Just reading Andrew Cooper is extending dStore offline with a retail 2.0 move. From Smart Company:

Cooper is scouting stores that are around 800 square metres; the front half of the store will contain merchandise while the back half will be a small warehouse. Customers will be able to order in-store web kiosks and either pick up their goods on the spot (if in range) or have them delivered the next day.

Feels like a contradiction doesn’t it .. going offline to extend reach? As an online business, if you can’t extend globally - with conventional wisdom being this is the one true path - where do you go otherwise? Where are those customers that you’re not connecting with today? Ans: they’re in every suburb of every city of our wee little country. Local retail gets you in front of people you just can’t reach with a purely online play. Scoop up 5% of 200 million Americans .. And your online business will fly .. but 5% of 20 million Australians is a completely different set of numbers.

Way to go dStore .. way to go Andrew Cooper. Let’s see local retail taken to the next level.

It’s now 7.20am, Adelaide Airport, and I’ve just finished my cibo breakfast. I arrived about 7 mins outside the 45min checkin window Tiger stipulate. Ok .. I’m cabin baggage only .. with kiosk check in I’ll be able to head straight to the gate for a full 30 mins before take off. Hmmm .. No kiosks. Manual checkin overflows with people backed up prob 40 deep. 2 staff wipe sweat off their brow trying to get everyone through. No staff working the queue, streamlining the process. Ok, think i’ll head straight to boarding and checkin there. Wrong move, turned around, back to queue, time dissapears and missed flight!

Dang. Tiger lesson learned. Be on time or else! Jump on adioso.com (via iPhone) next avail flight out is virgin, booked online, confirmation sent, checked in via kiosk, boarding pass issued in seconds, no queues and voilà… Here I am drinking coffee waiting for my flight.

As chief anything-tech-I-gotta-handle, I’m generally the one who keeps the content flowing into the system (big props to Andrew who tackles TV and kids discs .. sick of Barbie yet Andy?). We add about 60 titles a month, from new release to back catalogue and that’s a lot of info and images. We’re no Quickflix with a dedicated content team .. we run on the smell of an oily rag.

But c’mon film makers and distributors! Sometimes finding poster art to promote your film is like digging for gold. You spend plenty of dosh to make your film, but forget that couple of grand to create some great poster art and put it on your website. C’MON! give a brother a break. I dig and dig and dig to try and find something hi-res. We’ve got the best cover art in the business (prove me wrong) but that’s a killer to pull together. I’m trying to get Storage (www.storagethemovie.com) in the system at the ‘mo. Just a little Aussie indie thriller which we’ve bought one copy of .. but can I find some dang poster art? Nup. It won’t be the first time I’ve screen capped a website and put some cover art together myself. And whilst I could wait for the actual DVD and scan it (ala Quickflix, Bigpondmovies and just about everyone else), poster art is typically a quality grade above what ends up on the DVD cover - so that’s what I want.

Yikes! I can’t believe it’s been 3 months since I posted here. Sorry everyone! Life is busy here at APPLEBOX and we’re still humming along nicely. Don’t forget we have our facebook page that Andrew keeps turning over and twitter 140 character movie reviews (put your sunnies on ’cause the green might blind you). James is chiming in as well.

But back to Think Global, Shop Local - Nice slogan! Been around for years I’m sure, but I noticed it down in Port Melbourne the other day (near our friends at glued.com.au) .. and I like it! sorta sums us up nicely.

A brilliant quote from Mike Walsh:

The context? He’s talking about the future of finance. A far cry from local DVD rentals, but I think his observation translates perfectly.

Warner Brothers is experimenting with online distribution with their current release of The Curious Case of Benjamin Button. This is a simultaneous DVD and VOD release which eliminates the normal release windows of DVD first (after cinema), then payTV and VOD last.

