Google to close Video download service

Move puts digital rights management protected purchases in question

By Jennifer Netherby -- Video Business, 8/13/2007

AUG. 13 | Google’s decision to close its online video download service this week sparked an Internet uproar, as users will no longer be able to view their digital rights management-protected TV and movie downloads bought from the site.

On Friday, Google sent an e-mail to users announcing it would close Google Video on Aug. 15, calling it “an effort to improve all Google services.”

Google is giving users a $2 credit at online retailers that use Google Checkout for all videos purchased before July 18. Online commenters at blogs such as Slashdot, however, argue that users should be given a full refund for purchases because permanent downloads bought by users will now be unusable.

Google’s online video store has failed to gain traction, while the company has shifted focus to user-generated and free videos through its purchase of YouTube last year.

Google launched Google Video at CES in 2006 with fanfare and deals with CBS, Classic Media and Sony BMG Music.

In August 2006, the site raised the service’s profile, moving the Video link to the search engine’s main page in an apparent attempt to drive traffic to the offering.

Since Google Video’s debut, Amazon.com, Wal-Mart.com, Apple iTunes, BitTorrent and others have launched similar movie download services. Last week, Blockbuster announced it had acquired movie download site Movielink.

But online videos have been slow to catch on. According to NPD Group, just 380,000 U.S. households, .6% of Internet households, bought a movie download in the first quarter of the year.

A survey last week by Parks Associates showed that just 13% of those who paid for a download felt it was worth the money.

Google’s closure, rendering those paid downloads useless, is unlikely to help change that. Many bloggers called the move an example of how DRM is bad for consumers.

At a minimum, it could keep consumers cautious when it comes to buying downloads.

Writing on his blog, Jupiter Research analyst David Card warned the closure could make consumers wary of digital.

“We’ve seen a physical format/device combo go out of manufacture before: wax cylinders, 8-tracks. But can you think of any consumer-purchased medium that actually becomes unusable while there are players that still work?” he said.