July 6, 2005 4:00 AM PDT

Where's the iTunes for movies?

(continued from previous page)

the old pay-per-view category, which means they get first-run movies as much as two to three months behind video stores or Netflix, and are allowed to offer those movies for only a few months at most. Cost is also a factor, with Netflix providing a much better bargain for frequent movie watchers.

That's badly hampered on-demand's ability to compete with DVD rentals. Even Netflix CEO Reed Hastings, who plans to launch a Net-based service later this year, has publicly said he expects the first versions to be "underwhelming."

Indeed, these tightly drawn categories also hamper the ability to create such an online Netflix, in which subscribers would pay a monthly fee for unlimited viewing. Under the studios' current contracts, cable television companies Starz, HBO and Showtime have exclusive contracts for subscription services that cover both broadband Internet and cable television distribution.

"The truth is that VOD (video on demand) can get a lot better," said Macrovision Senior Marketing Director Adam Gervin, whose technology is used to protect movie content against copying. "What people want is the ability to get a movie from a cable or satellite provider closer to the same day they can buy it at Wal-Mart. But that won't happen until the studios feel confident that their content won't be cannibalized."

To be fair, the technology for the perfect video-on-demand service isn't quite ready either.

On the cable television side, what's available is essentially constrained by the server capacity of the cable company. Starz, which tends to have several thousand titles under license at any given time, usually has only a few hundred available through cable networks such as Comcast.

Internet-based services have the flexibility to offer far more content. But even as bandwidth has grown, and video-compression technologies such as Microsoft's Windows Media 9 and the new MPEG 4 AVC have improved, studio executives aren't satisfied with the quality of delivery.

Once a movie reaches the home, most Internet services remain aimed at the PC, which remains a poor alternative to the television for watching movies. However, a new generation of "media adapter" devices, scheduled for release this fall, promise to make it increasingly easy to stream video from a PC directly to a television.

Taking the long way around
Given these constraints, it's no wonder that the Net's on-demand services have remained small. But a few changes are on the horizon that could transform the business.

Some involve new technology that will bring on-demand rental services into the movie sales business. Studios are warming quickly to the idea of "digital sell-through," an industry term for selling a permanent copy of a movie that can be downloaded to a computer. Sony Pictures, Warner and others expect to offer this kind of online distribution as early as this year, executives say.

CinemaNow CEO Curt Marvis, who has been negotiating with studios since his service opened in 1999, says this could help reinvent his business.

"I think the DVD business has proved that people like to collect movies, maybe more than people anticipated," Marvis said. "I think when we get into digital sales, where sell-through has some pricing advantages, the content offering can be more broad and vast and deep than what you get in the retail store."

Studios are also talking about new digital sales channels, such as selling movies on flash memory for mobile phones.

"It's not about locking things up," said Marsha King, the general manager of Warner Home Video. "What we like to do is find as many ways as possible to make compelling propositions about movies, so that consumers can find exactly what works for them. What we investigate are things that consumers would like to see. It comes down to whether consumers want to do it."

Marlow's Greencine and a handful of other companies are pursuing a more indie approach, which may ultimately do as much for the future of digital distribution as the efforts of Greencine's venture-funded and studio-backed rivals will.

Greencine today has about 3,000 works available for on-demand viewing. It's in the final days of an online documentary film festival, where the winners will be shown in a San Francisco theater.

Marlow's goal now is to persuade independent filmmakers to put their works on Greencine at the same time as the theatrical release. Even the biggest indie films rarely get shown in theaters outside the biggest cities, and the smallest ones are lucky to find a theater screening at all, he notes. On-demand can level that playing field.

It's still a hard road, although he thinks some filmmakers with recognizable names will assent this year. The problem is that old traditions, from the windowing to eligibility for Academy Award nominations, still die hard.

"If you're fortunate enough to get a review in The New York Times, but you're only playing in New York, it seems wise to leverage that publicity with a way that people can actually watch the film," Marlow said. "We keep talking about it but haven't found anyone bold enough yet to try. But we're close."

