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Amazon Unbox Offers Hollywood On-Demand

With the recent availability of movie downloads on Apple’s iTunes and the Amazon Unbox movie download service, video downloads have become more front and center in the minds of consumers as they consider how to spend their entertainment dollars. Though the iTunes Store would seem to be the immediate dominant leader in this space given their iPod market share and early lead with television video downloads, Amazon is betting they will have a thing or two to say about that with their Unbox offering.

Amazon director of digital media Roy Price recently took some time to conduct an interview with Digital Trends about the Amazon Unbox  video download service:

DT: Please tell us a little about your professional background and how long you’ve been with Amazon.com.

Price: Just out of college I worked as a financial analyst at New York investment bank Allen & Co. After law school, I worked at Walt Disney Television, developed a number of fun and successful cartoons (go Kim Possible!) and became a Vice President overseeing development and current production. I left Disney in 2000 to join McKinsey & Co., consulting for media companies on various new issues that were then (and still are) changing the industry. All this time, I had been a hugely enthusiastic Amazon.com user (with my own Amazon.com credit card!) so I was delighted when in 2004 Bill Carr asked me to come to Amazon.com as employee #1 in their digital video initiative. I have been with Amazon in Seattle for two years.
Roy Price
DT: Can you tell us a little bit about the history of Unbox’s development and how Amazon sees it fitting into the company’s corporate strategy?

Price: Amazon is great at making technology easy and fun, and using it to help people find and discover things. Amazon also has a substantial customer base who loves film and TV. As soon as it became possible to download TV shows commercial free at DVD quality the day after they appeared on TV, including TV shows from around the world, and also to download movies without leaving your house, we wanted to be there.

DT: Talk about Amazon Unbox in regards to digital rights management. What rights does a consumer have to the media they download and why are they required to use Amazon’s software to view it on a computer?

Price: Actually they’re not required to watch the videos through our application. I don’t know how that rumor got started but it’s sort of an urban myth of our service. Try it yourself. If you double click the wmv files in your Amazon folder (in My Videos), they will launch in your Windows Media Player and work perfectly. The digital rights management we use, Windows Media, is pretty standard and is used by pretty much everyone except Apple who have their own very similar technology. You can download an Unbox title to multiple PCs and it’s yours to keep (unless you rented it of course in which case it will expire at some point). You can even delete files from your PC and re-download them later from Amazon’s Media Library. How convenient is that?

DT: Initial reception to the Unbox service has been lukewarm. What is Amazon doing to address issues raised by reviewers and consumers?

Price: There were a few things going on at launch. For one, there was a lot of anticipation for the service and a lot of rumors that we had a burn to DVD solution and we were releasing movies the day they hit theaters — or before! We didn’t quite live up to that but I hope everyone is finding that we have a good service all the same. Secondly, we were (and are) not able to serve Mac OSX customers unless they install Windows through Bootcamp (http://www.apple.com/macosx/bootcamp/), which I hope lots of people will do. In order to sell files into any operating system environment, we have to use a digital rights management technology. The only such technology that works on Mac has never been licensed to anyone. So, Bootcamp it is. Mac users should know that we would love to serve them and we will eventually find a way. As to the Unbox application itself, there were a few early issues. We have launched two new releases of the application since launch encompassing 90 minor versions and we have ironed out the bugs and listened to people’s preferences. Our customer contact rate is normal and I think people are having a great experience. I encourage everyone to try it.

DT: Who does Amazon consider as competition to their Unbox product?

Price: I have to be honest. We really focus tightly on our product and the customer. If you get that right you will succeed. If you spend too much time thinking about what competitors are going to do next you will never be a leader.

I will promise you one thing: every day, month and year we will continue to offer a better and better customer experience with more and more content at great prices. Today we offer files that are unparalleled in terms of video quality — true DVD quality. That matters and it’s going to matter more and more. It’s getting easier to get to the TV. I already watch my Unbox videos on my HD bigscreen through my Xbox 360 and it’s great. This is just the beginning.

Amazon Unboxed Video Player
The Amazon Unbox Video Player

DT: When you look at the state of video on the Internet today, do you feel consumers in general are ready for a product like Amazon Unbox? Why?

Price: Many people aren’t yet familiar with video downloads. But when you see the majority of people online have broadband connections and home networks are growing at a rapid pace, you know that the basic infrastructure is coming together. Many people don’t know how convenient it is to download that great show they heard about at work or that on Amazon they can order the show from anywhere and have it show up on their PC at home in DVD quality, or that there are a number of ways to get it to the TV. But it’s just a matter of time. Unbox had a huge weekend after Thanksgiving. I think more than a few people heard about video downloading over turkey and cranberry sauce. I am petitioning for a few more national holidays so we can accelerate that word of mouth.

DT: What can you tell me about current Amazon Unbox statistics such as total downloads, which video have been most popular and total revenue generated since the product’s launch?

Price: Not much. We just got started, we haven’t really started our marketing and we’re not really focused on absolute numbers right now. We’re focused on making sure our customers are getting what they want and responding to what they tell us they want. That said, our customer retention rates — the rate at which customers return to the store — are very, very high so we take that as a very good sign for the long term.

DT: What in your opinion is a more popular model for online videos? Rentals or purchases? Why?

Price: I think the great thing is that Unbox has both. Seriously. There is some stuff you want to rent, and some stuff you want to buy. Isn’t that just true? Why would anyone think that would not be true anymore? There hasn’t really been a model for renting music ever, but there has been a very successful model for renting video and that’s not likely to change.

DT: What future plans does Amazon have for the Unbox service? Are their any new features, content offerings or partnerships you can elaborate on?

Price: Yes, yes and yes! We have many future plans, including exciting new features, new content offerings and new partnerships. But I can’t really elaborate beyond that except to say that we always strive for innovation, for comprehensive selection and we are open to an open ecosystem and so are a lot of other innovative and resourceful companies. It’s going to be an exciting few years.

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