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CinemaNow-Macrovision, Netflix-LG

Providing one glimpse of how home video might evolve, Macrovision and CinemaNow have integrated their technologies to make it easier for consumers to watch movies from an online video jukebox on their TV sets and portable devices. Another glimpse comes from Netflix and LG, which are integrating technologies into a new set-top box, but that one has some non-trivial (although temporary) shortcomings.

CinemaNow was one of the pioneers in downloadable video, gradually lining up all the major studios for online movie downloads -- first as rentals, and more recently as purchases (still a work in progress). Like other online movie sites with movies from the major studios, it has struggled offer an easy way for users to transfer downloads from their PCs to their TVs. It recently embraced Sonic Solutions' DVD-burning technology, which uses the same form of DVD encryption that the studios and DVD manufacturers use. But it's available only to people who buy new DVD burners -- in other words, none of CinemaNow's current customers.

"Part of the challenge for everyone in this industry right now is, there’s no absolute, clear winning solution that consumers have said, `This is how we want to get the content,'" said CinemaNow CEO Curt Marvis. So the company is trying to make its wares available through as many devices as possible. That's where the Macrovision tie-up comes in. Macrovision already supplies the industry standard copy-control technology for analog outputs; in fact, inclusion of Macrovision's technology in VCRs, DVD players and DVD drives was practically mandated by Congress in the 1998 Digital Millennium Copyright Act. Its ambition now is to provide the copy-protecting software platform for home networking, which it calls its "Digital Home Entertainment Solution." Macrovision hopes to put that software into cable converters, media storage devices and even TV sets, starting in the second half of the year. At that point, CinemaNow will operate much like a cable video-on-demand service, albeit with a few minutes of delay for buffering. That kind of service is already available to those with HP MediaSmart TVs and one of DISH Network's advanced set-top boxes, which previously integrated CinemaNow.

The payoff for consumers is more control over what they watch and when they watch it. CinemaNow's supply of movies is larger than the average Blockbuster store's, and nothing on its list is ever out of stock. It's not as comprehensive as it should be, thanks to Hollywood's windowing system -- titles periodically pop in and out of home-video circulation, rather than remaining available persistently. But it's still a heck of a lot larger than what cable offers on pay-per-view or what you might find on a subscription video channel such as HBO or Starz.

When it comes to offering movies through the Web, Netflix is much more handicapped than CinemaNow by Hollywood's windowing system and exclusive contracts. The deal with LG sounds revolutionary: through a new LG set-top box, Netflix subscribers will be able to watch movies on demand, streamed from the Internet, for no extra cost. Netflix says it plans similar deals with other manufacturers, too. But the problem is, well under 10% of Netflix's 90,000 titles will be available through this service. Among other reasons, many of those titles' digital rights are held by HBO, Showtime and Starz. Those contracts will expire within a few years, so Netflix may eventually be able to provide a truly robust video-on-demand service. For now, though, the roster isn't nearly as impressive as what Netflix makes available by mail.

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Times editorial writer Jon Healey pens opinion pieces about a variety of business issues, and blogs about technologies that are changing the entertainment industry's business model.

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