 

Correction: The original story misquoted Macrovision Senior Marketing Director Adam Gervin. Gervin's quote should have read: "What people want is the ability to get a movie from a cable or satellite provider closer to the same day they can buy it at Wal-Mart."

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22 comments

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Why VOD just won't cut it
A. Full-frame. I can just about guarantee that most VOD products would be full frame to cater to the anti-widescreen crowd, thus alienating those who respect the filmmakers' vision. Show the movie in its CORRECT aspect ratio, or don't show it at all. Those who support the filmmakers' choices for aspect ratio - and there are more of us than people will care to admit - will wait for the widescreen DVD so that we can see the movie as it is supposed to be shown. (This of course assumes that the movies in question are meant to be in widescreen. Duh.)

B. Video quality. DIVX is the only way to go. But you can bet that Microsoft will have something to say about that, so DIVX probably will not be the choice. It will probably be WM9, thus alienating Linux and Mac users. That's not a lot, compared to Windows users, but the numbers are growing, particularly in the Linux world.

C. DRM. I need to say no more. When we buy a DVD, it's ours. We can do with it as we please. You can bet that no Hollywood studio will jump on this unless there some kind of draconian, Circuit-City-Divx-Like DRM scheme attached to it.

D. Netflix. The real DVD as close as my mailbox, and I can keep it as long as I want with no draconian DRM telling me how long I can have it.

E. Extras. No DVD extras; no subtitles; no chapters; nothing of the sort -- unless we're allowed to download the entire .VOB structure, and you know that's NOT going to happen.

Just give it up on VOD. As long as NetFlix is around and studios keep giving DVD the value-add that customers demand, there is no real justification for VOD.
Posted by JLBer (100 comments )
Reply Link Flag
Netflix a good option, not solution
But there are many of us that don't want to wait 3+ days (depending on where you live) for our DVDs to get here. And then I don't feel like paying a monthly fee and end up canceling after a month because I've watched all the new releases out. Also I don't feel like driving all the way to the nearest video place to pick up the latest DVD as the special features aren't really what people get the movie for in the first place.

I currently use Movielink.com every now and then when they have what I want and within minutes I'm watching the movie. I've got 30 days, if I remember correctly, to decide when I want to start watching it and then 24 hours to watch it as many times as I want after I start watching it.

That's not a bad deal considering the time and gas you'd spend running to the rental place if you can't wait on netflix.

The main idea behind VOD is to give those out their currently downloading the movies illegal off of P2P another choice to pay for the movie instead.

If someone came out with an iTunes except for movies, except with some way to control so you can only burn 1 DVD copy, then I think it'd take off pretty well. While this doesn't satisfy everyone it does fill a hole in the market that would earn them money from people that wouldn't have normally paid for the movie in any form in the first place.

My 2 cents.
Posted by Stork1 (20 comments )
Link Flag
Divx works now, WMV doesn't
As an owner of the AVeL Linkplayer2 which is linked into my home network I have been able to rent a few Divx titles from Greencine and play them on my 53" HD set. BTW, these were OAR. Where Greencine falls down is they still haven't implemented the icons that DivX suggests to tell me which titles play on my Linkplayer. A couple of rentals would only play on my computer. I would use their services more often if I knew for sure the download would work on my player.

OTOH, the Linkplayer2 also handles Windows Media Connect yet I don't know of any user who has been able to watch a movie in WMV format with the player because of Microsoft tying themselves into draconian knots over DRM.

VOD is great for the small independent film-maker who is not going to get the marketing and distribution to get his film into theaters and DVD on the shelves of major stores. Portals for VOD based on the same model as shareware portals are already appearing. www.cinemaonweb.com is one such example. Comcast just added PalmVOD with an excellent selection of foreign and independent films to their free OnDemand lineup.

