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AOL service looks rushed, unready, and will underachieve

B+ for effort

The smart choice: opportunity from uncertainty

Comment To say that AOL has rushed out its new film download service is an understatement. The terms of services just simply haven't been written yet (blank on the website) and it doesn't make clear that the films can only be downloaded in the US, but that's the case, and there has been little thought on pricing.

But it is clear that it has cut new deals with 20th Century Fox, Sony, Universal Pictures, and Warner Brothers for a substantial list of their full length movies. That just leaves Paramount and Disney currently not joining in for the new download service.

The downloads will cost between $9.99 and $19.99, presumably it's $9.99 for classics and $19.99 for those in their DVD window. Customers can keep the film, but cannot burn it to a DVD, which means that AOL is breaking what we at Faultline consider a golden rule – downloads MUST be cheaper than DVDs because they cost the studio less.

AOL uses Windows media and DRM formats and allows customers to transfer the films to up to five PCs or portable devices, again as long as they are Windows based, so no phones, no iPods, no PSPs, which means no use.

Although users will own the titles, the movies can only be played on a limited number of Windows-based PCs or portable devices with limits varying, between four devices for movies and 10 for television shows.

So while we acknowledge that this is a fine effort, and that the company should get a B+ for effort, it's not going to suddenly drag people away from Netflix and Blockbuster, because it's just too darn hard and expensive. At best it will attract a few AOL lovers to a new source of movies.

The deal also includes popular TV content from the same studios, including Fox's 24 and Prison Break, Buffy the Vampire Slayer and Hill Street Blues and these will be on sale for $1.99, the same pricing as iTunes.

Sony will be offering two channels of free to air, advertising supported, channels based around slightly retro classics such as Charlie's Angels and Starsky & Hutch, but these can also be bought for $1.99 without the adverts.

Copyright © 2006, Faultline

Faultline is published by Rethink Research, a London-based publishing and consulting firm. This weekly newsletter is an assessment of the impact of the week's events in the world of digital media. Faultline is where media meets technology. Subscription details here.

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