Hollywood Targets Online Sales

By Jon Newton 8/08/05

The major studios have suddenly realised what century it is. “After years of avoiding it, Hollywood studios are preparing to let people download and buy electronic copies of movies over the Internet, much as record labels now sell songs.”

Isn’t that nice of it? Of course, that’ll have to be in between all the law suits, enforced web site closures, manipulation of various US and international government economic, trade, enforcement agencies, and so on.

Jon Newton
“The U.S. movie industry has made some previous half-hearted attempts to let people rent a small number of movies online,” says a post in ECT News Network. "But the rapidly growing use of Internet video, both legal and pirated, is prompting it to create more robust download options and to consider online business models it dismissed as recently as a year ago."

Old movies at exorbitant prices

Apparently, "The studios have been working for months to confront the technological and business challenges of digital sales" and "Sony is converting 500 movie titles to a digital format that can be downloaded and sold. Universal Pictures, a unit of NBC Universal, which is 80 percent owned by General Electric and 20 percent owned by Vivendi Universal, is preparing nearly 200 titles for digital online sale. And Warner Brothers, a division of Time Warner, says it has already digitized most of its library of 5,000 films and will start selling some of them online this year."

This means we can confidently expect a bunch of old movies at exorbitant prices with all kinds of financially integrated caveats attached.

"The studios have a strong incentive to make sure they offer consumers legal options," says the story. "The rapid adoption of high-speed Internet connections is making the trading of pirated copies online easier and more widespread."

Actually, it's the literally billions of physical CDs and DVDs - templates, in other words - that keep the 'piracy' trade in such excellent shape. If the movie, music and software industries started looking seriously at p2p and p2p sales and distribution vehicles as their saviors instead of their enemies, they (and their shareholders) would be raking it in and slashing legal, marketing, PR, print, storage, etc, costs.

Keep punching them in the face

But they're labouring under two serious misconceptions:

1 - That they still control what are still known as the 'consumer' bases; and,
2 - That they still control the media.

The Net allows people to communicate freely with each other via blogs, web sites, personal pages, email, IM, and so on. This, combined with the fact that incoming younger generations are demonstrably smarter than the outgoing older ones (who are hanging on like grim death instead of working with those who'll succeed them), is eroding both of the above contentions.

The music, movie and software cartel operational philosophy can be summed up as, 'keep punching them in the face until they see reason'. And with most of the current mainstream print and electronic media (mis)guided directly or indirectly by the same cartels, enthusiastic presentation of the assaults as honest and fair reporting of the 'facts' is assured.

Corporate units still rule on Gogle, Yahoop, and so on. There, it's about money and nothing else. But the lamestream media and world press corpse are no longer the only games in town. As more and more people log on, viewpoints and attitudes contrary to the established corporate way of looking at, and presenting, the 'news' are taking over.

Done nothing, gone nowhere

However, for the moment, heavily distorted press release journalism and cut-and-paste reporting predominate, playing directly into the hands of the cartels and the corporations which own them.

This allows people such as James Ramo, ceo of Movielink, "a downloading service established by five major studios three years ago" and which has done nothing and gone nowhere, to appear not just in one, but in many corporate and non-corporate outlets, as reputable sources.

"It just will be easier and easier to be a legitimate consumer and harder and harder to be a pirate," ECT has him saying.

"Legal video downloads are not expected to take off quickly," continues the story. "It still takes half an hour or longer to download a movie, more than it takes some people to get to a video store and back." That's an argument?

And, "The picture quality on a computer screen is not as good as on a television with a good cable hookup." Wrong. "And there are no easy ways to move movies downloaded from PC to a television set." Wrong again.

On top of that, downloads negate trailer-scam where all the good parts are chopped together into a tasty looking short but the real movie turns out to be total dross. This is especially meaningful when people can use movies downloaded from the p2p networks to sample new releases, allowing them to decide if they want to waste $40 or $50 on an evening at the movies.

'Technology-savvy video buffs

"Still, there is already a growing group of technology-savvy video buffs who are using free file-sharing software like BitTorrent to download pirated programs, especially movies that have not yet been released to DVD or new episodes of TV shows," says the ECT post

However, they don't have to be "technology-savvy video buffs". Anyone with an IQ of more than 15 can use BitTorrent and most of the other free and commercial p2p applications. Nor do they have to be 'buffs'. Ordinary people who've had enough of being led by the nose to be ripped off are equally well qualified.

"Not surprisingly, the videos that people most want to download are those that Hollywood is most shy about making available online."

Again, not even nearly true. People (including parents) can, and do, download a staggering range of digital files, including educational material, documentaries, hard-to-find older movies and music, 'how-to' presentations, and so on.

"Studios do not want to undercut box office receipts and DVD sales for hit movies, and TV networks do not want to put popular shows online, because that might allow more viewers to skip the commercials that pay the freight," says ECT, getting the 'skip the commercials' part right.

"Broadcast, satellite and cable are all good models that provide us the ability to generate revenue for us and are relatively safe from piracy," it has Robert Wright, ceo of NBC Universal, saying, "expressing a view widely held by studio executives."

Translated, that means they own and control the outlets and therefore believe they own and control the users.

Time 'windows'

Meanwhile, the studios will most likely make downloads available to a wide range of online distributors [whom they own and/or control] such as Movielink, MSN, Sony's Connect service, Target.com and CinemaNow, and online movie rental stores [which they own and/or control through product sale and distribution] . Prices, to be set by the retailers [whom they own and/or control directly or indirectly] are expected to be similar to prices for DVDs, generally between $10 and $20.

"The studios have decided that this model could be at least as profitable as DVD sales and, "most important," the selection of films has been "limited by Hollywood's complex method for selling the rights to a movie," adds ECT.

"After a movie appears in theaters, it is made available in succeeding time 'windows' for showings on airplanes, cable pay-per-view systems, subscription cable networks like HBO, and then advertising- supported broadcast and cable networks.

Then the punch-line:

The only films the studios can make available for online rental [note - not acquisition] "are those in the relatively short pay-per-view window and much older films. And even with the older titles, Internet rights have to be negotiated with the producers and owners of any music used in a film."

Fade and cut.


Jon Newton is the editor of p2pnet.net and is a regular contributer to MP3 Newswire. Jon's site is devoted to the politics of digital music and his insights as well as those of his co-writers can be read there. We urge you to explore it.


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MGM V. Grokster: Actively Encourage is the Test
Interview With StreamCast on Grokster Ruling


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