As online movie competitors rise, Vongo falls

NOTE: GrowthBeat tickets go up $200 this Friday at 5pm Pacific. VentureBeat is gathering the best and brightest in modern digital marketing to help declutter the landscape, simplify the functions, clarify the goals, and point the way to success. Get the full scoop here, and register by Friday to save!

Online movie distribution is becoming a crowded field. So crowded that casualties are already popping up.

You’ve most likely heard of the big names with online movie offerings: Amazon, Netflix and Apple. But perhaps you hadn’t heard of Vongo, a service run by the premium movie channel Starz, which launched late last year. That was part of its problem. Vongo is now all but dead.

The service won’t be officially killed off but Starz will stop promoting it. Eventually, this will kill it. Instead, Starz is going to focus its effort on a new offering, Starz Play, which will be offered in partnership with Verizon, according to The Los Angeles Times. For $5.99-a-month, subscribers will get access to Starz content over the Internet on-demand. These films will also work with select portable devices.

Basically this amounts to Starz taking on a partner, giving a price-cut and changing the name of its online video service.

Vongo is also subscription-based, giving users unlimited streaming access to its catalog for $9.99-a-month. The problem, according to Starz spokesperson Tom Southwick, was that the selection of films wasn’t broad enough, as he told The New York Times.

It’s unclear how this new Starz Play will fair much better given that it will presumably have the same content. Still, this new service will be available now on television, provided you have Verizon’s FiOS service. Otherwise, you’ll be right back online — basically with Vongo — with a new name.

While some will argue that Vongo’s example is exactly why the Netflix/Roku set top box won’t work, remember that it is basically a $99 one-time investment for a service you’re likely already paying for (Netflix). Vongo required you pay a monthly fee without having the bonus of the largest online DVD movie rental collection to fall back on.


We're studying digital marketing compensation: how much companies pay CMOs, CDOs, VPs of marketing, and more, with ChiefDigitalOfficer. Help us out by filling out the survey, and we'll share the results with you.