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Downloadable movies: Sony and Jaman

Jaman_logo_2 Paramount_logo Two announcements today about downloadable movies illustrate Hollywood's one-step-forward, one-step back approach to this market. Jaman, an online video-on-demand service that specializes in indie fare, announced a licensing deal with Paramount that gives the site its first major-studio content. It's a nice pick-up for Jaman, which distributes moves in part through a secure file-sharing network -- the kind of technique that was once a non-starter with Hollywood. But unlike the other films offered by Jaman, Paramount's titles won't be available in high definition. The restriction reflects the widespread aversion in Hollywood to sending high-def movie files to PCs -- you won't find high-def titles at Movielink, CinemaNow or Amazon's Unbox, either. Nor will the films be available to rent on Jaman as soon as they reach the local video store; instead, they'll have to wait several weeks for the video-on-demand window.

Sony_playstation_logo Intertrust_graphic The studios have been willing to provide high-def downloads to a handful of specialized living-room devices, such as the XBox 360 game console, the Apple TV, the Vudu box and now the Sony PS3. (Kudos to my colleagues Dawn Chmielewski and Alex Pham for breaking that story months ago.) On the plus side, the PS3 download service uses the Marlin DRM developed in part by Sony and Intertrust Technologies (a company that counts Sony as a major investor). Marlin, which is designed to interoperate with other DRMs, can grant playback rights to a set of personal devices. Initially, Sony will use it to let people move downloaded films and TV shows from their PS3s to their PSPs. What it won't do, though, is let people move the programs they rent or buy to their laptops or desktop PCs -- at least not right away. That's a galling omission, particularly for download-to-own titles. Marlin DRM licenses can be updated remotely, so if Sony changes its mind and allows movies to be transferred onto computers, the new flexibility can be applied retroactively to movies already purchased. But even if Sony does relax the restrictions, high-def titles probably won't be allowed outside the PS3-PSP-TV world. That begs the question of why anyone would buy a title when the only way to preserve the bits is to tie up scarce space on the PlayStation's hard drive.

Sony's CEO, Sir Howard Stringer, has made interoperability and connectivity a priority for the company. In fact, he pledged last month that 90% of Sony's product categories would include devices with networking capability within three years. It will be interesting to see how Sony meshes that goal with its high-definition evangelizing and its studio's reservations about the PC.

Nifty "Trust" illustration courtesy of the Intertrust website.

DVD copying in the US, UK

Futuresource_logo It's been an article of faith for the entertainment industry that unauthorized copying = lost sales. The MPAA seems to be the market leader on this front, citing mind-boggling estimates of the billions of dollars in revenue siphoned off by piracy. This week, Futuresource Consulting Ltd., a UK research firm, released a study that purports to confirm the conventional wisdom, at least in part. According to the study, about a third of those interviewed said they had made copies of pre-recorded DVDs in the previous six months. That's up from about a quarter in 2007. Had they not been able to make those copies, a high percentage of those surveyed -- 77% in the U.S., 63% in the U.K. -- would have bought at least a few of them. Strong stuff, but not surprisingly, there are some notable caveats.

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That's advertainment

The Rookie Fox 24 Degree deodorant branded entertainment advertising Apologies for stealing the headline from an editorial we ran Monday about the FCC and product placement, but it applies just as well to this post. In the aforementioned opinion piece, the Times' editorial board inveighed against the nanny-state notion that adults can't ward off the siren song of embedded advertising without the government's help. Still, I sense that we might be on the cusp of a new wave in video that intertwines advertising and entertainment more completely than before, and also more subtly. Call it the era of "branded entertainment," brought to you by content providers who can't (or won't) make people pay to watch their programming. And although I think market forces will serve as a powerful deterrent to deceptive behavior, I wonder if even the most in-your-face disclosures about the role of advertisers won't be erased as clips bounce from site to site to site.

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3D movies spread far beyond the House of Wax

Read_d_3d_logo In March I noted that digital cinema rollouts were fast approaching a critical mass. In recent weeks, digital 3D deployments have gained a similar momentum, albeit on a smaller scale. In particular, Beverly Hills-based Real D had two big announcements in quick succession. On May 20 it announced that Regal Entertainment, the world's largest theater chain, would add Real D 3D systems to 1,500 screens, or more than 22% of its U.S. venues. Then on Tuesday, another major U.S. chain, Cinemark, announced plans to add Real D systems to up to 1,500 screens. That's almost a third of Cinemark's total. These commitments should push Real D, which can be seen on a little more than 1,000 screens today, to about 5,000 screens by the end of next year, said Elizabeth Brooks, the company's chief marketing officer. Its closest competitor, Dolby, has deployed its 3D systems to about 30 U.S. theaters and numerous others worldwide.

Because these 3D deployments rely on digital projectors, it's natural that 3D would pick up steam as digital cinema deployments accelerated. According to Brooks, installing the equipment needed to show Real D 3D movies -- the special lens for the projector, the reflective screen and the supply of 3D glasses -- costs about $25,000, or 25%-40% of the cost of converting an exhibition space to digital. With 3D films easily generating two to three times the box office of their 2D counterparts (a margin attributable in part to the $1 to $3 premium charged for tickets to 3D showings) cinemas can recover their costs in a week. Still, cinema owners have a hard time justifying the investment unless they can count on more 3D movies being released.

That part of the picture is brightening, too.

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Allow me to infringe on Jon Healey's goodwill and moral rights in the Bit Player franchise...

Larry Lessig had a fascinating copyright idea in the other Times a while back, which gives an interesting perspective on this L.A. Times story about J.R.R. Tolkien's descendants' fight for some of the gross on the New Line Cinema "Lord of the Rings" adaptations. Writes Rachel Abramowitz:

Tolkien obviously isn't Peter Jackson, who directed the franchise, or Liv Tyler or Viggo Mortensen, who starred in it, or New Line Cinema, the studio that financed it, or Miramax, which owned the film rights for a second but couldn't get the movie made, or producer Saul Zaentz, who bought the rights in 1976. He's just the guy who dreamed up the cosmology, the whole shebang of hobbits and dwarfs, orcs, ents, wargs, trolls, whatnot. "Three rings for the Elven-kings under the sky, Seven for the Dwarf-Lords in their halls of stone, Nine for Mortal Men doomed to die, One for the Dark Lord on his dark throne." Those were old John Ronald Reuel Tolkien's words.

But he's dead, so why should Hollywood share any of the dough?

In reference to a far less lucrative literary franchise, here's a good reason why not.

Continue reading Allow me to infringe on Jon Healey's goodwill and moral rights in the Bit Player franchise... »

Nokia phones to come with Warner music

Warner Music Group signs deal Nokia Comes with Music free song downloads The first casualty of this decade's digital music revolution has been music sales, as consumer switched from CDs to 99 cent singles or free downloads. But some industry executives see a chance to reverse the trend and sell music in significantly larger bundles -- more songs, in fact, than the average consumer buys in a year. That's the home-run swing promised by initiatives such as Nokia's Comes with Music, which signed up its third major record company today, Warner Music Group. Universal Music Group, an early advocate of this kind of thing, and Sony BMG were already on board, with EMI still in licensing talks.

The Comes with Music proposition is simple: buy a specially designated Nokia phone, get an unlimited number of seemingly free song downloads for one year. That's seemingly free, not actually free, because the price of the phone will include a hidden sum that Nokia will split with the labels and music publishers.

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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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