XBox up on downloads
In a topsy-turvy year for the digital download biz, a videogame service in just a few million homes is ending 2006 with more momentum than the world's biggest e-tailer.
The relative success of video downloads on Microsoft's Xbox Live and disappointment of Amazon.com's Unbox point to two factors that differentiate Xbox from Amazon and its many other competitors -- consumers who download a movie want a simple way to watch it on their TV, and those with high-def TVs want high-def content.
Thanks to the Xbox 360's direct connection to a TV and the console's focus on HD content, Microsoft can deliver both. Though exact sales figures aren't available from any Web site or studio, insiders agree that it's the most, and maybe only, positive story in digital movie downloads this year.
Many in Hollywood had high expectations that Amazon's strength in DVD sales would spur the nascent Web download biz. But the Netco faces the same problems as competitors such as Movielink, CinemaNow, Guba and AOL that launched before it: It's difficult for consumers to burn downloads onto DVD (save for a few titles on CinemaNow), and it's tricky for all but the most tech-savvy to watch downloads on a TV.
The biggest surprise of the year has been Microsoft offering movie rentals and TV downloads to the Xbox 360 via its Xbox Live Internet service.
Though there are fewer than 3.5 million 360s in the U.S. by last count, movies available from Warner and Paramount, as well as content from CBS and MTV on the TV side, are doing at least as well and, in some cases, better than on competing Web sites, which are available to anyone with a PC and high-speed Internet connection.
Xbox 360 owners are a tech-savvy and media-hungry bunch, of course, but the relatively strong start for video downloads on the console show that there is a market when watching a download is as easy as pushing a few buttons.
HD has proved particularly popular with Xbox 360 owners, many of whom already use the console to play vidgames in high-def.
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