Hi, my name is Terry Smith and I'm a developer and aspiring entrepreneur.

I’ve been putting a lot of thought into what the next big progression in online video will be… in terms of user generated content, it’s pretty clear that things are moving closer and closer to real time with UStream, Justin.tv and Qik.

But in terms of production video and movies, we’ve made little to no headway in a legal direction.  Hulu is a huge step for content providers, but for the internet community it was simply the next logical step.  But as has clearly been shown now, the ad model is extremely volatile and susceptible to downturns in the economy.  Granted, every business is, but advertising is one of the first things to come out of most companies’ budgets when profit falls.

So where do we go from here?  Torrenting is certainly popular, but since the industry has made it quite clear that is not an avenue they are willing to pursue, there have to be other legal directions we can go.

It is my opinion that the movie industry is going to go three directions for content delivery in the not too distant future, each one catering to a different market. So, without further ado:

1. Mail based delivery – These are the Netflix-esque companies who will do physical delivery, but it will be coordinated through online inventories as opposed to brick and mortar shops.  Netflix is an amazing service, but there is a level of rapport that needs to be built before people will be satisfied using this as an option.  However, this is the next logical step for those used to brick and mortar stores.

2. Set top boxes – The Apple TV and Boxee’s of the world are making quite a bit of headway here, but they don’t go far enough.  Now, given, this is due largely to the fact that most households do not have the bandwidth to do total streaming video, but we’re getting there.  This is where we really need to get the content providers on board.  And that won’t be easy because as with the recent Boxee fiasco, content providers are not yet ready to have their digital/internet content appear on televisions.  Which leads me into my third option…

3. Totally digital content – This is the content that can be watched anywhere.  And it’s as simple as an AVI or MPEG file, but it needs to be readily downloadable and, more importantly, portable.  I should be able to download a movie to my computer, watch it there, put it on my iPod, keep watching at the gym, etc.  Essentially, what this boils down to is my ownership of what I purchased and that I can do whatever I want with it as long as I’m not giving or selling it to others.

The biggest problem is this: I am perfectly willing to go to the movies and see a really good movie (ie. the new X-Men Origins: Wolverine).  But if I don’t really want to see it in theatre, I should have other options of seeing it.  Maybe not right away, but when it currently comes out in a digital format like on a DVD, I should be able to open up my set top box or app on my computer and buy that same movie for a reasonably low cost (maybe $4.99 or $9.99).  Make it REALLY easy for me to get to, make it easy for me to pay for and ensure that I can download it as fast, if not faster than I can currently torrent that movie and you’ve got yourself a business.

And enough with the DRM… People will ALWAYS find a way to get it for free if they really don’t want to pay for it.  But if you can do it for a reasonable price, with faster delivery than torrenting, and make it easy for me to own that content then in my opinion, you’re going to get a majority of people willing to pay for that service.  The ultimate goal is to make it easier to use your service than for people to get it illegally.

If there are any movie studio execs/content providers reading this, send me an e-mail and we can chat a little more