In an unusual show of cooperation, five Hollywood studios - Metro-Goldwyn-Mayer, ParamountPictures, Sony Pictures, Universal Studios and Warner Bros - are banding together to create an on-demand movie service that will offer theatrical films via digital delivery for broadband Internet users in the US.
The service will primarily be an open-access IP (Internet Protocol)-based system, although other means of delivery will be explored after the launch of the service. Noticeably absent from the coalition are 20th Century Fox and Walt Disney Studios.
In all cases, movies will be supplied to the service on a non-exclusive basis, a measureclearly designed to appease Washington lawmakers who might otherwise see insuch a venture something akin to a Hollywood distribution cartel. It will notescape Washington's notice that Warner Bros is owned by AOL Time Warner,itself engaged in a war of words with Microsoft over control of the networkedhome.
Indeed theprospect of two major on-line music ventures -- each of them involvingrecording giants that are linked with some of these very same Hollywood studios-- has already raised anti-trust hackles. Congressional committees haveexpressed their concerns that by teaming up, entertainment giants have littleincentive to keep prices competitive.
After years ofwatching from the sidelines, the Hollywood studios have clearly decided thatthe broadband market has reached a sufficient size to support the creation ofan on-demand digital distribution channel. The US now has more than 10 millionbroadband households and nearly 35 million broadband-enabled screens.
The service willoffer broadband customers recently released films as well as additional contentfrom film libraries spanning all genres. It will also be made available toindependent film producers and distributors who want to distribute their filmsto this consumer base. Each content provider will independently determine itsown release windows and pricing strategies. Further details, including a nameand launch date, will be announced at a later date.
As anopen-access digital distribution system, the service plans to deliver filmcontent to consumers reliably and securely in a short period of time. Deliverytime will vary depending on the speed of the individual user's accesstechnology. The service will launch with films available via PCs. Movies may beviewed on computer monitors or on a television screens connected via anordinary S-video cable or radio frequency device connection - a standardon many current computers.
Rollout to otherdevices and distribution systems is anticipated at a later date. The servicewill provide an appropriate level of copyright protection to enable thelegitimate distribution of content on the web with the latest Digital RightsManagement (DRM) software incorporated and updated over time.
In making theannouncement, various Hollywood heavyweights made comments on behalf of theirunprecedented partnership.
Said ChrisMcGurk, vice chairman and COO of MGM: "By combining the ideal blend ofinnovation, technology and the Internet, we have created a revolutionarydelivery system that effectively offers consumers the best in choice andconvenience in the evolving digital landscape. This venture promises to be adynamic infrastructure for exploiting MGM's renowned brand and filmlibrary."
Jonathan Dolgen,chairman, Viacom Entertainment Group which oversees Paramount, added: "Weand our partners are pleased to be at the forefront of this groundbreakingendeavour, bringing box-office hits to consumers via the Internet,complementing our existing distribution alternatives. With this service, we cansuccessfully deliver quality content to movie enthusiasts, providing them withgreater choices and access, as well as a secure platform to receive their filmedentertainment. This service demonstrates Paramount's commitment to the digitaldistribution of our content via the Internet."
Mel Harris,president and COO, Sony Pictures Entertainment, commented: "Theintroduction of the service represents a significant advancement in thedevelopment of the internet as an entertainment medium. In increasing numbers,we see audiences turning towards the broadband Internet as an exciting newchannel through which they can access entertainment. Sony Pictures, along with otherstudios, intends to give them the opportunity to do this."
Ron Meyer,president and COO, Universal Studios said: "We are always looking for newways to bring our content to the consumer. This is one of the many distributionavenues we are pursuing to provide on-demand entertainment in the UnitedStates, which reflects Vivendi Universal's overall strategy of utilising avariety of distribution platforms around the world. In addition to theexperience of going to the theatre or the local video store, this service willprovide an exciting and secure new medium for movie viewers to enjoy our filmsat home."
And, finally,Barry Meyer, chairman and CEO, Warner Bros chimed in: "We believe humannature is not predisposed towards piracy. By proactively offering a convenient,affordable, high-quality source of content, the film industry can meet theneeds of the public, while successfully protecting our intellectual property aswe move further into the digital millennium."