Hollywood to sell movies online – Monday, April 3, 2006

It is 4 years and 4 months later and look where we are now. CinemaNow, Movielink and other services have all failed.  What’s a studio to do?  Blockbuster will be filing for Bankruptcy shortly and they plan to re-emerge from Bankruptcy to do what? Put kiosks into stores next to other kiosks? I feel for the debt holders who have lost quite a bit of money. I wonder if Blockbuster ever paid attention to what happened in the music business?  Apple certainly did. Maybe Steve Jobs will have a partial answer comes September 1st.  And now Google will be offering pay-per-view movies.

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Hollywood to sell movies online
Monday, April 3, 2006; Posted: 5:38 a.m. EDT (09:38 GMT)

Brokeback Mountain” will be one of the first films available to download.

LOS ANGELES (AP) — Hollywood studios will start selling digital versions of films such as “Brokeback Mountain” and “King Kong” on the Internet this week, the first time major movies have been available online to own.The films can’t be burned onto a disc for viewing on a DVD player. Still, the move is seen as a step toward full digital distribution of movies over the Internet. Six studios said they would announce Monday that sales will begin through the download Web site Movielink. The site is jointly owned by five of the seven major studios. Warner Bros., Universal Pictures, Sony Pictures, Paramount Pictures, Twentieth Century Fox and MGM will offer some first-run and older titles on Movielink. New films will be priced similar to DVDs — between $20 and $30 — while older titles will sell for $10 to $20. In a separate announcement, Sony and Lionsgate said they will sell films through the CinemaNow site. Only films from The Walt Disney Co. will not be available, although both services say talks are ongoing.

“Digital delivery hasn’t arrived until the major studios allow home ownership, and now they have and now digital delivery is very real,” said Jim Ramo, Movielink’s chief executive.

Studios will sell some new films online the same day they become available on DVD. Most films will be made available within 45 days. Studios began renting films online several years ago as a way to combat illegal downloading. Movies have been available through the Internet 30 to 45 days after hitting video stores, with rentals lasting just 24 hours for viewing primarily on computer screens.

Digital delivery of video grew rapidly after Apple Computer Inc. began selling episodes of TV shows through its iTunes online store last October. This year, devices powered by new Intel computer chips and TV service delivered over the Internet will allow more consumers to watch Web video on their TVs instead of their computer screens, a key factor in downloading to own, analysts said. Studios are being cautious about selling films online in part because DVD sales produce more profit than box office receipts.
But studios are also preparing for the day when major retailers such as Wal-Mart and Amazon.combegin offering their own movie download services.

“The important thing is to embrace the future, respect the economics of DVD but move forward into digital delivery,” said Ben Feingold, president of Worldwide Home Entertainment at Sony Pictures. The films available on Movielink can be stored indefinitely on a computer hard drive or transferred to as many as two other computers. The movies can be played on a TV if the computer is part of a home network. A copy can be burned to a DVD as a backup. Discs can be played on up three PCs authorized by Movielink but cannot be viewed on a standard DVD player because of special security coding.

Consumers will not be able to transfer the films from a PC or laptop to a handheld portable viewing device. But that capability should be available sometime within the next year, Ramo said. Films on CinemaNow will be playable on just one computer. The company said it eventually expects studios to allow consumers to burn movies on DVD and transfer them to portable devices.

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TV Online – It’s NOT on TV and worse, everyone appears to be all the same.

At first, CinemaNow and MovieLink were the 2 places for online consumption of movies at first, then TV shows were added. Well intentioned but clunky and smothered with restrictions on viewing the content, it was accepted only by the most avid online enthusiast with the fastest connections to the Internet.  You could download Indiana Jones ( 30-45 days AFTER its DVD release) and by the time you were done, Indi 2 was in the theaters. It was painful.  But your yardstick for measuring success was simple – in the number of downloads.

Then came the notion of streaming video just like youtube was doing (and much illegal content on youtube ) and then came a crop of youtube look-alikes, then joost appeared and a whole slew of joost-alikes came along.  Once the social networks hit big, there were social networks built around content, blip TV, veoh’s, revvers, myspaceTV, etc.  Somehow, someone felt that if I was online at Facebook or a MySpace member then I must also like to watch a certain genre of films or type of TV show (which is mistake # 1) and that I’d watch it online (mistake # 2).  The recommendation engine ‘notion’ applied to me in this way was all wrong!

