January 31, 2006 11:28 AM PST

Legal DVD downloads to hit U.S. shores?

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An ambitious experiment with selling big-studio movies over a file-swapping network in Germany may portend new kinds of online movie sales in the United States--and give Microsoft new allies in its battle with Apple Computer.

Warner Bros. Home Entertainment said Monday that it would launch a peer-to-peer video download service in Germany beginning in March, using Bertelsmann-created file-swapping technology to sell movies online at the same time as they're released on DVD.

The service is being launched in Germany first, in part to address that market's rampant piracy issues. But similar services are likely to emerge in the United States from companies such as Amazon or Best Buy, said Warner Home Video President Ron Sanders.

"We don't know how big a market this is going to be in the U.S.," Sanders said. However, he added, "Amazon is a big existing customer, and it would be natural for them to evolve into a download model."

Warner has had "preliminary discussions" about selling movies by direct download over the Internet with all of its major retail customers, but has not yet signed deals, Sanders said. An article in Variety last week reported that Amazon was in discussions with studios and might launch a video download service as early as April.

Studios have been wary of digital download services in the past for several reasons, citing concerns about content protection, and about cannibalizing the DVD sales that have bolstered Hollywood bottom lines for several years.

However, the release of Apple's iTunes video sales service, and the ensuing enthusiastic response from consumers, has helped thaw studios' reluctance, industry insiders say. TV shows are now widely and legally available online from Apple and Google, among others, and big-budget movies may be on the way.

"The studios are certainly in the last few months taking a much more active look at digital (download sales)," said CinemaNow President Bruce Eisen. "Once Apple came out with video offerings, that's when studios really started looking at it more seriously."

The Warner service in Germany is based on file-swapping technology created by Bertelsmann, which could also be used for a United States service, the company said. It will launch in March.

However, it will also distribute the movies in Microsoft's video format and digital rights management software, indicating a growing level of comfort among studios in that format. Although there are several video-on-demand services, such as CinemaNow, that allow customers to download movies to watch for a short period of time, there are no services in the United States that allow permanent purchase of films encoded in Microsoft's format.

Microsoft has now shown that the strength of its rights management software is adequate for releasing films, the Warner executive said.

"We're very confident in that," Sanders said.

The emergence of Microsoft-allied services in the United States would almost certainly lead to a struggle between incompatible digital movie formats like the one that exists in the digital music business now. Apple distributes its films in the MPEG 4 video format, but wrapped with its own proprietary copy protection software.


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What about other platforms?
Let's not get into the "what platform is better" debate. There are other computer platforms out there. Microsoft will not allow people to participate unless they are running the current operating system (XP)or the previous version (W2K). At least the other technologies out there usually support more than one platform. Even if I were a current Windows User, I would want to know I had a choice... Even if I never used it.
Posted by jcobden (1 comment )
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Steven Sodoberg's Bubble Model Catching On
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Interesting that the big studios don't want to be left out of this innovative model proposed by Mr. Sodoberg (sex, lies and videotape, Erin Brokovich, Oceans Eleven).
Posted by marileev (292 comments )
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Greedy and overpriced
Hmm, greedy and overpriced service with severe user DRM restrictions in place!

Anything above USD$2-00 per movie with a control freak DRM installed is a ripoff!, as production and distrubtion costs for the media is minimal with p2p system!

Oh well, back to the drawing board!
Posted by heystoopid (691 comments )
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Delivery Method
This sounds like a great idea, somewhat.

For one I don't like the idea of a P2P network connecting to my computer under any circumstances, nor do I want to connect to one, such as the German version. Anywhere there is a large group of computers openly sharing files there is a potential for a security breach or worm attack. (The internet is wonderful, isn't it?) Also, will this network be purely legal films? Honestly, someone will figure how to upload their stuff to it and then it will become just like every other P2P network, open to the old bait and switch tactics that have plagued BitTorrent and the like. I'd be fine if they did it from a central server, however.

Also, how will they get it to the TV? First off, Windows Media Player doesn't have DVD burning, so that requires a seperate application, assuming they even give you a license to burn it. I could also see a set top box or DVR that one would hook up to their LAN to download the files, such as Comcast OnDemand or TiVo, somewhat. Then, however, unlike regular DVDs, you can't take it with you, which is a bummer. And then you would, of course, have to buy the box. You can always hook your laptop to the TV, but then you have to have a laptop with you to watch a movie.

Posted by BMR777 (61 comments )
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Forget it
The biggest and what should be the most obvious fly in this
ointment is bandwidth. Virtually every tech article, editorial, or
industry pundit froths at the mouth upon the very mention of
some proposed movie download download service, as if all that
needs to happen is for someone to throw a switch and then it's
magic; everyone gets rich. Think again.

For the purpose of brevity, I'll avoid all of the usual problems of
poor to brain-dead user interfaces on the portal and client side
as well as portable playback devices that look as though they
were designed by a 12 year old kid, to the extent anyone would
want to watch a full-length, feature wide-screen movie on palm
sized screen in the first place.

But Apple's video store has shown a light on a much bigger
problem (at least here in the US) that, as usual, the tech media,
in it's usual rush to welcome any talk of a movie download
service with open arms, doesn't seem to want to deal with. And
that problem is bandwidth. Take the Apple video store. If there
was ever a service that was poised to successfully deliver full
length feature films, there it is. But Apple's recent foray into
video has been, to date, tepid at best with nothing much more
than TV shows, less than an hour in length and iPod-sized, to
put into the consumer's mitts. Why? Jobs himself pretty much
answered the question, not just for Apple, but for everyone in
the industry. When Jobs introduced the Apple's video store, at
one point during the presentation, he paused for a moment and
said "you will need broadband for this." And all he was talking
about was simply downloading iPod-sized videos less than an
hour in length. He also compared the amount of time needed to
download videos as about the equivalent of downloading six or
so albums on iTunes.

To put it mildly, if there was ever an example of how ill-
equipped the internet infrastructure for downloading large
media files is presently here in the US, there it was. There are
still a substantial number of folks who are still using dial-up.
DSL services have come down in price, but only for about 1.5
megabits/sec of theoretical, never realized speed. There are
faster DSL connections, but they are about double the price and
still not enough. There is cable, but it's also expensive for most
folks, in fact, cable companies assume customers are willing to
pay more for more speed and build that into their pricing. And
even with cable, it still not enough. Not for anyone who is
accustomed to iTunes and has never had to deal with anymore
than the seconds it takes to download a song. There is going to
a very rude awakening when consumers, the majority of which
aren't really that tech-savy, find out how long it's really going to
take to download a feature length film. It just isn't going to
wash, certainly not next to the option of just taking a hike down
to the regular, tried and true terrestrial video store.

What about bittorent you ask? Forget it. Every bittorrent client
out there is designed for geeks. None possess a UI that's even
remotely close to what the average consumer would put up with,
and if someone where to build a custom bittorent-like movie
service with a custom client, well, good luck.

What about streaming you ask? Forget it. Streaming would have
to be bulletproof; one interruption and the party's over. And
streaming technologies have been at a standstill (no pun
intended) development-wise for awhile and never anticipated
the heavy-lifting required for this type of content.

The sad fact is, internet bandwidth in countries outside the US,
such as Korea and Japan, blow away anything that's available
currently in the US, and for that matter, anything that may be
available in the future. They are so far ahead of us in that
regard, it's not only pathetic, it's embarrassing. Those countries
could conceivably pull off a workable online movie service, but
in this country, it's going to be a joke until ISP's are motivated to
bring substantially better bandwidth to the table. And right now,
they're not. Not on the slightest.

Forget it.
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