I think it’s time to revisit this morning’s news on IFC’s future as a distributor, for as the day has progressed, there’s been some interesting discussion. Here’s a sampling of what the kids are saying on the webz.

Both the indieWIRE and the Variety pieces took IFC’s version of the story at pretty much face value. A common refrain in today’s reaction pieces has been, “Just because they’ve got the movies on the cable boxes, doesn’t mean anyone’s buying them. Have you seen download data? I haven’t. Someone should really get some.” Or, as Brian Newman puts it,

Excuse me, but “available” to 40 million subscribers is a worthless figure. IFC keeps spinning, as if their life depended on it (hint hint) … All this means is that four cable systems wanted to offer VOD, and IFC needed to suck up to them all in order to remain being carried on these services. IFC needs the cable operators more than they need IFC, and while a kid renting a film in Des Moines via VOD is great for Des Moines, its not ground breaking news. If Frankel was so happy with the numbers, perhaps he would have shared a few of them with us!

In response to that, Sujewa Ekanayake dug up this article, which contains a breakdown of box office grosses for a number of 2006/2007 IFC FirstTake releases. The article displays the figures to demonstrate that VOD is hurting theater business, and they’re certainly low enough to impress — of 15 films, only four grossed over $100,000, and most made less than $50,000.

But Newman says he’s “still not buying it” as evidence that FirstTake is making money, either in homes or in theaters. And even if IFC is breaking even, chances are filmmakers aren’t. “Net to producer - I don’t know, but rumor has it that IFC pays 50/50 after expenses. And after expenses can mean a lot of things.”

I maintain that IFC’s VOD distribution (of which, unlike Newman, I am a regular paying customer) is extremely good for the audience, and I think it must help films that would otherwise maybe play on two screens in New York and LA (if that) finder a wider audience. But to me the question is, what’s the end product? Already, I think most indie filmmakers on this level think of theatrical exhibition as an advertisement for a future DVD release. If we can safely say that no one’s getting rich off of VOD, is it at least functioning as a decent commercial for DVD sales? Or is it just eating into those potential profits, as this story suggests?

Blockbuster supporters (and stockholders) who got all excited about yesterday’s announcement that the video chain has purchased movie download site Movielink might want to wait before opening that bottle of champers. In a blog post titled “Video Downloads … Suck,” Om Malik*** points to a study by Parks Associates, which was (apparently coincidentally) released yesterday. Only 16 percent of those surveyed said they were happy with the selection of movies and TV shows available for download online, and only 13 percent agreed that those videos are sold for a reasonable price. “In other words,” says Malik, “The majority think downloads are too expensive and they suck.”

With all the “downloads are gonna save the industry” talk that seems to be going around, this would seem to be a study worth paying attention to, but I do wonder about the demographics of those surveyed. And the terms used in the press release also seem dangerously vague. Parks acknowleges that they’re lumping together products obtained from both legal, paid services like iTunes, and illegal P2P networks, which is already problematic, but it would seem that the term “video downloads” would be subject to even further confusion. Are we talking about studio movies, or “user-generated” videos, or both? What about streaming? What about YouTube? What about porn?

The findings of the Parks study certainly seem to stand in contrast to those expressed by Chuck Tryon, in his recent article in Flow. Tryon describes the experience of using Netflix’s Watch Now streaming service as a positive one, not least because it allows him to escape the “bright red envelope collecting dust” syndrome common to so many Netflix users. As Tryon puts it,

The Watch Now option feeds the desire for immediacy or spontaneity associated with trips to the video store. Audiences are not forced to wait the 2-3 days for that little red envelope to show up in the mail…Instead, as I’ve watched online, I’ve found myself watching movies more frequently than at any time in the recent past, while being more willing to take chances on certain movies, based in part on the perception that I’m making a relatively spontaneous decision, one that won’t result in a movie sitting on my shelf for several weeks at a time.

