DVD Christmas deals boom as movie downloads loom

Online DVD offers are booming in the lead-up to Christmas, as Telstra turns up the heat by planning movie downloads for next year.

There are several vendors in the DVD online rental space, including Homescreen, Quickflix, V2 Direct, and BigPond Movies. All are offering pre-Christmas specials to attract customers to their sites.

QuickFlix is offering Christmas vouchers starting from $29.95. Each voucher entitles you to hire any two DVDs at a time for one month. A $49.95 voucher does the same for two months. A $99.95 voucher gives you any three DVDs at a time for three months and a $199.95 voucher lets you choose three DVDs at a time for six months. There is also a free trial for new subscriptions which provides the first three DVDs free.

Homescreen is offering any two months worth of DVD rentals for $49.95 -- a month's subscription would normally cost $36.95. There is also 12-month voucher for $349.95. Both vouchers are for three DVDs at a time. Homescreen also offers a free trial for the first two weeks.

V2 Direct has a "join now and get your second month free" offer, while Big Pond is offering 50 free movies with a new Telstra ADSL account.

QuickFlix's CEO Stephen Langsford said he had seen an exceptionally high-growth year for online DVD rentals, to the point that he would now call it a mature business.

"However, I am still amazed at how many people out there have not heard of the online DVD rental model, so this Christmas offer is an attempt to attract those people that are still unaware of the service," he said.

QuickFlix was founded in October 2002 and the service was launched at the end of 2003 with partners Fairfax and Optus.

Alan Jones, one of the founders of Homescreen, said he had also witnessed a massive growth in the last six months. Homescreen partners with Hoyts, ninemsn and Qantas.

All online DVD services currently work around a model in which customers subscribe for a certain amount of DVDs that can be ordered on any one day. This is usually two, three or four DVDs at a time and requires payment of a monthly fee depending on the selection.

Once you sign to a plan, you simply go online to select the movies you want and they are sent to you via post, usually with a return envelope. As soon as you return the DVDs you can order more. There are no late fees.

This model is set to change next year with Australia Post missing out, as customers will directly download their movies.

BigPond's Managing director Justin Milne said that from next year the BigPond movie site would offer a variety of movies, TV shows and documentaries for direct download.

"The content will build over time along with demand," he said.

BigPond has already been experimenting with live video streaming. For several years it has been offering the Bathurst Super 8 Series in an exclusive deal with Ten Capital. It now also streams AFL, NRL and the Melbourne Cup exclusively online.

Last week the telco made a leap into the entertainment space by bundling ADSL accounts with free offerings from its four-pronged Internet entertainment site, which offers movies, music, games and sport. (See story http://www.pcworld.idg.com.au/index.php?id=1515325727)

"This is a big move for us as it is the first time we have bundled a media and broadband proposition," Milne said.

He added that having the DVD online rental business had been a good way to attract customers to the Web site and also gauge what people were watching.

Milne said that since Telstra dropped its broadband pricing to under $30, Australia was now at the start of a broadband boom, and content would become an important part of a service provider's offering.

"We are heading to a world where most people will have broadband access," he said. "They will want to download media, sports, and games to their PC and then distribute it about their house, probably via wireless connections to various screens for their enjoyment."

Jones disagrees, believing that the price needs to drop further for broadband movies to become a reality.

"Broadband needs to be priced much, much more cheaply," Jones said. "Most broadband customers are on 200-500MB plans at $30-$40. At this price a DVD is still several months' worth of broadband access!"

Jones said that while Homescreen was positioning itself to offer movie downloads in the future, its focus at the moment was on providing a good DVD service.

Langsford said QuickFlix was working towards offering a movie download service in addition to online DVD rentals.

"I think the introduction of Microsoft's Media Centre will help drive Video On Demand take-up," he said.

"But for Video On Demand (or downloadable movies) to be available widely in Australia, it needs to be offered over DSL, so it is just a case of sorting out price points and content rights."

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