Hollywood Studios Form Venture to Distribute Movies Over the Internet encrypted by Intertrust
By Laura Rich
First, the film industry agreed to allow for the distribution of movies over the Internet. Second, five of the major studios banded together to support the effort.
Sony Pictures, Paramount Pictures, Universal Studios, Warner Bros. and Metro-Goldwyn-Mayer said they have formed a joint venture to deliver new releases and archival material to consumers over broadband connections. The new company, as yet unnamed, is an outgrowth of MovieFly, Sony's working title for a video-on-demand service it was developing.
"This is a pretty powerful statement that Hollywood believes in the Internet," says Yair Landau, president of Sony Pictures Digital Entertainment, which has been building the technology behind the service for at least the past year.
A name for the new company has to be determined and a CEO selected before the company unveils further specifics about the service. But Landau and executives at the other studios involved expect it will "be like going to a video store," said Landau.
The service will offer movies for downloading and viewing within a restricted time period. Each studio will determine which movies will be available at what price, but most are expected to make new releases available over the service during the regular video-on-demand window, which falls about 45 days after they're available on home video. Landau expects movies will take no more than 40 minutes to download. Consumers would receive them through their computers over software from Real Networks and Microsoft, and the movies would be encrypted by technology from InterTrust.
Rumors of a service backed by several studios have circulated since last year. Sony executives had acknowledged talks with Warner Bros. Meanwhile, Disney, which has been developing its own service over Movies.com, is believed to have aligned with Twentieth Century Fox. But five studios backing a single service will make it tougher for others to compete.
Not that this is an exclusive service. All of the studios involved are free to distribute their movies to any outlets and are not bound to grant any special considerations to this service.
Jon Taplin, CEO of cable-based video-on-demand service Intertainer, expects the service may speed the development of video-on-demand by all of the studios. "We understand that early next year we may have some competition, but studios throwing big money at [Internet] delivery socializes the concept," he said. Intertainer distributes movies from Universal, Sony and most of the major studios.
Studio executives also said that the popularity of Napster was a motivation behind the joint venture. "At the time Napster developed, there was no legitimate option for consumers to download or stream music. We think having a business where consumers can go and pay for content will minimize piracy," said David Bishop, president and CEO of MGM Home Entertainment Group.
Napster and its ilk have inspired many new joint ventures in the music and movie business, including the online music services Pressplay and Duet. Now, they all just have to prove they can all get along. The joke in Hollywood has always been that it's hard enough to get two studio heads to agree on where to go to lunch. Maybe times are changing.
uk.news.yahoo.com |