Soon, established brands launched their own ‘branded’ version/site of online TV and movie consumption; iTunes,  amazon video on demand (downloads) , hulu, reeltime, tidaltv, jaman, babelgum, TheWB + and more. Then we have all the set-top ‘boxes’ that arrived, X-Box downloads, Vudu, Roku/Netflix, the late Akimbo, TiVo, Comcast, ATT-U-Verse and the list goes on.  Now, after all of this ‘launching’ and all of these press releases and all of these disparate systems, I have 2 observations to make. The FIRST is that unfortunately, EVERYONE SEEMS TO HAVE MUCH OF THE SAME MOVIES AND TV SHOWS. There is no real ‘differentiation’ other than the domain. No one ‘programs’ a service anymore.   It seems depending on the service and who they have been able to strike a deal with, they simply put every single piece of content up online in mass, categorize each piece with the usual tags like ‘adventure’, ‘sci-fi’,  ‘suspense’ etc.  Each is advertising not hundreds, but ‘thousands’ of titles…4,500..10,000, 40,000 +. There is no ‘guide’ other than search fields embedded somewhere on each site for the consumer to ‘search’ for his or her movie or show. The SECOND is that despite all of the many services calling themselves ‘online TV’ or ‘ IPTV’, NONE OF THEM ARE ACTUALLY CARRIED ON TELEVISION. Unless you’ve hooked up your PC/MAC to your LCD, your computer bound. With the exception of a few ‘boxes’, most online TV websites require you to watch and pay to watch this content on your computer. I can see watching some of this content for free on my computer, but I have a hard time seeing myself paying for any of it, especially since most of it I can already get on my cable or satellite TV in one form or the other (and I can find it easier with the TV guide on my cable or Direct TV). So, why should I be excited to see ‘Tropic Thunder’ show up online on my 21” PC screen for $ 5.99 ? It will show-up on my 45” LCD TV set anyway on PPV for the same fee, but I can sit on my couch and watch it.

UGC is easy to understand why its so popular. Most UGC is 2-3 minutes in length, hardly an hour and a half movie.

There are a lot of people online and yes, movies and TV shows are popular. But the reason most of us are online was not to find a movie or TV show. Initially, it was for email and for information and communication. It still is and even more so. It’s simply that our connections are that much bigger today and therefore this allows for the ‘broadcasting’ of video whereas years ago, it just was a ‘pipe’ (sorry, bad joke) dream.

Now, if one day, somehow I can get access to any movie or TV show I can think of sent directly to my TV set, (using the internet as a dumb pipe) regardless of what pay or basic cable service had the film under license… now that’s something I’d pay for or watch with commercials. I’d love to collectively watch some of Hollywood’s grandest and biggest failures that I choose like Michael Cimino’s ‘Heaven’s Gate’, ‘George Lucas’s Howard the Duck’ , Warren Beatty’s ‘Ishtar’, ‘Under the Volcano’ etc. Or, watch all of the ‘Thin Man’ films (William Powell, Mynra Loy and Asta). Ahh…maybe one day.

The new ‘kid’ on the block

Where can you download hundreds of new movies without DRM, in the format of your choice, for $2-5.00 a pop? Unbox? iTunes? NBC Direct? Movielink? CinemaNow? Nope. None of the above. Instead, try zml.com. From the same folks who brought us ‘allofmp3.com’ (now defunct) brings us the newest thorn in the side of Hollywood, zml.com (this stands for The Movie Library). Until Hollywood shuts this one down, it is the newest equivalent to what Kazaa or Limewire once was – access to full, brand-new Hollywood hits available for download – except with a download ‘fee’ attached.
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If you want to try this service I’d suggest getting a pre-paid Visa card because who knows what they’d do with your credit card number once grabbed in their database running out out of Russia. My sources tell me the site is up and functioning (I did not try it). From what I’ve read, it takes a little over an hour to download a full length film ( 700 meg Divx file) -this was on a DSL connection (so broadband would be significantly quicker). Formats run from Divx to iPod (mp4), PDA to DVD (vob).

These kinds of illegal movie download sites pop-up from time to time. But it seems when Hollywood legally ‘sanctions’ (officially ‘license’) a bona-fide movie download site, they always seem to shoot themselves in the foot or force the website to remain captive to its licensors (the studios) restrictive, anti-consumer un-user friendly demands which ultimately strangles the web service. Done right (which the illegal sites seem to get right because they DON’T have the studios in their faces) are the ‘key’ elements that go a long way to providing some traction and consumer popularity. These illegal sites all tend to promote 5 essential consumer ‘key’ elements that make them very attractive to use and popular. They are (1) broad choice of current or new movie’s offered + library (2) flexible choice of video formats (3) priced fairly (4) no DRM (5) ease of use

The 1 item that Hollywood can’t seem to get around is DRM. The use of DRM and the reasons why the studios insist on DRM has another solution than the “all or nothing” proposals of the past. This issue CAN be handled differently. Handling this another way would allow consumers to have the same flexibility that an ‘open’ (or non-DRM’ed file) digital file would have – complete interoperability between different kinds of hardware playback devices (DVD players, iPods, computers, etc.) AND still contain the DRM algorithm ‘flavor of the month’ that Hollywood desires. More on this another time soon.