Reeltime has hit the skids. From The Age:
RECENTLY appointed ReelTime Media chief executive Andrew Wilshire has conceded the company’s lofty video-on-demand ambitions are over after handing control of its core operations to an administrator.
Jim Zavos has quit his directorship, terminated ezyDVD’s agreement with Reeltime and isn’t saying anything.
Ummm .. call me naive, but what happened to a little thing called due diligance? Or did Reeltime misrepresent their position to Jim Zavos? It’s of course easy to look back and cry ‘obvious’, but Reeltime’s strategy always looked shaky to me. John Karantzis used to trumpet the licencing rights he had secured via Hollywood as a core asset to the business. And yep, they are clearly needed - but what about the basics of movie delivery? How are people going to watch their movies? Perhaps it’s classic chicken and egg, but for my money, the delivery of a video feed to TV is crucial to a VOD strategy; it comes first. And the delivery lies firmly in the arena of consumer electronics. Your bog standard DVD player rules supreme. At $40 for a commodity player, every electronics company does one from Sanyo to Bang & Olufsen.
To break into movie downloads, you need to solve the delivery problem. But to solve it you need a convergent device with the basics of internet, wi-fi, movie selection, movie storage and of course play capability. This isn’t easy to come by! Reeltime thinking they’ll just whip one up for the tiny Australian market, pitch it at a great price and watch their business grow was never going to work. Video Ezy has the same idea for their set top box, and sorry, but that won’t work either.
To break past the view-it-on-my-computer early adopters, watch Netflix as they partner with LG. Lesson: let a bona-fide consumer electronics company handle the hardware. Apple are probably the only company that can attempt their own device, and I think the Apple TV is perfectly placed for their strategy. It’s small, relatively cheap and focused on one thing - video delivery. And then there’s Microsoft’s XBox, which whilst primarily a gaming console, tries to cover movies as well. Yet with a prodigious hardware failure rate, the Xbox is bloated, noisy and expensive when all you want to do is watch a movie.
Forget broadband, licencing, even viewing costs - I see the key issue in Video on Demand is the playback experience. Once that is solved, and robust enough to be commoditised down to an off-the-shelf player below $200, only then will VOD finally begin to deliver.
In the meantime, Reeltime tried to tread water and reserve itself a place in a future market. However, along with AU Anytime, Reeltime has now expired. All that we have left in the Australian space is Bigpond Movies Download … it will be interesting to see how long Telstra keep that afloat.