I think VOD is eventually going to replace cable channels and paying subscription fees for programming you never watch. Though the cable channel providers may scream initially they'll will eventually realize that VOD is less risky than providing content for a cable network.
Posted by (9 comments )
Link Flag
no DRM on DVD's???
where you buying your dvd's at???

last time I checked there was macrovision, css, structure protection etc....

unless you meant that you have a way to BYPASS THAT form of CP and as of yet cannot do so with the VOD forms of CP....in which case just give it time and enough popularity for the inclination to arise...
Posted by The user with no name (259 comments )
Link Flag
Why VOD just won't cut it
A. Full-frame. I can just about guarantee that most VOD products would be full frame to cater to the anti-widescreen crowd, thus alienating those who respect the filmmakers' vision. Show the movie in its CORRECT aspect ratio, or don't show it at all. Those who support the filmmakers' choices for aspect ratio - and there are more of us than people will care to admit - will wait for the widescreen DVD so that we can see the movie as it is supposed to be shown. (This of course assumes that the movies in question are meant to be in widescreen. Duh.)

B. Video quality. DIVX is the only way to go. But you can bet that Microsoft will have something to say about that, so DIVX probably will not be the choice. It will probably be WM9, thus alienating Linux and Mac users. That's not a lot, compared to Windows users, but the numbers are growing, particularly in the Linux world.

C. DRM. I need to say no more. When we buy a DVD, it's ours. We can do with it as we please. You can bet that no Hollywood studio will jump on this unless there some kind of draconian, Circuit-City-Divx-Like DRM scheme attached to it.

D. Netflix. The real DVD as close as my mailbox, and I can keep it as long as I want with no draconian DRM telling me how long I can have it.

E. Extras. No DVD extras; no subtitles; no chapters; nothing of the sort -- unless we're allowed to download the entire .VOB structure, and you know that's NOT going to happen.

Just give it up on VOD. As long as NetFlix is around and studios keep giving DVD the value-add that customers demand, there is no real justification for VOD.
Posted by JLBer (100 comments )
Reply Link Flag
Netflix a good option, not solution
But there are many of us that don't want to wait 3+ days (depending on where you live) for our DVDs to get here. And then I don't feel like paying a monthly fee and end up canceling after a month because I've watched all the new releases out. Also I don't feel like driving all the way to the nearest video place to pick up the latest DVD as the special features aren't really what people get the movie for in the first place.

I currently use Movielink.com every now and then when they have what I want and within minutes I'm watching the movie. I've got 30 days, if I remember correctly, to decide when I want to start watching it and then 24 hours to watch it as many times as I want after I start watching it.

That's not a bad deal considering the time and gas you'd spend running to the rental place if you can't wait on netflix.

The main idea behind VOD is to give those out their currently downloading the movies illegal off of P2P another choice to pay for the movie instead.

If someone came out with an iTunes except for movies, except with some way to control so you can only burn 1 DVD copy, then I think it'd take off pretty well. While this doesn't satisfy everyone it does fill a hole in the market that would earn them money from people that wouldn't have normally paid for the movie in any form in the first place.

My 2 cents.
Posted by Stork1 (20 comments )
Link Flag
Divx works now, WMV doesn't
As an owner of the AVeL Linkplayer2 which is linked into my home network I have been able to rent a few Divx titles from Greencine and play them on my 53" HD set. BTW, these were OAR. Where Greencine falls down is they still haven't implemented the icons that DivX suggests to tell me which titles play on my Linkplayer. A couple of rentals would only play on my computer. I would use their services more often if I knew for sure the download would work on my player.

OTOH, the Linkplayer2 also handles Windows Media Connect yet I don't know of any user who has been able to watch a movie in WMV format with the player because of Microsoft tying themselves into draconian knots over DRM.

VOD is great for the small independent film-maker who is not going to get the marketing and distribution to get his film into theaters and DVD on the shelves of major stores. Portals for VOD based on the same model as shareware portals are already appearing. www.cinemaonweb.com is one such example. Comcast just added PalmVOD with an excellent selection of foreign and independent films to their free OnDemand lineup.

