeveloped, Valavanis says the willingness of the bigger studios is. Only currently armed with one first-run studio agreement, New Line Cinema, the service doesn't currently afford the ability to rewind or fast-forward due to the studios' "greed" and disagreements over whether to charge for extra viewing time. Pausing a movie is available.
While the intent is to approach higher-end high rises and install necessary equipment free of charge to building owners, onShore hopes to profit from the unit dwellers themselves through an "all-you-can-eat" flat monthly fee or a pay-per-DVD structure.
Valavanis says his audience's monthly budget for movie rentals is about $50, indicating that he wouldn't be happy with only charging $20 or $30, but that he would offer two free months of service in the beginning.
Though Valavanis says he's unaware of any other company offering such a service in multiple-dwelling units (MDUs), LodgeNet is using an analog system, but currently only in hotels where customers pay per movie viewed.
Valavanis hopes the service will replace the need for a Blockbuster Video, but ultimately, the need for cable altogether. In addition to current pilots, he intends to offer the service publicly in mid to late July.
http://www.eprairie.com/news/viewnews.asp?newsletterID=3867