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By RICK LYMAN
LOS ANGELES, Aug. 16 — Five major movie studios, including some of Hollywood's top players, unveiled plans today for a joint venture that would allow computer users to download rental copies of feature films over the Internet.
The service, which will be available only to those with high-speed Internet connections, is an attempt to get ahead of piracy problems that have plagued the music industry through services like Napster and which were beginning to be felt in the film industry with newer file-swapping services.
"I think the majority of consumers believe that copyright has value and that if they have a pay vehicle to watch movies on the Internet, they will pay for it," said Yair Landau, president of Sony (news/quote) Pictures Digital Entertainment. "We want to give honest people an honest alternative."
The venture is also seen by many studio executives as a first step toward true video-on-demand, when consumers will be able to watch any movie they want, whenever they want. Initially, the films will be available for download only onto personal computers, or television monitors linked to an Internet connection, but eventually video-on-demand service is expected to include cable television and other delivery systems.
"I think anybody who is in the movie business wants to reach the day when you can watch any movie you want, any time you want," Mr. Landau said. "I personally believe that launching an Internet service like this is a necessary first step in that regard."
The studios that will be partners in the service are MGM, Paramount Pictures, Sony Pictures, Warner Brothers and Universal Pictures. Noticeably absent were Disney and 20th Century Fox, although sources close to Disney said that it intended to announce its own video-on-demand service within 10 days. Fox issued a statement late this afternoon saying that it, too, would announce plans soon for such a service.
Executives at Sony's Moviefly, an Internet movies-on-demand effort that will provide the technical backbone for the venture, had been saying since early this year that they intended to go online as soon as they could.
They delayed the move, the executives said, in hopes of persuading as many Hollywood studios as possible to join the effort, a process that took longer than expected as each studio brought its concerns about pricing, security and competition with other outlets like cable television.
"It's very expensive to create something like this, so economics plays a role in bringing so many studios together," said Jack Waterman, president of worldwide pay television for the Paramount Television Group. "And this allows a lot of companies to come together to create a common viewpoint on the technology and security behind the system."
In the coming months, a chief executive will be hired for the new venture, which will have an equal number of representatives from each studio on its board; a name will be chosen; and the site will be tested extensively to make sure its security system works as promised. Then, the first 100 or so films, a mix of recent releases and films from studio libraries, will become available, either late this year or early next.
The selection of films, and how much it will cost to download them, will be left to the individual studios. Studios that are not part of the venture will also be allowed to post films on the site.
The average feature film is about 500 megabytes in digitized form and will take 20 minutes to 40 minutes to download, Mr. Landau said, depending on the type of broadband connection. Download times would be untenable for those with slower Internet connections. Studio officials estimate that there are 10 million households with broadband connections, a number they expect to increase significantly, as well as 35 million screens in offices and colleges.
A film will remain on a computer's hard drive for 30 days but will erase itself 24 hours after it is first run. In that 24 hours, consumers will be able to watch the film as many times as they wish — pause, fast forward and perform other functions typical of a videocassette or DVD.
Studios traditionally release movies in a series of so-called windows, starting with theatrical release, followed by videocassette, DVD, pay- per-view, pay-cable networks and, eventually, broadcast networks. Executives at several studios said films would be released on this new system, initially at least, only when they entered their pay-per-view window, usually months after the theatrical release. The rental cost will be about the same as a pay-per-view film, the executives said.
"We are not looking to undermine DVD, which is a great business," Mr. Landau said.
The new venture will be neither the first video-on-demand service (cable operators in a few markets have offered such a service to some customers, though the movie selection has been limited) nor the first time that feature films have been available for download on the Internet (companies like CinemaNow and SightSound Technologies have offered a limited roster of films for download). But it is the first effort involving Hollywood studios and offers the promise of thousands of potential films.
"This announcement confirms that film producers are eager for the Internet to enlarge and flourish," said Jack Valenti, president of the Motion Picture Association of America. "For the first time, in the very near future, a broad selection of motion pictures will be available online, protected by encryption, and delivered directly to consumers at a reasonable price."
In general, the studios have been hesitant to allow the distribution of digital copies of their films on the Internet, fearing they would be too easy to copy and share through unauthorized sites. What has made studio executives agree to this venture has been a growing confidence that the necessary security is in place to prevent copying of the downloaded files.
However, since almost all film pirating has involved the latest releases and this service will make movies available only months later, it is unclear what effect it would have on illegal copying.
"That remains to be seen," said Ric Dube, an analyst for Webnoize, a research company that focuses on digital entertainment industries.
"What this does is to compete with piracy more effectively than the movie industry has in the past," Mr. Dube said. "And the real issue isn't whether it will affect piracy, but whether the movie industry is willing to tolerate the amount of piracy that's going on in order to grow their market."
The music industry, which shares parentage with many of the studios involved in today's announcement, has also fought against file-sharing sites like Napster, and had a harder time because of the relative ease of downloading a piece of music.
But movie studios have also been faced with file-sharing sites like Aimster, which allows swapping of both audio and video files.
"The film industry does have a better history of coming through on plans like this than does the music industry," Mr. Dube said. "So when five major film companies say they will use an online channel to distribute their films, that means a lot more than a similar statement coming from five music companies."
The real question, though, is how many people really want to download movies onto their personal computers.
"To be really honest, we have no idea," Mr. Waterman said.
