5 Streaming Services Making the Movies Irrelevant

TheStreet.com

PORTLAND, Ore. (TheStreet) -- As Oscar night approaches, Hollywood and its theater partners aren't struggling to get Americans to see films: They're fighting to get them out of the house.

In the past decade, the places where consumers watch movies have becomes as varied as what they're watching. According to BoxOfficeMojo and Rentrak data, movie ticket purchases jumped 6.1%, from 1.283 billion tickets in 2010 to 1.361 billion last year. That's still well off the record 1.575 billion tickets sold in 2002 and is only the third time ticket sales improved in the past 10 years. Though box office receipts hit a record $10.8 billion in 2012 and topped $10 billion for the fourth consecutive year, the industry had to release a record 657 films and charge an all-time-high average of $7.97 a ticket to get there.

That includes $13 tickets for moviegoers in major markets and $18 showing for folks who splurge for 3-D or IMAX IMAX . Those are big figures, but then again big-budget blockbusters such as last year's top-grossing film The Avengers cost a lot more to produce. It takes a lot to impress a moviegoer enough to abandon their couch, HDTV and, potentially, their sweet home theater system to brave the hordes of texting, talking, seat-kicking megaplex dwellers for the latest must-see film.

Despite this, moviegoer motivation continues to fade. Video-on-demand service has grown into a $1.3 billion-a-year industry for cable and satellite providers such as Dish Network DISH , DirecTV, Comcast DTV , Time Warner Cable TWC and Cablevision CVC , according to NPD Group's VideoWatch VOD tracking service. Internet-based video-on-demand service from Apple's AAPL iTunes and others kicks in another $204 million.

Meanwhile, the cost of an LCD television cratered 24% during the recession in 2009 and never recovered, according to NPD Group's TV research arm DisplaySearch. That cost fell another 6% last year and is forecast to fall 7% to 8% per year through 2015. Dealnet notes that prices of 55-inch and 60-inch HDTVs are the lowest they've seen in a year. Meanwhile, 3-D HDTVs that were going for more than $1,400 last year are now available for as little as $450.

Mostly, though, it's moviegoers' ability to stream video directly into their home without theaters or even cable acting as middlemen that is inflicting the most damage. For the monthly price of an average movie ticket, viewers don't get first-run films, but they get a whole lot of motivation to save their money until said content hits their queue. With the Oscars coming up and nominated films such as How To Survive A Plague already streaming, here's a look at the five streaming services:

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Netflix NFLX
Streaming cost: $8 a month

No, Netflix didn't make any friends when it split its DVD and streaming services and doubled the price of the whole package. It didn't make many folks happy when it allowed content partners such as Time Warner TWX and Sony SNE to withhold "new" releases for months at a time just to build its streaming library.

It's still not making investors happy by inking $300 million-a-year deals such as the one it made with Disney and adding to its more than $5 billion in content-related debt. Guess what? The customers don't care. Netflix's streaming audience has grown from 21.7 million in 2011 to 27.1 million last year. Of its 200 most popular movies and TV shows, 113 aren't on other streaming services. The most any other competitor has is 73.

Right now, Netflix is streaming the Oscar-nominated documentaries How To Survive A Plague, 5 Broken Cameras and The Invisible War. It's not certain how long Netflix can keep streaming prices this low or if exclusivity deals with Time Warner and Disney will pay dividends in the near future, but having the ability to stream a giant catalog of films to dozens of devices just about anywhere has helped Netflix weather a tough two years.

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Hulu Plus
Streaming cost: $8 a month

So NBCUniveral CMCSA , Fox Entertainment NWS and Disney-ABC's DIS television streaming venture that lets scores of TV geeks watch Community a day after it airs also streams movies? Yes, but it pays to drop that $8 a month.

Hulu Plus touts past Oscar-winning films including Doubt, Frida, Sling Blade, Seven Samurai and The Crying Game, but you get only 30-second previews of the films unless you sign in. While Hulu Plus' episode content is still chopped up with commercials, its movie catalog runs uninterrupted and looks just fine in HD when streamed through a set-top box such as a Roku.

Things can get a bit choppy when viewing from a laptop, tablet or smartphone, so mind your connection, and Hulu Plus' library is still a bit thin compared with those of its competitors or even its television offerings. Still, Hulu Plus has jumped from 250,000 paying subscribers at the end of 2010 to nearly 3 million today. Its revenue has more than doubled over the same span.

If Hulu Plus ditches the commercials entirely for paid customers and makes its playback just as smooth on every device, it can be a huge player for films if its content partners can get it together.

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Amazon AMZN Prime Instant Video
Streaming cost: $79 a year

Amazon doesn't let anyone in on just how many Amazon Prime customers there are, but the company insists it's millions. It also tries to present Prime as something other than a Netflix competitor with its two-day-shipping and Kindle library rentals, although it experimented with $8-a-month subscription plans similar to Netflix's last year.

It has very little in the way of exclusivity, but had no problem signing movie channel Epix on as a partner last year after Netflix balked at a pricey exclusivity deal. Amazon's similar deal with Universal doesn't give it an advantage, but it gives current Amazon customers something to consider when they look at Netflix's $8 a month service and see that they can get streaming and faster package delivery for about $1.40 less each month.

Oh, and they're able to do streaming video rentals of new releases for a few bucks a pop, which just isn't an option for Netflix subscribers.

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Redbox Instant
Streaming cost: $8 with four DVD kiosk credits

This one's still in beta testing but has tremendous potential with Coinstar CSTR and Verizon VZ at the helm.

You can still stream only through Apple iOS, Google GOOG Android devices and Microsoft's MSFT Xbox 360 and the catalog is roughly 2,000 movies found easily on competing streaming services thanks to a deal with Epix. While there are some fine offerings such as Lars and the Real Girl and Winter's Bone and cult classics including Back To School and Roxanne, you're looking at a whole lot of bargain bin and straight-to-video films until this service gets the content to back it up.

That said, the kiosks credits they're throwing in offer access to new releases similar to that of Netflix's DVD plan. That bridge helped bring customers to Netflix streaming and, as long as Redbox learns from Netflix's mistake and doesn't go doubling the price off the bat, should offer Redbox Instant a lifeline as it builds its library.

That could take a while. Of the Top 200 items streamed on Netflix, Redbox Instant has exactly a dozen of them.

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Vudu
Streaming cost: $3.99 per rental, purchase prices vary

Consider this the second-run theater in your living room.

You had to figure Wal-Mart WMT wasn't going to take an HD streaming service lightly when it bought Vudu in 2010, and it's come up with a burly competitor for iTunes and Amazon Instant Video. By giving users 10 rentals free just for registering, Vudu joined Netflix, Redbox and other services in eliminating the gamble and going right to the movie watching.

Its ability to pump out recent releases in 1080p HD gives it an enormous advantage over Netflix, while its HD pricing is competitive enough with Amazon to make it a viable option on on which where Amazon doesn't exist. With Vudu available on the Xbox 360, Sony's PlayStation 3, Roku boxes, iOS and android devices and several HDTVs and Blu-ray players and its stockpile of HD films outpacing that of the streaming competition, the Wal-Mart streaming package is doing its best to justify its relative expense. Just offering users the option to stay home is a good start.

-- Written by Jason Notte in Portland, Ore.

>To contact the writer of this article, click here: Jason Notte.

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