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Company founder Chris Armstrong explains: Four years ago, he set out to his local DVD store to rent a movie. First, he stopped at the ATM to get cash. The store didn't have Twelve Angry Men, the movie Armstrong wanted. He settled for Carlito's Way instead. He then waited in line, paid for his rental, and returned to his car.
Then he remembered another movie, Gone in Sixty Seconds, the title of which got him wondering why the process of renting movies, from start to finish, can take so long.
While other companies see the Internet as the answer to that question, Armstrong has another idea. PortoMedia is setting up kiosks that will let consumers download movies to a flash memory key or portable hard drive.
The kiosks will be packed with hard drives that can hold 350 to 5,000 titles. Users then plug in a memory device from the company, enter a PIN code, and buy or rent a movie. When consumers get home, they simply slide the memory device into a dock connected to a TV.
The key to the service is a proprietary USB interface that transfers data at a faster average rate than standard USB devices. A standard-definition movie can be loaded onto a memory device in 8 to 60 seconds, depending on the length and chip speed. High-definition movies, which won't be available initially on the service, can be downloaded in 18 to 45 seconds. The USB interface works just fine with the USB slots on PCs and notebooks.
company's discount dock. This hardware
will sell for around $50 in the U.S.
The company did a trial run in Dublin at the end of 2007, with plans to go live in four U.S. cities toward the beginning of the second quarter, though Armstrong declined to name the cities. Two retailers have signed on to put the company's MoviePoint kiosks in their stores.
More importantly, major studios have agreed to let the company rent standard-definition movies out of the kiosks, he said. Getting permission to build a library of high-quality content has been the bane of several would-be Blockbuster killers. Armstrong wouldn't divulge the name of the studios, but said they were major and well-known.
"We will have them (movies) the same day and date as DVD," he said. The pricing will be about the same.
Advantages over current models
If the company can pull it off--and that remains a big if--PortoMedia potentially can short-circuit some of the problems and shortcomings of the various methods for delivering movies. First up is cost. Delivering movies via hard drives and flash memory eliminates many of the packaging and shipping expenses associated with DVDs. Shelf space at retailers now dedicated to discs is also freed up for other products.
In addition, selection is improved. Most video outlets don't have 5,000 titles, he noted. Kiosks further let more companies into the video rental market. The kiosk version holding 350 titles will sell for around $2,000; it could be placed near the counter at convenience stores. Retailers will also be allowed to put their own brands on the box, so it could be hawked, for example, as "7-Eleven MoviePoint."
The time for viewing the rental won't kick in, he further added, until the movie is actually started, which lets the company copy the Netflix "no late fees" model but without monthly subscription fees.
Even more important, the system erodes the desirability of downloading movies. While great in theory, movie downloads have yet to become a big hit. Consumers have complained about long download times with some services, while others only let you watch a movie on a PC. PortoMedia rentals can be for one, or multiple viewings, depending on the fee and service selected. Because the company can control access to the box and makes the devices for downloading movies, viruses become less of a worry.
A physicist by training, Armstrong claims the Internet can't handle movie downloads anyway. He did the math on last year's release of Shrek 3. In the first three days, 11 million copies got sold. That's 66 petabytes of data.
Movies from PortoMedia can be watched on TVs or PCs. To prove his point, he transferred Spiderman from a portable hard drive to an iPod Touch. It took six seconds.
"And I didn't need permission from Apple to do that," he said.
But what about piracy? "It will never be perfect, but we are going to make it as hard as we can," he said. Movies rented from the service will comply with Microsoft DRM standards.
If anything, the company has lined up legitimate technology partners. IBM helped it developed the transaction system. The drives come from Seagate Technologies (which has said for about a year that we will see video rental kiosks with hard drives), while Samsung provides the flash memory. Toshiba is fabricating the chips that make up the high-speed interface. Investors include former film execs like Jay Emmett and Lindsay Gardner.
PortoMedia's interface emphasizes sustained, rather than peak downloads. USB 2.0 can provide peak bandwidth at 480 megabits per second. "But I've never seen anyone achieve that and I'm in the industry," Armstrong said. Average speeds are far lower.
The company claims it can hit a sustained bandwidth of 95 megabits per second or higher. Some venture capitalists advised him to turn the company into an interface chipmaker that would license technology to other semiconductor manufacturers, but Armstrong decided to stick with movies.
The hardware will be sold in bundles with movies. The starter pack, which will sell for around $60, comes with a flash key, a dock, and six movies. At the high end, users can spend around $160 and get a handheld with a 1.8-inch hybrid hard drive with 240GB of storage, a fancier dock, and 12 movies.
See more CNET content tagged:
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Why not simply either purchase the DVD, or rent it the way it's traditionally been done? I'd be much more likely to download, rent or buy it than I would to buy into some other proprietary system.