I think VOD is eventually going to replace cable channels and paying subscription fees for programming you never watch. Though the cable channel providers may scream initially they'll will eventually realize that VOD is less risky than providing content for a cable network.
Posted by (9 comments )
Link Flag
no DRM on DVD's???
where you buying your dvd's at???

last time I checked there was macrovision, css, structure protection etc....

unless you meant that you have a way to BYPASS THAT form of CP and as of yet cannot do so with the VOD forms of CP....in which case just give it time and enough popularity for the inclination to arise...
Posted by The user with no name (259 comments )
Link Flag
Still not practical
It's still easier and quicker to goto your local block buster etc and rent the DVD or even subscribe to Netflix. In it's current form the videos take hours to download and the quality isn't really all that great, at least if current examples like Movielink and CinemaNow are any indication. Until the average broadband user start seeing Internet2 quanities of bandwidth were download a couple of gigabytes may take several minutes these services will remain a niche market. Also these could be made more attractive by offering comparable rental prices and lengths as stores like Blockbuster.
Posted by unknown unknown (1951 comments )
Reply Link Flag
One more thing
I am not to keen on having to watch the movies on my computer. I rather watch them on a home theater system than my computer.
Posted by unknown unknown (1951 comments )
Link Flag
Still not practical
It's still easier and quicker to goto your local block buster etc and rent the DVD or even subscribe to Netflix. In it's current form the videos take hours to download and the quality isn't really all that great, at least if current examples like Movielink and CinemaNow are any indication. Until the average broadband user start seeing Internet2 quanities of bandwidth were download a couple of gigabytes may take several minutes these services will remain a niche market. Also these could be made more attractive by offering comparable rental prices and lengths as stores like Blockbuster.
Posted by unknown unknown (1951 comments )
Reply Link Flag
One more thing
I am not to keen on having to watch the movies on my computer. I rather watch them on a home theater system than my computer.
Posted by unknown unknown (1951 comments )
Link Flag
Disgusted with the studios
This is really disappointing. You would think that after the music industry's mistakes, that Hollywood would be proactive in embracing web technologies and clearly see that offering online downloads is the way of the future (I hope I don't need to explain why - please see iTunes example).

Let's consider an analogous situation... is iTunes cannabilising CD sales? If so, is it a good thing? That is the important question.

Cannabilisation of sales is not always a bad if it means that in the long term, you open a new source of revenue that grows into something much larger than your existing sources. They must be stupid if they don't see that the web-delivery of their products facilitates a whole new and exciting way of doing business - volume sales, movies on demand/at your fingertips etc.

Get out of your conservative, uninnovative rut, Mr Movie Studio, and get with the times. If you don't start now, you'll lose out later. Just look at the mess the music industry is in. Learn from their mistakes.

*shakes head*
Posted by (2 comments )
Reply Link Flag
Disgusted with the studios
This is really disappointing. You would think that after the music industry's mistakes, that Hollywood would be proactive in embracing web technologies and clearly see that offering online downloads is the way of the future (I hope I don't need to explain why - please see iTunes example).

Let's consider an analogous situation... is iTunes cannabilising CD sales? If so, is it a good thing? That is the important question.

Cannabilisation of sales is not always a bad if it means that in the long term, you open a new source of revenue that grows into something much larger than your existing sources. They must be stupid if they don't see that the web-delivery of their products facilitates a whole new and exciting way of doing business - volume sales, movies on demand/at your fingertips etc.

Get out of your conservative, uninnovative rut, Mr Movie Studio, and get with the times. If you don't start now, you'll lose out later. Just look at the mess the music industry is in. Learn from their mistakes.

*shakes head*
Posted by (2 comments )
Reply Link Flag
VOD not too bad
I dont think VOD isnt too bad or too good an idea as long as it stays an option, one needs to look at some of the services like edgestream <a class="jive-link-external" href="http://www.edgestream.com/corp/demos.htm" target="_newWindow">http://www.edgestream.com/corp/demos.htm</a>
they claim dvd quality streaming video, which i think its close to what they claim.

I have also noticed that Atomfilms HD <a class="jive-link-external" href="http://www.atomfilms.com/af/spotlight/collections/hidef/" target="_newWindow">http://www.atomfilms.com/af/spotlight/collections/hidef/</a>
has really great hi def short flicks although not block buster movies just the quality of the video is great on the true HD media there.

