By Jared Newman | 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.