The exciting thing about this, is that whilst iTunes and BigpondMovies Download will automatically be included, Warner have decided to include DVD rental groups in the mix … and that means US! Yes, we’ve directly integrated the download choice for Ben Button into our catalogue:

From what I can see, we’re the first local video store to EVER seamlessly offer a download option to their membership (and that’s world wide). The keyword here is seamless .. i.e. at the point they would normally choose to select a movie to watch. Video Ezy can’t do this (and that’s can’t, not don’t), as their members aren’t online when they pick a DVD off a Video Ezy shelf. Even when our members are in-store, they’re online. About half our members do all their choosing from home (and drop in for a quick pickup), so about half our members now have a new choice - at the point they would actually choose - to download to their PC or laptop.

In Australia, the only other local outlets that offer online selection are InstantDVD, RedroomDVD and Glued. None of these guys are doing the Ben Button download. Whilst they all could put a banner ad on their sites, integrating into their vending catalogue is probably too difficult for the moment.

Who else is offering it then? The existing VOD players - iTunes, BigpondMovies Downloads, Foxtel, and then the DVD outlets - Leading Edge Video (who we buy through), Network Video, Quickflix and EzyDVD. Notable in their absence is Civic Video, Blockbuster & Video Ezy .. and that’s about half the local rental market. Interestingly, EzyDVD is owned by the FEG (Franchise Entertainment Group) who also own Video Ezy and Blockbuster, which means FEG have deliberately chosen not to test it with VE and BB. Hmmmm … is this an indication of their online strategy? To all the Video Ezy and Blockbuster Franchisees out there .. are FEG doing all they can for your digital future?

Execution is everything, and this is the achilles heel of the VOD industry to-date. Downloads are painful! For those interested, the process is:

1. Launch the APPLEBOX catalogue (go to applebox.com.au, hit ‘Browse DVDs’).
2. Go to the Benjamin Button movie page (click the Ben Button banner, or search for Benjamin Button, or click the Ben Button cover in the New Releases section).
3. Click the Digital Download option, rather than the DVD or Blu-ray option
4. Pass the system requirements check (Windows XP or Vista, IE 6+ and Windows Media Player 11).
5. Provide an email address, date of birth, accept the terms and conditions, hand over credit card details, accept download of the Ben Button download manager.
6. Find downloaded download manager. Double click and start downloading the 2 gig file. For me this took 70 minutes with an average 570KB/sec download speed (not too bad). Even with a network hiccup, the download manger resumed the download and kept running.
7. Remember where the download manager was downloading the file to .. find and double click.

With a 70 minute download I could have walked the 4km to APPLEBOX and back from my place .. but that aside it worked! I successfully downloaded Ben Button directly out of the APPLEBOX online storefront. I then watched 10 minutes of it on my PC monitor. I finished off by watching via Blu-ray on my 42inch plasma, as even in the name of future-VOD, until I can get 1080p to my TV it’s just an experiment for me.

Some points of view for Warner to think about:

1. Windows DRM is not the answer.
   Stats saying Windows holds 90% market share (lets give the other 10% to Macs) might give comfort that windows DRM is a fair choice for playback control. Don’t believe it! That 90% is heavily skewed by corporate installations. Mac home use is much, much higher. By our stats, around 30% of our movie choices come from Macs .. you’re annoying those users, and pushing them to iTunes. There’s no-doubt a lot of background to this choice, but do you really want to support iTunes dominance in digital distribution?
2. Please improve your platform check.
   Give Mac users a big “We’re sorry but as a Mac user you can’t download Benjamin Button at this website. Please try iTunes so you can watch our wonderful movie”. In Firefox on the Mac I get “To Begin, just click the NEXT button below”, and there’s no next button.
3. I do not want to give you my birth date.
   Ben Button is rated M, if you want to confirm I am over 15, give me a check box to tick.
4. Test your service via your affiliates. Regularly!
   Downloads came online Wednesday. Great, we integrated the URL, tested and went live on Thursday. All works. By Saturday morning the same link was now giving a ‘Directory Listing Denied’ page. Hmmm. Banner ads from Quickflix, Network, EzyDVD and LEV are all hitting the same page. Looks like someone has changed your webserver config settings and removed the default page setup so what previously worked with a “/” end reference, now needs a “/Default.aspx” reference. 3 days later, it still isn’t fixed, and Quickflix, Network, EzyDVD and LEV redirects still fail.

