OnLive Needs to Embrace Its Streaming Ways

By  |  Thursday, October 7, 2010 at 8:09 am

Streaming is not just a delivery method for media, it’s a business model, but I don’t think OnLive realizes that.

Earlier this week, OnLive announced that it dropped subscription fees from its cloud gaming service, which handles all the intensive processing of modern video games on its own servers and sends back compressed video that runs on pretty much any computer. OnLive launched in June and was already giving away free 12-month subscriptions, normally $5 per month, as an introductory offer.

By dropping subscriptions, OnLive can bring in curious users without demanding credit card information. With free membership, people can still play game demos and eavesdrop on other gaming sessions. Rentals are available in three- and five-day increments, but if players want full access, prices are on par with retail, and guaranteed to run for at least three years. That’s where the offer gets icky.

When I say that streaming is a business model, I’m referring to video services like Netflix and Hulu Plus, and music services like MOG, Rdio and Napster. Users pay a monthly subscription that is far less than the price of content on its own. They give up the idea of ownership, but in return they get a lot more content.

That’s how OnLive should work. Because the games are delivered instantly, OnLive has the potential to offer players a video game smorgasbord, where they could hop back and forth between games as they please. Instead, OnLive’s main luxury is that you don’t need a muscular PC to run modern games. In exchange, you deal with slight input lag and the uneasy feeling that the game for which you paid full price might not be available to you in a few years.

I realize that innovative new business models might be beyond OnLive’s control. As with any form of media, the content owners — in this case game publishers — call the shots, and I’m guessing they don’t want to see their revenue boiled down to a flat, monthly rate. Like movies, video games are an industry of blockbusters, and you don’t see movie studios offering their latest hits on Netflix Instant Watch, either.

I just wish there was some way OnLive could be a little more disruptive with its business model, not just its technology, because paying ownership prices for streaming content seems like a dead end.



4 Comments For This Post

  1. Guest Says:

    THe publishers would shoot them down in a minute

  2. calm Says:

    Except that the dying publishing industry will soon call no shots.. Onlive and Netflix will make publishers obsolete in the way the net makes newspapers oboslete and search will sooner or later make ads obsolete (search doesn't actually need ads to run but i undermines adfertising one way or another.)

    Onlive only needs consolidate offer movies music and gaming for a single subscription, it can then also offer pc services. This type of consolidation is actually good because it undermines the kind of sponsorship driven communication that amounts to censorhip and loss of meaningful citizenship.

  3. @heulenwolf Says:

    I'd love to see such a disruptive approach where consumers have more flexibility in what their gaming dollar gets them. Its extremely frustrating to blow $60 on a game only to find out that its no fun to play after the fact. I would have loved to see Google really get behind the Nexus One and bring phone first, carrier second choice to consumers. Unfortunately, it wasn't in the cards.

  4. Josh Klint Says:

    If onlive doesn't offer a flat rate subscription, then their only pitch is you don't need a good computer. Selling a service to people who don't have any money isn't a good strategy.