66 petabytes over what period of time and what delivery method. Using multicast-type delivery the average provider would only use the bandwidth once for as many folks as are requesting the data. Add a bit-torrent structure to it, so it can round robin the data as requested, no big delivery issue.
Remember, each of those 11 million people will have a maximum delivery speed to their home of 1.5 to 10meg on average. Add onto that fact that not everyone would be requesting it at the same time, and you get to statistical multiplexing. Amazing how oversubscription works! Add in other possible delivery methods - see how Akamai works for an example - and the needed upstream bandwidth for a provider shrinks even further.
I love how figures don't lie, but liers can figure. And this marketing guy figured out how to wow folks with numbers. The real trick is time to download. If the average person can download at 8meg per second, they can download an average "high definition" DLC movie in about 20-30 minutes. I don't see the convenience of going to the 7-11 to buy a rental when you can have it in your house while making/eating dinner. Didn't they try this same delivery method with the DVD's that decay in atmosphere and DivX (not the cool MPEG4 thing, but the crazy movie rental thing) in the past?
Second, I see a niche market for this because what I don't see a lot of in these talks of everything going to a download format (i.e. streamed movies, movie purchases, streaming radio, etc.) is that not all IPS's provide unlimited bandwidth. My ISP has a Fair Usage Policy that says if I go over 50GB in a month I need to switch from residential rate of $39.95/mo to Commercial rate of $150.00\mo. So even with compression to degrade the download quality of the movies, how many can I rent a month and still have my regular traffic and Vonage before I max out and start paying 5X the monthly rate for service? I need Netflix or something like this because I can easily watch 1 movie a day, more on the weekends.
Sounds convenient--but unfortunately, impossible (legally).
so i get this crude charge up of my life and DNA and then i feed from the earth Readying for Social experiences every StarBurst.
Earth is just assisting me
what was that old chinese saying
Of course everyone likes being free that bit more so they're all half encouraging me.
don't have to go anywhere.
The pros outweigh the cons, methinks.
'those who know sell to those who don't...'
1) M$ (Malware Society's) DRM - do Ineed to say anything more!
2) Proprietary USB interface??? I don't think so.
3) Introduction of nasty stuff into mu computer.
4) To me, this is a fine example of 'vaporware': Now, you see, now you don't.
5) Price point is all wrong for me.
Just my worth(less) 2 cents worht.
2) This is not meant to go into your computer, it's meant to go into a dock that's connected to your TV
3) MS DRM could mean that if you do connect it to your computer no new software will be needed to watch the movie. Unless of course you have a Mac or Linux computer.
Like DRM is any different for any format, ITunes uses it, MS's Zune uses it, HD/SD DVD uses it, and the almighty Joke from the inventors of DRM, Sony, Blu-ray uses it.
2) Proprietary USB interface??? I don't think so.
USB isn't that proprietary, there are more proprietary interfaces out there than USB, everything has some proprietary components, but the thing with USB is its supported by just about everyone in computing and electronics now, USB Flash/Hard Disc is the next logical step for storage over single use optical disc technology.
3) Introduction of nasty stuff into mu computer.
Well if you buy your stuff from reputable dealers you don't have to worry about it, and if you do get something on your computer you have someone to go after, but then, as previously pointed out, this is being developed for TV play back not PC.
4) To me, this is a fine example of 'vaporware': Now, you see, now you don't.
USB has been around for a long time when it comes to computer technology, people said the same thing about CD and DVD but they are still both around today.
5) Price point is all wrong for me. Just my worth(less) 2 cents worht.
Price point, and $25 bucks for a DVD is fine? The deal with this is once the infrastructure is in place it will be cheaper than DVD to provide because you don't have to higher some 3rd party to print the movie for you, it goes strait from the Home Entertainment Division of the studio to the distributors, also the chances of having things like disc rot and scratching during manufacturing, which cost the company money, is completely eliminated.
1. Short-Run: Only early adopters would sign up. Those early adopters are a. already streaming movies on the internet via set top boxes or b. ripping and burning media. No non-early adopter is going to sign up for this service.
2. Long-Run: In the long-run, rental movies will be streamed to the user via set-top boxes through 3rd parties or tv service providers (ex: comcast on demand).
In sum, early adopters have a better solution already and the masses will skip right over this service and direct to on demand rentals in a few years.
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by SimonJLeonJr
August 7, 2008 8:58 PM PDT
- At first this sounds okay! but after thinking about it and reading the other comments you realize that this may go for awhile and I can see TV makers adjusting and putting in ports for this type of technology. But I think that the initial cost will make it prohibitive. I won't be spending that amount of money to try it. No if you could bring in your own Flash drive to down load the movies onto for a reasonable price it might make it. And it would be more cost effective than shipping DVD's around the world. Wow, whats next?
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