Video Ezy gives up on broadband for video on demand

Forget downloading movies from your local video store; by early next year, an on-demand video service from Video Ezy will rely on consumers to physically deliver movies from store to home for viewing on their TVs.

The upcoming offering, known now as Video Ezy's Electronic Video Store (EVS) and due to be launched early next year, will be built around a set-top box (STB) that the store's 3.5 million customers will be able to buy and install at their homes.

Equipped with a 160GB hard drive, the box -- in the works for 18 months with local developer Mobilesoft -- will provide 80GB of storage for movies and incorporate a standard-definition television tuner that will use the remaining 80GB as a conventional personal video recorder (PVR).

What is especially distinctive about the solution is the way movies will be loaded onto the box. Video chains have talked about offering secure, downloadable movies over the Internet for years, but stubbornly slow broadband services have driven Video Ezy to employ an alternative method: the humble iPod.

To choose movies, subscribers to the service will watch a number of preloaded movie trailers on their home set-top box, then choose the ones they would like to rent. When they next visit the store, the selected movies -- along with an updated selection of movie trailers -- will be downloaded in encrypted form onto an iPod or other USB type storage device. Each movie will take up around 1GB to 1.5GB of space, and consumers can choose multiple movies if they like.

Upon returning home, consumers will plug their storage device into the set-top box, which will copy the file onto the STB's hard drive and use a built-in GSM mobile network modem to request a decryption key from the video store's server. Once the video has been authorised and the customer's account charged, the movie will be unlocked for a set viewing period, probably 24 hours at first.

Video content will be watermarked for easy tracking and secured using Video Content Authority System (VCAS) digital rights management technology from US firm Verimatrix, which is trumpeting the Video Ezy win for its innovative content delivery method. By necessity, innovation has been just as important in the system's evolution, says Video Ezy Australasia general manager Andrew Gardiner.

"The premise is that downloading movies over broadband in Australia takes some time," he explains. "Compression technologies are improving and the speed of the Internet is improving, but it could be some time before customers are very happy with that which is delivered via broadband. For some of our customers, it could be years before the quality of broadband reaches their homes in country areas and allows them to download DVD quality material in a speedy, convenient way."

In the meantime, Video Ezy's customers will become movie couriers in a hybrid model that combines the readily available storage space built into iPods and other devices, with the ability to play movies on televisions rather than computers expected to make the service particularly appealing for many.

Early response to the very limited trials run so far -- STBs distributed among close associates that allow access to around 20 titles -- have shown the service is viable. Gardiner isn't making any guarantees, but estimates a market of "around 300,000 customers that would probably want this" out of Video Ezy's total base of 3.5 million customers. Franchisees of the chain's 500-plus stores are quite interested in the service, as are oversees licensees in Singapore and New Zealand as well as outside parties in countries like Brazil and South Africa.

Details of the financial arrangements around the STB are still being worked out, but Gardiner estimates a price tag of around AU$550 that will make it competitive with other standard definition PVRs on the market. Long-term contracts could potentially see the box offered to free, depending on the service's success. Also on the cards are an upgrade for the STB to support high-definition recording and playback, as well as purchasing and burning of movies to DVD.