Ok if you have a HTPC and it better be OAR :W
Bing
LOS ANGELES, Aug. 16 — Five major movie studios, including some of Hollywood's top players, unveiled plans today for a joint venture that would allow computer users to download rental copies of feature films over the Internet.
The service, which will be available only to those with high-speed Internet connections, is an attempt to get ahead of piracy problems that have plagued the music industry through services like Napster and which were beginning to be felt in the film industry with newer file-swapping services.
"I think the majority of consumers believe that copyright has value and that if they have a pay vehicle to watch movies on the Internet, they will pay for it," said Yair Landau, president of Sony (news/quote) Pictures Digital Entertainment. "We want to give honest people an honest alternative."
The venture is also seen by many studio executives as a first step toward true video-on-demand, when consumers will be able to watch any movie they want, whenever they want. Initially, the films will be available for download only onto personal computers, or television monitors linked to an Internet connection, but eventually video-on-demand service is expected to include cable television and other delivery systems.
"I think anybody who is in the movie business wants to reach the day when you can watch any movie you want, any time you want," Mr. Landau said. "I personally believe that launching an Internet service like this is a necessary first step in that regard."
The studios that will be partners in the service are MGM, Paramount Pictures, Sony Pictures, Warner Brothers and Universal Pictures. Noticeably absent were Disney and 20th Century Fox, although sources close to Disney said that it intended to announce its own video-on-demand service within 10 days. Fox issued a statement late this afternoon saying that it, too, would announce plans soon for such a service.
Executives at Sony's Moviefly, an Internet movies-on-demand effort that will provide the technical backbone for the venture, had been saying since early this year that they intended to go online as soon as they could.
They delayed the move, the executives said, in hopes of persuading as many Hollywood studios as possible to join the effort, a process that took longer than expected as each studio brought its concerns about pricing, security and competition with other outlets like cable television.
"It's very expensive to create something like this, so economics plays a role in bringing so many studios together," said Jack Waterman, president of worldwide pay television for the Paramount Television Group. "And this allows a lot of companies to come together to create a common viewpoint on the technology and security behind the system."
In the coming months, a chief executive will be hired for the new venture, which will have an equal number of representatives from each studio on its board; a name will be chosen; and the site will be tested extensively to make sure its security system works as promised. Then, the first 100 or so films, a mix of recent releases and films from studio libraries, will become available, either late this year or early next.
The selection of films, and how much it will cost to download them, will be left to the individual studios. Studios that are not part of the venture will also be allowed to post films on the site.
The average feature film is about 500 megabytes in digitized form and will take 20 minutes to 40 minutes to download, Mr. Landau said, depending on the type of broadband connection. Download times would be untenable for those with slower Internet connections. Studio officials estimate that there are 10 million households with broadband connections, a number they expect to increase significantly, as well as 35 million screens in offices and colleges.
A film will remain on a computer's hard drive for 30 days but will erase itself 24 hours after it is first run. In that 24 hours, consumers will be able to watch the film as many times as they wish — pause, fast forward and perform other functions typical of a videocassette or DVD.
Studios traditionally release movies in a series of so-called windows, starting with theatrical release, followed by videocassette, DVD, pay- per-view, pay-cable networks and, eventually, broadcast networks. Executives at several studios said films would be released on this new system, initially at least, only when they entered their pay-per-view window, usually months after the theatrical release. The rental cost will be about the same as a pay-per-view film, the executives said.
"We are not looking to undermine DVD, which is a great business," Mr. Landau said.
The new venture will be neither the first video-on-demand service (cable operators in a few markets have offered such a service to some customers, though the movie selection has been limited) nor the first time that feature films have been available for download on the Internet (companies like CinemaNow and SightSound Technologies have offered a limited roster of films for download). But it is the first effort involving Hollywood studios and offers the promise of thousands of potential films.
"This announcement confirms that film producers are eager for the Internet to enlarge and flourish," said Jack Valenti, president of the Motion Picture Association of America. "For the first time, in the very near future, a broad selection of motion pictures will be available online, protected by encryption, and delivered directly to consumers at a reasonable price."
In general, the studios have been hesitant to allow the distribution of digital copies of their films on the Internet, fearing they would be too easy to copy and share through unauthorized sites. What has made studio executives agree to this venture has been a growing confidence that the necessary security is in place to prevent copying of the downloaded files.
However, since almost all film pirating has involved the latest releases and this service will make movies available only months later, it is unclear what effect it would have on illegal copying.
"That remains to be seen," said Ric Dube, an analyst for Webnoize, a research company that focuses on digital entertainment industries.
"What this does is to compete with piracy more effectively than the movie industry has in the past," Mr. Dube said. "And the real issue isn't whether it will affect piracy, but whether the movie industry is willing to tolerate the amount of piracy that's going on in order to grow their market."
The music industry, which shares parentage with many of the studios involved in today's announcement, has also fought against file-sharing sites like Napster, and had a harder time because of the relative ease of downloading a piece of music.
But movie studios have also been faced with file-sharing sites like Aimster, which allows swapping of both audio and video files.
"The film industry does have a better history of coming through on plans like this than does the music industry," Mr. Dube said. "So when five major film companies say they will use an online channel to distribute their films, that means a lot more than a similar statement coming from five music companies."
The real question, though, is how many people really want to download movies onto their personal computers.
"To be really honest, we have no idea," Mr. Waterman said.
Ok if you have a HTPC and it better be OAR :W
Bing
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