I think there is something of a trade off, with dvd i can watch the movie when and were i want, but vod you can watch it only so many times in a set time limit before you have to buy it again aka ala online pay per view.. but if im paying for a pay per view then my dishnetwork dish is the route im going to take because i can save it on dvr and watch it when i want to.
Posted by (71 comments )
Reply Link Flag
until/unless broadcast flag
and then your dvr will have to recognize the flag and either NOT let you record it for later use whenever YOU want but will have to comply with the Content Providers wishes of how long and how often it will LET you watch it.. under those draconian terms the playing field is even.

And this is just another reason you all need to join Eff.org and start telling your legislatures NO on ANY broadcast flag!
Posted by The user with no name (259 comments )
Link Flag
VOD not too bad
I dont think VOD isnt too bad or too good an idea as long as it stays an option, one needs to look at some of the services like edgestream <a class="jive-link-external" href="http://www.edgestream.com/corp/demos.htm" target="_newWindow">http://www.edgestream.com/corp/demos.htm</a>
they claim dvd quality streaming video, which i think its close to what they claim.

I have also noticed that Atomfilms HD <a class="jive-link-external" href="http://www.atomfilms.com/af/spotlight/collections/hidef/" target="_newWindow">http://www.atomfilms.com/af/spotlight/collections/hidef/</a>
has really great hi def short flicks although not block buster movies just the quality of the video is great on the true HD media there.

I think there is something of a trade off, with dvd i can watch the movie when and were i want, but vod you can watch it only so many times in a set time limit before you have to buy it again aka ala online pay per view.. but if im paying for a pay per view then my dishnetwork dish is the route im going to take because i can save it on dvr and watch it when i want to.
Posted by (71 comments )
Reply Link Flag
until/unless broadcast flag
and then your dvr will have to recognize the flag and either NOT let you record it for later use whenever YOU want but will have to comply with the Content Providers wishes of how long and how often it will LET you watch it.. under those draconian terms the playing field is even.

And this is just another reason you all need to join Eff.org and start telling your legislatures NO on ANY broadcast flag!
Posted by The user with no name (259 comments )
Link Flag
Do the math
There is a huge technical leap between reasonably delivering
songs or "CDs", with per song file sizes of between 4-50 MB
depending on play length and compression format and
reasonably delivering full length, full resolution video with file
sizes of up to 4.8 GB.

Assuming the same wires, people think it is really cool to be able
to decide to purchase a "CD"'s worth of songs and download
them within minutes. If they try to do the same thing with the
movies that are a 100 to 1000 times as many Bytes, the
experience is far less desireable. I am willing to tie up my high
speed connection for a 4 minute download; I refuse to do so for
a download of 400 minutes - I can drive to the store and pick up
half a dozen DVD's in about 20 minutes.

Optical disk storage capacity is increasing far more rapidly than
is Internet bandwidth to consumers. I do not forsee any time in
the near future when electronic delivery will provide a better,
more cost effective experience than physical delivery of of that
permanent media.
Posted by Rod Adams (74 comments )
Reply Link Flag
Do the math
There is a huge technical leap between reasonably delivering
songs or "CDs", with per song file sizes of between 4-50 MB
depending on play length and compression format and
reasonably delivering full length, full resolution video with file
sizes of up to 4.8 GB.

Assuming the same wires, people think it is really cool to be able
to decide to purchase a "CD"'s worth of songs and download
them within minutes. If they try to do the same thing with the
movies that are a 100 to 1000 times as many Bytes, the
experience is far less desireable. I am willing to tie up my high
speed connection for a 4 minute download; I refuse to do so for
a download of 400 minutes - I can drive to the store and pick up
half a dozen DVD's in about 20 minutes.

Optical disk storage capacity is increasing far more rapidly than
is Internet bandwidth to consumers. I do not forsee any time in
the near future when electronic delivery will provide a better,
more cost effective experience than physical delivery of of that
permanent media.
Posted by Rod Adams (74 comments )
Reply Link Flag
 

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