Bell Launches Online 'Bell Video Store' Amid Controversy

Bell beat Rogers to the punch and became the first Canadian company to launch a download-only video store. The Bell Video Store which launched on Wednesday morning, offers Canadians a selection of 1500 movies and TV shows to rent or own on a download basis. The cost to buy movies is $4.99, while rental fees start at $1.99 with a 30-day window to begin watching the movie. Once you begin watching the movie, you have 24-hours to finish watching before it deactivates.

While Bell did manage to trump Rogers by being the first Canadian company to offer a movie download store, it did so amid a firestorm of controversy. As we have covered previously both here and here, Bell and Rogers have both been throttling ie, 'traffic shaping' consumers bandwidth for some time now.

"It's horrible. At 4 p.m., you basically feel like you can't use the Internet anymore. Nothing's really working. Why does Bell think it can do this? It's not their Internet." - Stephen Watts, via National Post

How can Bell slow down multimedia traffic from some sources, while offering their own multimedia service where it is extremely unlikely they will curtail their own data-intensive offerings? For example, the Bell Video Store movies are offered at a maximum resolution of 720 x 480 with a 1,500-2,200 kilobytes-per-second average bit rate. When you get home from work and want to rent a movie for the evening, you will be accessing the Bell Video Store during the internet's equivalent of 'rush hour'. If Bell throttles their own traffic from their data-intensive video store, it could make their service practically unusable. This brings the entire issue of Net Neutrality and its enormous importance and relevance to consumers into clear focus. Both Rogers and Bell want to control the quality of your internet experience, and will potentially wield this control to serve their own corporate agenda.

While the TV show offerings are quite weak (and this is not Bell's fault, it is more of a licensing issue with U.S. content providers) much of the Bell Video Store's 1500 titles are the result of a partnership with Paramount Pictures. The movies are made available on a download-to-own basis the same day they are made available in retail stores which is a nice coup for Bell.

The Bell Video Store does have some major limitations that will not resonate well with consumers. For starters, the store's video format is laced with Microsoft's Digital Rights Management (DRM) software which means if you own an Apple Macintosh computer, don't even bother visiting the web site. None of the stores videos will play on your computer. It amazes me how cavalier large corporations can be to what is actually happening in the market place. Didn't anyone at Bell Canada get the memo that the computer world is going Apple?

This week research firm NPD Group announced that Apple dominated the U.S. retail market for high-end computers in the first quarter of 2008, selling two out of every three PCs priced over $1,000.

Echoing trends seen in other market data, NPD said Mac laptop sales saw year-over-year growth over 50 percent, while desktop sales grew 45 percent. During the same period the Windows PC market struggled with zero growth in laptop sales and a 25 percent decline in desktop sales.

NPD estimates the Mac’s overall U.S. market share at 13.8 percent, up from 9.5 percent a year ago.

The Bell Video Store is basically saying to a growing army of Apple Mac users, 'Go away! We don't want your business.' In addition, anyone who owns an Apple iPod will not be able to play Bell Video Store's movies on that device either despite the fact that the iPod has a 70%+ market share to Microsoft Zune's 4%.

Bell does deserve some kudos for being the first to trail blaze into the downloadable store space in Canada. It will be interesting to see what kind of traction they are able to get given the limitations of the service, and whether they will be able to continue dodging the growing concern over Net Neutrality.

TAGS: Bell, Canada, Download, Net Neutrality, Rogers, Store, Video

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