With Apple and Amazon about to throw their hat in the ring, existing players are looking to fight back with price cuts and content promos that will suck the profits out of the legal video download business.
The first salvo in what will be a brutal price war is being fired by San Francisco-based Guba, which is going to announce that users will be able to download the movies for $9.99 on the very day the movie, is released on DVD. In addition, they are going to sell catalog movie titles for $4.99 and television shows for 49 cents an episode. Movies can be rented for 99 cents.
These prices are going to put pressure on existing download services, Cinema Now and Movie Link, which despite a big head start have been puttering along. The competition is only increasing. Amazon and Apple are next up, joining the ranks of existing players. Microsoft has its own plans, both as an infrastructure provider and also as a competitor with its Zune line of devices. (Also, Playing into Apple’s hands.)
The mad dash to the video market is predictable. In-Stat, a market research company predicts that the global market for “online content services is expected to expand by a factor of 10, growing from about 13 million households during 2005 to more than 131 million households by 2010.”
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