Dixons outlines full VOD service

Dixons is moving into the increasingly competitive video-on-demand market with the launch of Knowhow Movies, a non-subscription based film-streaming service – a move that pits the high street brand against providers such as LoveFilm and Sky.

knowhow movies

Knowhow Movies, which launches 1 March, will offer more than 1,500 films and TV shows to stream or download via PCs and Macs. It will roll out to smartphones and tablets by spring, internet connected TVs by summer and games consoles such as Xbox by autumn.

Dixons has partnered with four major film studios, Disney, Pixar, Warner Bros. and Momentum and expects to sign content deals with two more in the next two months. It is also in discussions with large TV studios for small screen content.

New releases will be available on the same day as DVD launch, which it claims is quicker than rival platforms such as Sky.

The Knowhow Movies service will come preinstalled on all internet connected devices sold in Currys and PC World.

Users will be able to watch content across multiple devices with what the company claims is a unique pause and play function that lets viewing resume on an alternative platform. It will also have a cloud-based service to save purchased content.

The move, which also puts the retailer in competition with recently launched Netflix, Tesco-owned BlinkBox and broadcasters BT Vision and Virgin Media, provides an alternative revenue stream when high street sales are suffering from low consumer confidence. Same store sales at fell 5% in three months to 7 January.

Speaking to Marketing Week at the launch of the service, Niall O’Keeffe, Knowhow development director, says the service is a natural extension from selling internet connected television.

“We sell 4.5m internet connected devices each year in our stores and we serve 19 million customers each year so we have a ready-made audience. We’ve got a right to play in it because it’s a natural extension to selling smart TVs to providing a great content service.”

However, Nigel Walley, managing director of media analysts Decipher, questions whether the retailer has the right kind of relationship with its customers to make the service work. BSkyB, which offers the Sky Go streaming service, has a closer association with movies, he adds.

“It comes down to consumer belief – do consumers believe the brand. Do they view it as a content or a service move … Dixons is at a weakness in its ability to talk about content, certainly against the likes of Sky.”

Dixons plans to role out an in-store marketing programme to support the launch. Staff at high street brands Currys and PC World have undergone a training programme to sell the service. Film ‘bundles’ and content packages will be offered with purchases of products like Blu-Ray players to encourage trial of the new service.

Prices for streaming will start at 99p for TV shows and £3.99 for new releases. Older films will be cheaper. The platform has been developed by Rovi, which also powers the video-on-demand service offered by Best Buy in the US.

Total video market, 2011: £2bn
Digital video market, 2011: £200m
Digital Video market is expected to be worth £450m

Source – internal estimates

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