Market Insight

Google Play Movies available across more countries and devices, with retail business model

November 14, 2012

Irina Kornilova Irina Kornilova Manager – Research & Analysis, Broadband Media, IHS Markit

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Google has added South Korea to the list of countries offering movies in the Google Play Store, which now includes the US, Canada, UK, Japan, Australia, Germany, France and Spain. It has also soft launched a retail option for movies in all named countries bar Germany.

Google Play Movies allows users to rent and buy movies and, (only in the US currently) TV series through the Google Play Store, which also provides access to music, e-books and apps. The movie service on Google Play was initially launched in the US at the beginning of 2011, with Canada, UK and Japan following later in the year. A European expansion took place over the summer of 2012.

Google Play Movies, being a part of the Google Play Store, is available online and via the pre-installed app on all Android smartphones and tablets, allowing access to content for all registered users.  Google Play music and movies will also become available on all Google TV sets, starting with Google TVs in UK, Germany and France in November 2012 with other countries to follow by the end of December.

The average price for new release movie rentals is £3.49 for standard definition in UK (€3.99 in Europe, $2.99 in US), and £4.49, €4.99 and $3.99 for HD movie rental in UK, Europe and US, respectively.  The choice of movies available for retail is still limited but the number of titles is being constantly updated. 

Google has also expanded its music offering, and now offers music for purchase in the UK.

We will be updating our online movie forecasts to reflect these changes over the next few weeks.

Google is in the process of building its own content-led ecosystem: it launched price competitive Nexus lines of smartphones and tablets this summer, in conjunction with Asus, Samsung and LG, which showcase the Google Play content stores. With the newly revamped Google Play service, Google is aiming to join the 'big-3' international services with content platforms heavily integrated with devices appropriate for media consumption - Apple with iTunes and iOS devices, Microsoft with the newly updated Xbox portal, Xbox music and Windows 8 and Sony with the Playstation Network. 

Google Play is intended as a unified portal, one content destination for all Android-based device users for apps, music, e-books, and now video content. This is important for Google, as although only two major North American Android-based device players have decided to use their own content platforms over Google Play (Barnes&Noble's NOOK and Amazon's Kindle Fire tablets offer content via their own NOOK Store and Amazon's services), these could conceivably be dangerous for Google, as Amazon and Barnes&Nobles are large players in the content sector, and emerging as significant tablet market participants. They could, theoretically at least, pull users away from Google's own content platforms, loosening its hold over how devices running Android software are used. They also bring into question the universality of the Android market.   But with the expanded range of business models, availability of movies on Google TV, and expansion into new markets, Google has a good opportunity to join the club of players which benefit from successful employment of content-plus-device ecosystems and, given the size and scale of Google in the device, search and display markets, looks to change the balance of power between the top services. Google has a particular advantage in a number of APAC markets, in which the Big-3 services have either not yet launched (Google is the first major international player to move into South Korea) or have not yet managed to secure significant market share compared to incumbents. TV show availability outside the US would seem to be the next logical move for Google Play, and would enhance the service's competitive profile still further.

Organization
Google Inc.
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