Google Stops Selling Digital Video

Effective August 15, Google will shut down online video sales and rentals via Google Video...and all video purchased through the service will simply stop working.

Google is finally admitting what online video fans have known for about a year and a half: Google Video’s online video rental and sales offers weren’t very compelling, and barely made a dent in the marketplace. In the wake of Google acquisition of ad-support, free video sharing site YouTube and competition from Apple’s iTunes, Amazon Unbox, and other services, Google has decided to do the obvious thing: shut down video sales and rental through Google Video, effective August 15.

However, there are a couple of catches. First, Google is not offering refunds to customers. Second, video purchased through Google Video still simply stop working effective August 15. In a letter to customers sent last week, Google states: “In an effort to improve all Google services, we will no longer offer the ability to buy or rent videos for download from Google Video, ending the DTO/DTR (download-to-own/rent) program. This change will be effective August 15, 2007. [..] “After August 15, 2007, you will no longer be able to view your purchased or rented videos.”

Google Video launched commercial downloads in early 2006, offering users the chance to buy or rent video content from CBS television programs, music videos from Sony BMG, and current-season National Basketball Association games. The service experienced a very clumsy launch—with premium commercial content almost invisible—and never found a gret deal of traction with users.

Google is offering Google Video customers credit in Google Checkout, the company’s nascent online payment service: users will receive Google Checkout credit equivalent to the amount they spent on video content on Google Video. However, these credits must be used within 60 days, and only a handful of online merchants currently accept Google Checkout—an, in many cases, customers will find themselves in a situation where they have to spend more money in order to use their credit.

Industry watchers and pundits are pointing to the shutdown of Google Video’s commercial offerings as a strong argument against digital rights management technologies which lock consumers away from content they’ve purchased, and an argument for enabling consumers to legally bypass digital copy protection mechanisms in the event purchased content is rendered unusable, either through technological changes or, in this case, of a company deciding to abandon a market.