HD Video Faces Hurdles Across the Internet

Cost and antsy Internet providers will keep high-def content off the Web for now.

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Vudu
Vudu

DVD-quality video coming off the new Vudu service looks great on a large-screen TV. And high-def video would look even better. But I shouldn't hold my breath, says Kurt Scherf, an analyst at Parks Associates.

One big hurdle is the cost of sending high-def video across the Web. Estimates of the cost of distributing the huge files that are an HD movie range widely, but Parks analysts figure it's somewhere between $5 and $10, Scherf says. Some companies think they can cut that in half. Still, Vudu typically rents movies for $4 or less. "That doesn't leave much room to make money off HD," Scherf says.

Another potential roadblock looms in telcos and cable companies that control the Internet pipes coming into our homes. They're already concerned about traffic coming from services like Vudu (there's an interesting interview on that question at the Beet.tv blog). They'll be even more upset if services turn on HD video. Not only do their networks get swamped, but the content would be a stiff competitor to their own video offerings.