This weekend I participated, albeit briefly, in the new full-length movie streaming service EpixHD Preview Weekend. It gave me a good opportunity to see what they’re offering, what the quality of the streams are like, and how it’s being delivered.
If you’re not familiar with the recently launched Epix, the service is brought to you by movie studios Lionsgate, Paramount, and MGM. Some may describe it as the film industry equivalent to Hulu, since both are operated via joint ventures by several of their respective industry’s top content providers. While in some regards it’s very similar to Hulu, in others… it’s an entirely different animal.
First off, the major difference is that in addition to the Epix website they also have a cable TV channel. Although currently, the cable channel is only available to Verizon FIOS customers… this alone is obviously huge. However, along with creating a cable channel also comes subscription fees at $9.99 a month.
Now you may wonder why Epix, as compared to Hulu, would start a subscription based service right out of the gates (initially, I know I did). After thinking about it for a couple of minutes it hit me… and it’s quite simple. In short, the film industry is a much different business than the TV industry, and it doesn’t really have the option to offer free product (at least not current free product.) This, I completely comprehend. But, is it really worth an extra $10 a month?
While I understand the studios need to keep a premium on their content, especially the freshest content, according to Ars Technica, it’s quite clear that their initial plan, just a few months ago, was very different:
Three major movie studios are about to try an interesting experiment. They are launching a new TV network called Epix that will show their own recent films in HD, but they’re going a step beyond by bundling it with an online, on-demand service that offers HD streaming of the same films over the Internet. Think of it like Hulu for movies that aren’t yet out on DVD. Oh—and did we mention that the service will have no advertising and won’t appear on your cable bill?
A new business model
The music industry was never much good at being a digital retailer—anyone remember MusicNet and Pressplay?—but TV networks and movie studios now seem to think they have learned the lessons of the past.
Like Hulu, the Epix movie service is a joint venture formed by the content owners; in this case, the service is powered by the movie studios Lionsgate, Paramount, and MGM. The Epix TV network will air movies that are in the “pay-TV” window, those weeks before a film appears on DVD in which it is available on pay-per-view or HBO, among others.
That doesn’t sound so new, but Epix will be bundled directly into cable packages; under the current business model, it will never appear as a separate charge on the bill and will never have to be added to a package. If Epix can convince enough cable operators to sign on (it isn’t yet announcing partners), the service will have an immediate competitive advantage over pay-TV channels with an additional monthly fee.
Talk about changing business models! My experience over the weekend was this:
- There is indeed an extra charge on your cable bill - $9.99
EPIX, which includes the channel, the VOD service, and EpixHD.com is priced at $9.99 per month with no minimum term; the monthly charge will be included with your Verizon FiOS TV billing statement for your convenience.
2. EpixHD.com - is not true HD
Streaming at 720p - While the quality was really good, it wasn’t great. Not ready for HDTV hookup.
3. There were zero pre-DVD-release titles offered
The vast majority of available movies are library titles, with just one (”… Benjamin Button”) in VOD status
In all fairness, my experience was limited to their online offering since I’m not a Verizon FIOS customer (which isn’t even available in my area). But, in my opinion, it’s a big fail. Great idea, great execution (overcoming the hurdles of streaming full-length movies) but horrible business model.
What Epix should have done is build a tiered service. Offering, for example:
- Free streaming of library titles - movies that have had a first or second run on TV
- Video On Demand - offering First-run films and events a la cart, on a pay-per-view basis
- Subscription service - offering all the above for $9.99 a month
At the moment I think they’re really missing the boat. It’s a perfect time to capitalize on this type of service for motion pictures but it’s also the perfect time for this type of business model to fall right through the cracks. If they had to set a fee, I could almost guarantee that their churn rate would have reduced substantially (after this “Preview Weekend”) if they had either offered a tiered service offering (like I outlined above) and/or reduced the subscription to $4.99. Let’s face it, with only 150 movies available and the vast percentage of those being catalog titles also available on other cable channels such as HBO, how many films are you really going to watch a month through this new offering? Hulu can currently chalk up the majority of their success to three things:
- Offering a FREE service for top content
- Offering bits and bites (or bytes) of top content
- Great streaming quality
It’s true that video, albeit original webisodes, TV content, podcasts, movies and video sharing sites continue to soar. But, it’s also true that people like their online video in snack-able sizes. According to the latest Nielsen Report for September 2009, even though “Time Spent Viewing Video Online Up 25% per Viewer” the average breaks down to roughly six and a half (6.5) minutes of online video viewing per user each day. (Which is approximately how much time I spent browsing the service over the weekend.) The fact is, watching just one (1) movie online would eat up nearly the entire month of an average users current video consumption.
Here’s where they really lose me… and fail even more. Let’s say, for whatever reason, I really liked the service and wanted to subscribe just for the convenience of viewing movies on the go - with or without a Verizon FIOS subscription. Well… I’d be out of [Epix] luck. They give you no option to subscribe unless you are a Verizon customer. What’s more, and honestly pretty damn laughable, is that they didn’t even send a follow-up email “thanking me for my participation” after the 72 hour limited “Preview” enabling them to capitalize on my feedback, interest, and more importantly… presenting offers to turn me into a subscriber. Bad business model, bad user experience, and bad customer service will always outweigh the content and technology. At the moment, Epix gets an epic #fail in my book.
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Excellent article — another service I don’t need!