Video Beat the Radio Star

While the music industry has reluctantly crept toward technology, Hollywood is sprinting to online distribution

Someday, I'd like to be able to download a real CD, with a high bitrate, high-quality mastering, and an album cover. Instead, I get dinky, flat-sounding MP3 files. But I can already download DVDs that can be burned to discs that run in a living room player, complete with menus, extra features, and cover art.

The process has been slow, but has steadily gained momentum. In late 2005, EZTakes began offering downloads of public-domain films – the only content they were able to get back then. The service has gradually expanded to offer some rather obscure indie material, exercise videos, horror flicks, and even a few winners of film awards. Those are international awards, of course, not Oscars. The big

Hollywood studios haven’t signed on with EZTakes. But they are starting a download experiment with CinemaNow. In addition to the few hundred films for download to PCs, CinemaNow offers a few hundred movies that can be burned to DVD.

It started in May with films from Vivid Entertainment -- a purveyor of high-grade pornography. But as history shows us: Where porn goes, mainstream media soon follows. In July, CinemaNow started offering mainstream titles – about 100 movies and music videos.

It's fitting that pornography is leading the DVD download business, just as it lead the adoption of the original DVDs, their predecessor video cassettes, and the whole "home theater" movement. Porn is just one of the forces pushing video online at an unexpected rate -- and far faster than music has made the transition.

In the era of iTunes, it may be hard to remember how lethargic the music industry has been to embrace the Internet. But it's been roughly ten years from the emergence of MP3 Internet trading to the Beatle's announcement that they were finally preparing their music for online distribution. And that news came during their latest, and ill-fated, lawsuit against Apple Computer. (We're still waiting for AC/DC and Led Zeppelin to go online.) 

In comparison, the video business is streaming ahead. While burn-to-DVD titles are rare, PC-based downloads are abundant. In addition to its hefty porn collection, CinemaNow offers a good chunk of new mainstream releases. Could the quality be better? Sure, but that's true of online music as well. Are the prices reasonable? No. $19.95 is excessive for occasionally fuzzy video that is tethered to your laptop. "I would prefer to offer it cheaper," said Cinema Now's president, Bruce Eisen, whose pricing structure is dictated by the studios. Eisen is gunning for $10 per download, as is the 800-pound gorilla of online media, Steve Jobs.

Assuming historical precedent holds, Jobs will probably get his way. But even without Apple, online video will continue to explode because so many other companies are pushing it. The legal music download business is dominated by a mere two players: iTunes with about 61 percent of the market, and eMusic -- a distributor of mostly indie titles with about 12 percent. 

Providers of online video, in comparison, are legion. CinemaNow competes with two virtual alter-egos: MovieLink and Vongo. Google and Yahoo offer vast archives of footage, as do the until-recently-unknown companies YouTube, Revver, and Grouper. Plus new players keep popping out of obscurity. In June, a Usenet archive with the not-so-catchy name GUBA began offering top-tier current films and campy old TV shows from the Warner Brothers archive. In July, GUBA signed on Sony. And while iTunes doesn't provide movies yet, its half-year-old collection of TV programs is already overwhelming. I've watched entire seasons of Battlestar Galactica exclusively on my laptop.

Unlike songs -- which can be played dozens of times per week on traditional, satellite, and Internet radio stations -- TV episodes are limited to a prime-time debut and occasional runs in syndication. A decade ago, if you missed a song on the radio, you knew you would hear it again soon. Or you could buy the CD, tape, or LP. But if you missed a show on TV, you didn't know when, if ever, you could catch it again. 

That wasn't just bad news for viewers, but for the networks, too. They were sitting on huge archives of valuable content, with limited ways to make money from it. So reviving old shows on the Internet represents almost pure gain for them.

And unlike movie studios, TV networks aren't worried about "cannibalizing" DVD sales. Getting a series onto DVD is a slow process -- about a season or two behind the broadcast airing. That hurts viewership, because it's impossible for new viewers to catch up. (TiVo helps. But what if you first become interested in recording a show two seasons after it debuted?) If you make episodes available online shortly after they hit the TV, people can join in at any time and become dedicated fans. That's a lot different from music. Bands don't (yet) issue a song every week or two, stretching an album over several months. Nothing appears until the entire CD is ready. It's the exact opposite with DVD collections of TV shows.

Networks can even give the video away, because they can embed advertising. People are well used to commercial breaks in TV shows, but they wouldn't tolerate a message from the sponsor in the middle of a song. And unlike record studios, networks are producing new content just for the Internet. MTV Overdrive, for example, airs online "aftershows" that provide context and backstory to its broadcast programs like Laguna Beach.

Television networks are a lot different from recording studios. Both produce media, but networks are also responsible for broadcasting it. In the past they have used radio waves, cable, and satellite. Now they are adding Internet Protocol.

"Hollywood is definitely moving faster" than the music business, said Jeremy Allaire, whose company Brightcove develops the Internet video distribution systems for TV channels such as MTV and The Discovery Channe "They are launching new businesses left and right, building direct digital channels with their TV networks, and doing digital media licensing deals all over the planet." 

  In some cases, Hollywood is pushing harder than the technology and legal constraints will allow. I spent days trying to download one of the Vivid Entertainment DVD files. First my PC's security software blocked the download. Later, I was able to retrieve it, but the digital license required to make the file play wasn't delivered. So I had to start over again. And quality is not quite as good as that on a regular DVD, but it is close.

Licensing is also a roadblock. Rights for most movies and TV shows were negotiated long before the Internet, and renegotiating for online distribution is tedious. One of the stickiest matters, in fact, is securing the rights to music used in programs. But many other players are also involved -- far more than for a typical song. "We've had a bunch of meetings where you see a ton of excitement from the studios," said Rob Bennett, the general manager of entertainment and video for MSN. "Then the needle gets scratched across the record when someone says 'What about the Director's Guild? What about the Actor's Guild?'"

Despite these glitches, online video is quickly moving forward. New licensing deals for movies and TV shows are incorporating Internet rights. And while  Hollywood players are still frustratingly cautious on some matters, they recognize that they can't keep their content off the Internet, so they might as well play an active roll in getting it online. In this matter they owe a huge debt to the recording studios, which clearly showed them how not to react to a new technology.

Comments

[Matt]

One service you didnt mention is Greencine who offers DivX Movies for Purchase and Rent, they have a Burn to Rent and Burn to Own services that will play on DivX certified DVD players of which there are many from manufactures like Sony.

http://www.greencine.com/static/divx/divxdrm_faq.jsp