Tryon notes that one potential downside of the Watch Now system is that you’re stuck watching a movie on a computer, which tends to transform the idea of renting a video from a potentially communal to an almost necessarily solitary experience. But with Netflix rumored to have a set-top box in the works, that problem may be temporary. I’ve long been of the opinion that once we get to a point where there’s a more feasible way to connect files from the computer to the TV, downloading will explode. But then again, that theoretically should have been accomplished by the AppleTV, and in my three months as an AppleTV owner, I’ve yet to find a film for sale on the internet that I both want to watch, and can watch through all the Apple DRM.

If I took part in that survey, I’d have to concur that the current selection of movies available for download is not ideal–but if the Apple Store were to stock the movies I want to see, I’d be downloading left and right.

***Full disclosure: I write a weekly column for Om Malik’s NewTeeVee.

Word hit the web late last night that Blockbuster has acquired Movielink, an online movies-on-demand service that, despite having the backing of some of Hollywood’s key content providers (ie: studios like Warner Brothers and MGM) has struggled to reach critical mass. In the deal, Blockbuster acquires Movielink’s technology, plus the rights to distribute their library, which, if made available through Blockbuster today, would instantly skyrocket their VOD service miles ahead of the content-poor Watch Now program over at Netflix.

So is this a genius move in the big blue giant’s ongoing battle with their red envelope competitors? Or is it a sign that the former king of video rental is now so weak that it has to outsource innovation? Opinion is split:

Desperate!!!
“It’s a desperate move to shore up Blockbuster’s online failures…[the deal] gives Blockbuster merely a place at the online-video table, not the ability to eat everyone else’s lunch.” — Owen Thomas, Valleywag

“[S]ignals more than a little desperation on the part of Blockbuster … Blockbuster is pretty much admitting they’ve been unable (unwilling?) to develop a home-grown service and so shelled out a bunch of cash (which they don’t have) to buy their way into the game.” — Chris Thilk, Movie Marketing Madness

…Read more

***The Hollywood Reporter’s Barry Garron offers a summary of the state of Paris Hiton’s post-jail career. “Paris Hilton told Larry King that she has two films lined up for the summer. It is absolutely inconceivable that she will perform in either of them any better than she did while dodging King’s mostly superficial questions on Wednesday night.”

***Ready for a boldfaced onslaught? Ryan Gosling will join Rachel Weisz in Peter Jackson’s adaptation of Alice Sebold’s The Lovely Bones. The casting, according to THR, is “a coup for Jackson and Dreamworks,” because Gosling takes only a fraction of the many roles he’s offered.

***Blockbuster and Netflix have settled their mutual lawsuits. Netflix had sued Blockbuster for stealing their rental-by-mail patent; the ailing brick-and-mortar giant had counter-sued, claiming Netflix was attempting to establish a monopoly over the paper-envelope market. All is well now…at least for Netflix, whose stock is worth roughly five times that of their blue-and-yellow rivals.

If you’re not up to date on the current status of the HD DVD format war, trust me — you’re not alone. In 2005, when Engadget’s Ryan Block wrote this definitive side-by-side comparison of the two formats, it seemed like I might actually have to pick a side. But now that I have an AppleTV, the whole idea of a DVD format war seems completely meaningless. With more studios and filmmakers embracing online distribution every day, I seems like the HD DVD is destined to become the laserdisc of the late 00s. If you don’t believe me, compare Block’s piece from two years ago with this Engadget story from this weekend, through which we learn that customers are complaining that Sony’s high definition Blu-Ray disks have a tendency to grow some kind of mold which ultimately renders them useless.

So imagine my surprise when, moments after reading the rotting disk story, I scrolled down on my RSS reader and learned that Blockbuster–and, I swear, I’m not making this up–has announced that they will exclusively support Blu-Ray over Toshiba’s competing HD-DVD format in most of its stores. And yes, I triple-checked the date on the story–this decision was announced today. Tack on your own joke about the decaying state of brick-and-mortar, tangible product movie rental right … about … here.

Image of happy family enjoying a surely rot-free home entertainment experience courtesy of Blockbuster.com.