MOVIES ON DEMAND – DIGITAL T$UNAMI IGNORED?
Burning your own high quality DVD of movies downloaded via broadband is now a
legal, technical and commercial reality but Hollywood is still in a state of
denial – as was the music industry for too long; to beat movie piracy, a low
cost legal alternative would help –simultaneously providing a viable new
distribution outlet for Australian (and other independent) producers as well as
Hollywood, reports Andrew L. Urban.
The sound of the approaching digital tsunami called Movie Downloads has just got
a lot louder, with CinemaNow and Movielink, two large, US based online movie
rental businesses, each launching a service enabling users to download movies
and burn them to a DVD for playback on any regular or portable DVD player. Until
now, legal, high quality movie downloads have been limited to rental and to
storage on a computer hard drive.
Both operators are using technology from US software developer Sonic Solutions,
but Seattle, Washington, based LightningDVD is also close to launching such
technology; an Amazon-run movie download service is imminent; Apple is looking
to replicate iTunes with a movie service … as ‘movies on demand’ become a
technological - and commercial - reality.
“Sonic Solutions and LightningDVD make it possible for any website which
licences their technology to offer films for the public to download and burn to
DVD without having the technology themselves,” says Canadian digital media
consultant Margo Langford, who will be a guest speaker on the subject of digital
movie distribution, at this year’s Screen Producers Association conference in
November at the Gold Coast. “Consumers will now expect to have the flexibility
to stream and watch films in real time, to download to view the film on the
computer later, or to burn a protected DVD copy to preserve and play anytime,
anywhere.” In other words, the expectation created by the enabling technology
will generate demand from the market.
"generating new revenues"
But just as the music industry was for too long in denial about online music
access in vast numbers until it was too late, the film industry seems about to
make the same mistake. Ignoring the digital tsunami that the combination of
digitisation and broadband is unleashing, most of the industry is either
clinging to a rigid old distribution mindset or adapting too slowly to the new
realities. For now, the studios see digital movie downloads-to-own as generating
new revenues from old titles: for example, CinemaNow is starting by first
offering only 100 older films, such as Charlie's Angels: Full Throttle (2003)
and Scent of a Woman (1992).
On the one hand, Hollywood claims to have lost about $250 billion (that’s
billion) worth of movie revenue to online theft last year, partly thanks to the
many well organised pirate operators, illegal downloading and file sharing
sites, as well as the plethora of BitTorrent sites that cater for the cool
generations. Just about any movie or tv show you may want is as easy to find as
typing the title in the search field.
On the other hand, Hollywood (meaning the entire film industry) is moving very
slowly to make legal versions of its huge catalogues available online; witness
CinemaNow’s paltry 100 titles. It’s hardly their preference to limit their movie
list: it’s all they can get the rights to.
"I worry that Hollywood's legitimate concern to protect the copyright in its
films is seriously limiting their legal online distribution and providing a free
kick to illegal downloads,” says Justin Milne, Group Managing Director of
Telstra BigPond, which operates Australia’s first and so far only (legal) movie
download service, launched in March 2006. Trying to control distribution like
that is, of course, pointless, as the illegal market demonstrates, so it would
be smarter to join them (the digital distributors) rather than try and beat
them, he says.
Broadband penetration in Australia is now around 25%, but the downloading of
movies via broadband is still nascent, as Milne points out, and while he can’t
reveal statistics, he says “it has already exceeded our business plan. Like
music and games, it’s slow to start but is building. Having a bigger catalogue
will help boost the growth.” Several other US based sites already offer movie
downloads, some even with DVD burning optional extras, and generally claim
downloads in the millions. At one such site, Pirates of the Caribbean Dead Man’s
Chest is No 1 with over three million copies downloaded.
Milne says the emergence of legally controlled download-to-burn technology is
encouraging “although there is still some distance to travel before ‘download to
own’ and ‘download to burn’ become well accepted by the studios. We're ready to
trial it when they are.” For now, BigPond Movies offer rental only.
Milne says he'd acquire download rights to just about every Australian film ever
produced "in a heartbeat" if negotiating the rights were simpler (instead of
having to deal one by one). This underlines the difference between old world
distributors and digital distributors: in the online world, the more choice you
offer your customers, the more they like it, making everyone a winner, from the
producers to the distributors to the customers.
"an exceptionally efficient way to sell films
Of course, the old fashioned system will stay in place and will work some of
the time for some of the films, but download-to-burn is an exceptionally
efficient way to sell films globally, with minimum overhead costs.
Prices reflect that. CinemaNow prices per title to download-and-burn start at
US$8.99 (approx. A$11.99); BigPond Movies rents films (including shorts plus tv
programs) at rates from A$2.95 to A$5.95 (with 20% discount for BigPond
members), for rental periods ranging from 24 hours to 7 days. Clearly, these
prices will shift as the market finds the price points at which consumers will
respond. The major factors will be choice, convenience and audio visual quality.
“The film industry has to cross the Rubicon of The Long Tail,” says Milne,
referring to the famous article in Wired.com almost two years ago that defined
the fundamental difference between sales in the digital/online world and the
real world. “People behave differently in the online world: in the video store
they want to sell the latest releases; they have limited space and the attention
span of customers is also limited. To find previously released movies takes time
and effort. This is not true on the internet; the entire catalogue is equally
accessible. In the real world, recent releases make up 80% of sales, and the
rest account for 20%. But online, these figures are reversed. That’s exactly
what happened in music …”
(This article also appears in The Bulletin, on sale August 3, 2006.)
Published August 3, 2006
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Charlie’s Angels: Full Throttle – now available legally to download and burn to DVD for under A$12
Orange Love Story – in February 2005 became the first Australian feature film
available to download and own, for just US$5.99 (approx A$7.88) at Cinefest (part of Aussie section curated by Urban Cinefile's Andrew L. Urban)
Telstra BigPond Group GM Justin Milne – would take every Australian film “in a heartbeat”
Pirates of the Caribbean – was No 1 pirated movie online, the week of its theatrical release