Despite the niggles, I say well done to Warner. I applaud their strategy, which I believe is to acknowledge where the rental public is today and for the immediate future .. and that’s at the local store level. If you can reach out to these renters, via all the groups that service them today, potentially you’ll engage a bigger market than dealing with iTunes, Foxtel and Telstra alone. Whilst you could argue that local rental groups don’t really engage their members in the online space (sans APPLEBOX), 4+ million customers with established rental behaviours is hard to ignore.

DRM, Windows reliance, download managers, bandwidth costs, catalogue selection, Hi-def formats, TV playback & matching the value prop of local rental (eg any 3 for $10) .. all these are part of the challenges for VOD. There’s a lot of good stuff happening in the states with streaming services like hulu and platforms like boxee. It’s an interesting space, but good ‘ol local service is still a draw card. We want to be across it all, and local is where we’ve started.

Civic Video have updated their website, and with it comes new functionality. It’s called ‘My List’. Their explanation:

Yay! Gotta love the rapid evolution of these big chains. Lets see, they want me to log in, compile a list of movies from their online catalogue, print it out (or email it to who?), carry the list with me and then go to my store. And when I see the local now has Barbarella (but it’s out) I go back home, log on, search and find Barbarella isn’t in their system so I can’t add it to my list to remind me for when I rinse, repeat and start again.

Now *if* they could print the list out for me when I went in, or had a terminal in-store so I could check my list .. now we’re cookin! Next step, junk the shelves, get their inventory online and make the whole process seamless.

Just came across a mention of this little baby which is a HD media player. For $130 it will play HD 1080p content to your TV (via HDMI) from a hard drive source ($120 for 320gig). So, for $250 today, I can have a full 1080p HD portable playback kit.

Thats brilliant. I won’t call this a torrent player .. piracy hurts my business and I know plenty of people working in the industry that also feel the hit. I’m not talking Clint Eastwood .. it’s average joe who doesn’t make the mega bucks but piracy devalues what they do.

But .. I’d love to visit my local video store, fill my drive with pre-paid 1080p content and watch when I’m ready. Packed with DRM to limit that watch to a couple of times and prevent me from copying it out? Fine by me. The convenience would be great.

Transporter 3 is due for release this time next month. At CDWOW you can get it for a snap at $41.95, EzyDVD does it for $32.97 and JB for $29.98. Thats a $12 variance from CDWOW to JB! If CDWOW can get away with it .. that’s a huge margin they’ll make. We’re online with price comparisons at our fingertips .. I gotta wonder how many they will sell. On that price check I wouldn’t go back to CDWOW next time. Add to the craziness, within 3 months after it’s release Transporter 3 will most likely drop to $15.

Phil Sim over at Squash has written a post “Will Video kill the Internet?”. His story is one of going from a 3Gig cap to a 25gig and now to a 60gig cap. His assessment is that “for once, bandwidth advances have not kept pace with content production.”

Yes! This is close to the debate about VOD killing the video store which is one I have regularly. Here are some quick calculations on the bandwidth needed to meet your typical rental demand on a Saturday night.

That’s a lot of capacity! Lets not forget Australia is little .. blow that calculation out on a global scale, add in the capacity demands of Blu-ray style high-def and yep, Video will kill the Internet. Luckily, we’re not going to hit that demand now, the local video store will be with us for a long time to come, and in the meantime, infrastructure upgrades will ensure the threat of internet gridlock will be averted.

(nb. the youtube calc of 25 Petabytes bandwidth per month is now 2 years old .. it’s no doubt higher now)