By Jon Fortt
August 12, 2007

Days after a study showed that consumers are unhappy with the quality and value behind video downloads, Google (GOOG) gave them further cause for grumpiness: The company announced that it will shut down its video purchase and rental service, a move that will keep consumers from accessing videos they have already purchased.

An excerpt from the e-mail Google sent to users:

As a valued Google user, we’re contacting you with some important information about the videos you’ve purchased or rented from Google Video. In an effort to improve all Google services, we will no longer offer the ability to buy or rent videos for download from Google Video, ending the DTO/DTR (download-to-own/rent) program. This change will be effective August 15, 2007.

The move drew immediate criticism from Google watchers. “It’s a mistake not to fully refund every dollar in video purchases,” said Michael Arrington at TechCrunch. “Users are going to be hesitant to try out Google services in the future

if they can’t believe that something they are buying is really theirs to keep.” Also, David Card at JupiterResearch: “We’ve seen a physical format-device combo go out of manufacture before — wax cylinders, 8-tracks. But can you think of any consumer-purchased medium that actually becomes unusable while there are players that still work? Ouch. … Not a great way to build consumer confidence, guys.”

A Parks Associates survey released last week showed that consumers gave low ratings to online video download services, including those from (AAPL) Amazon (AMZN) and Netflix (NFLX). It wasn’t just the price that turned people off; even those who pirated videos were unhappy with the quality.

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