What the REAL/STARZ Deal means

Michael Gartenberg | June 14, 2004, 07:32 AM

Real announced their new deal with Starz today, called the Starz ticket on Real Movies. For a flat fee of $12.95 a month you can subscribe and watch the Starz channel online as well as have download access to about a hundred different movies (which you can watch offline for as long as you wish as long as the movie is still playing on Starz. I've gotten a lot of calls about this in the last week and have spent some time using the beta version of the service. Installation was simple and each movie is about 450mb (and took on average about 30 minutes for me to download) quality was OK, not quite up to DVD standards, but certainly more than acceptable for viewing at 30,000 feet. Selections were limited, but there was enough older and newer releases for me to find stuff worth watching.

There are a few caveats. First, this is not a mainstream service just yet. Real is wisely targeting the mobile or family traveler who already carries a DVD player or uses a laptop to watch DVD movies when on the road and also has access to a fast broadband connection. At a price of $12.95, about the same as a premium cable channel or the cost of a few video rentals, you can take some good content with you on the road. Over time, though, this type of service can become very important. First, as broadband grows, combined with fast home networks, there's no reason this content can't be moved from the PC at home to larger screens in the home that might be located elsewhere. Our research shows that 51% of consumers are interested in this type of functionality. Second, there will be a new generation of mobile devices, beyond the laptop that will be able to support this type of content on the road, further driving the market. This deal is an important evolutionary step in providing consumers new venues for getting content into their home. The big issue will be interoperability. It's not likely that a Portable Media Center from Microsoft will play back REAL content. An iPod still can't play back WMA files, although there's no technical reason for that to be the case. The confusing degrees of standards, devices and lack of interoperability is a big issue and that's what's going to hold the market back.