Tech News

Will Microsoft movie downloads harm DVD rentals?

By Stevie Smith Jul 12, 2007, 17:23 GMT

Concerns surrounding the future of DVD are arising this week following Microsoft’s E3 Business & Media Summit confirmation that its 120GB Xbox 360 Elite videogames console will be hitting European shores on August 24.

The Elite’s 120GB hard drive represents a massive storage jump from the 20GB Premium Xbox 360 currently available throughout Europe, and is to be the precursor to the arrival of Microsoft’s popular Video Marketplace download service.

Both the 120GB Elite and Video Marketplace are already available to Xbox 360 owners in the US, and Microsoft has now said it is immersed in talks regarding the integration of the download service for European audiences.

A article reports that the Video Marketplace would allow users to download movie (and television) content both quickly and cheaply, which could well have a detrimental effect on regular DVD rentals.

Redmond-based Microsoft has said that it’s currently talking with leading movie suppliers such as Disney, Paramount, and Warner Bros. in order to secure plenty of Video Marketplace content prior to the service’s official European launch – which is expected before the close of 2007. The American software behemoth is also communicating with television broadcasters (including the BBC) to widen the service’s scope to popular TV programming too.

"We want to offer a full catalogue of films, TV, music videos and games that people can download to their Xbox," enthused Stephen McGill, head of Microsoft’s UK marketing division. "This service has been very successful in the US and now we want to bring it to Europe."

However, despite the apparent benefits of Video Marketplace for those armed with an Xbox 360 console – along with the 120GB HDD for expansive download storage – its low prices could yet leave traditional DVD consumers and stockists fuming.

Movie downloads on Video Marketplace are expected to cost users between £1.50 and £3.00 GBP (approx. €2.20 and €4.40 Euro). By comparison, DVD rental prices taken from leading chain Blockbuster place charges on an average of £3.95 GBP (approx. €5.80 Euro), while high street retailers sell new DVD releases for around £10 GBP (approx. €15 Euro).

"If you could download a film you don’t ever need to buy a DVD or ever visit a high-street video shop," commented Tom Dunmore of tech magazine Stuff before outlining that good content selection coupled with a cheap download price could well see Microsoft’s games console evolve into an accessible media hub for the living room.

Microsoft’s US-based Video Marketplace, which launched in November of 2006, currently has around 2,100 hours of movie downloads available to Xbox 360 owners.

The Xbox 360’s 120GB HDD presently sells in the US for $179 USD (approx. £90 GBP, €130 Euro). The matte black 120GB Elite Xbox 360, which also comes equipped with HDMI output as standard, costs $479 USD (approx. £235 GBP, €350 Euro). The official European prices have not yet been confirmed.

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