Which business model for watching movies online will be the winner? Paying upwards of $8 a month for unlimited and instant online access to an older catalog of films and TV shows from a company like Netflix? Or paying $2 to $3 a film for access to newer releases from a service like Amazon‘s Video on Demand?
The Catalyst Group, a New York research company that studies how people use technology, looked into this question. The company conducted extensive interviews in August with 11 people they introduced to the $99 Roku player — a device that connects to the TV and the Internet and gives owners access to both Netflix and Amazon Video on Demand.
The findings? Perhaps most interestingly, according to Nick Gould, chief executive of Catalyst, was that the participants were mostly surprised by the ability to choose from a large selection of movies and watch them instantly. “They were shocked that this is something you can do. Early adopters aside, the availability of a service like this is still not universally known,” Mr. Gould said.
People’s preference between the two services then depended largely on their film habits. Frequent movie watchers preferred Netflix and its flat monthly fee, which entitles them to the DVD-by-mail service and access to the online films and TV shows. Others preferred the Amazon service, which resembles pay-per-view, a model they were already familiar with.
And almost everyone had the same beef with both: they disliked how they had to shift from the television to the PC to manage their Netflix “watch instantly” queue and search for new films, and to activate their Amazon Video on Demand service and link it to the Roku player. They also found it difficult to search for a movie on Amazon through their televisions.
“The parties were unanimous in their wish that more of the experience be away from the computer,” Mr. Gould said. “People are expecting and really preferring a simpler, more straightforward experience that doesn’t involve the PC,” he said.
Though the findings are not exactly groundbreaking, the study got me thinking about which business model for online movies might prove to be more popular. In our home, we pay for Netflix, so we’re much more likely to stream movies from Netflix (via our TiVo) — or wait for a DVD to be delivered. That’s no knock against Amazon; it just feels like we’ve already paid for most of those films with our monthly Netflix subscription.
How about you?