With the growth of digital delivery, film archives are a potential goldmine for US studios and other rights-holders. Denis Seguin looks at the promise of digital, while Screen correspondents (see links, right) explore the distribution opportunities for major public rights-holders...

In 1955, RKO Pictures licensed the television rights to its 740-film library for $15.2m. For the first time, television viewers saw the likes of Citizen Kane and King Kong. And, for the first time, the Hollywood studios saw the revenue potential of their archives. Over the decades that followed, TV led to pay-TV, VHS led to DVD, and DVD led to HD-DVD.

Now, more than 50 years later, those same distributors - and indeed the phoenix-like RKO - are continuing to capitalise on the films in their vaults. But with the DVD market reaching a plateau, all eyes are on the home-entertainment horizon.

The promise of online digital delivery reconfigures the notion of release windows and fractures the concept of home entertainment across many surfaces: from the high-definition, surround-sound glory of the home cinema to the two-inch display on mobile telephones and portable entertainment units such as Apple Corp's iPod - the latest version of which can store more than 50 feature films.

And the fracture keeps spreading: Apple is working with six international air carriers to allow passengers to plug their iPods into seat-back entertainment systems. Could this be the beginning of the end for the inflight window'

Meanwhile, Xbox 360 console owners can use Microsoft's Live service to download movies to the unit's hard-drive, an incursion into the hardware space from the video-game domain.

Furthermore, technology has made it possible for more companies to play an active role in the marketplace: HanWay Films recently merged with Celluloid Dreams to create Dreamachine, with the aim of building its own international digital distribution platform to exploit its combined 500-title library (see boxout).

Ancillary expands its reach into new markets
The ancillary market has expanded as well. You can pay $3 and download a ringtone from Warner Bros' Casablanca; or pay $2 and download mobile-phone wallpaper of Marlon Brando as Don Corleone in Paramount's The Godfather.

And, as the studios insist, let's not forget HD-DVD and Blu-ray, or indeed good old-fashioned conventional DVD.

'We expect to be in the packaged goods business for many years to come,' says one studio source. 'We see ourselves as wholesalers working with retailers. The more aggressive posture of life after hard goods is going to be on the delivery side. Apple, Amazon, BitTorrent, Movie Link.'

Indeed, Warner Bros and BT recently signed an agreement that will see a range of Warner Bros' films and television shows available online to UK customers of BT Vision, the telecommunication company's download service.

However, despite the promise and the hype of digital delivery, motion pictures are not leading the charge into the brave new space. Particularly where archive, or as the studios call them, catalogue pictures are concerned.

'The top-selling download is a couple of thousand transactions, as opposed to tens of millions of DVDs sold of a major motion picture,' says Sony Pictures Home Entertainment president David Bishop.

'Over the next five years conventional DVD is still going to be the dominant product, with Blu-ray second and digital download third,' says Pat Fitzgerald, executive vice-president of sales, distribution, trade marketing and supply chain at Walt Disney Pictures (Disney has embedded itself with Sony's Blu-ray technology camp).

As a case in point: before Disney releases Pirates Of The Caribbean: At World's End theatrically in May, it will release its predecessors on Blu-ray. And when World's End is released on conventional DVD, it will be released on Blu-ray and for digital download simultaneously.

Broader broadband
When the market reaches a tipping point will be determined by the growth of broadband technology and download speeds. While the US is producing the most coveted titles, the nation is lagging in broadband penetration - estimates range between 20%-50% of households.

In Japan and Korea, penetration levels are 80%; moreover, service providers in those countries are offering speeds exceeding 100mbps, fast enough to download a DVD-quality film file in a few seconds.

Anyone who is not paying attention is bound to be left behind... in their archive.