Download-to-Own Movie Services Open the Door to the Future of Digital Distribution

"The next issue is that customers really want, and even expect, pricing to be lower than the retail environment, and probably even lower than the etail environment," Mavis continues. "That’s been a slow start, but we’re trying to be aggressive there." An example of this is CinemaNow’s offer to let consumers buy one movie at full price and get a second for five dollars.

"Finally, the third issue is for people to have portability with their content, and more important than that is for them to be able to burn it and play it on traditional DVD players," says Mavis. "I don’t think that’s necessarily right around the corner, but I know that’s on everyone’s agenda."

Getting to the TV
Considering the slow adoption of Windows Media Center PCs and other devices capable of truly integrating TV with the Internet, implementing a solution whereby consumers can download a movie and burn it to DVD in MPEG-2 is a very compelling proposition, although not one that has a simple solution. "I think the studios have been comfortable for a while with Windows Media DRM, but they still have not become comfortable with a DRM that allows someone to burn a DVD and play it back on a traditional DVD player," says Mavis.

Simply letting consumers download an MPEG-2 file and burn it to DVD isn’t necessarily an option, as it would increase the download time tremendously, so Movielink’s current plans are to work towards a method for eventually allowing consumers to take that Windows Media file and transcode it into MPEG-2 on their home PCs. "That’s the preferred approach, but you not only have to transcode from Windows Media to MPEG-2, you also need to transcrypt from Windows Media DRM to CSS. And that requires studios, IT companies, and consumer electronics companies to agree on doing that," says Ramo. "There is a real consumer demand for this, and we are working on it, but it takes eighty companies to come together to make it happen so it’s not a simple process."

This model is one that CinemaNow is considering as well, although they’re in a position now where they’re considering all the possibilities. "Our door is pretty open right now to consider various options. If I look at it from the point of view of going with the philosophy to give the customer what they want, they don’t have any special allegiance to any format or DRM. So we’re overturning every rock we can find to try and do that," says Mavis.

The push to enable MPEG-2 DVD-burning stems from a desire by both content providers to do what is needed in order to empower their customers to enjoy their downloaded movies on their TVs. "Movielink is really interested in getting to the TV, and we’re prepared to do it through various routes," says Ramo. "One mechanism for doing that is through a standard DVD player. Another is through home networking. Another is IP set-top boxes that have a broadband in and TV out, and we’re working with, from example, RCA and Akimbo with their box. So we’re interested in getting the consumers movies wherever they are and any way that we can."

Providing consumers with that level of portability and flexibility is really the ultimate goal of any online content provider. "The holy grail is everything, any time, anywhere. That’s what everybody’s looking for, and I honestly believe that there will be some time in the near future when that will happen, but it’s quite a few years away," says Mavis. "That said, I do believe that you’ll see significant advances in the portable marketplace, in pulling that content from the PC to view it on different devices throughout the home next, and finally to create a secure burned DVD format alternative over the next six to twelve months.

"Those three things combined with significantly more content availability in an earlier window are the reasons this market is going to go from the very, very early stages that it’s been in for the last few years to a very high growth area," says Mavis.

Not Yet a Perfect Model
To varying degrees, both Movielink and CinemaNow admit that this first offering is only a staging ground for the next-generation of distribution services. And they’re both working hard to ensure that even in this early stage of development, consumers can still have a positive experience.

For Movielink, that means not being totally inflexible with its three-PC limit on transferring movies around. "If a person is telling us that they’re going to discontinue the use of one PC that is a licensed PC for another, then we’ll go ahead and issue a license for the new PC," says Ramo. All a customer has to do is call into customer service and explain their situation to get this resolved. "But we won’t be providing new downloads. That is the reason why we are really encouraging people to back up their movies with burned DVDs," says Ramo.

For CinemaNow, it’s a matter of pushing out the rights associated with their content to match and potentially surpass Movielink. "Our customers only being able to watch our movies on one PC is a short-lived issue for us coming out of the gate. We’re certainly going to offer those rights in a very short amount of time," says Mavis.

The reality is that this first iteration of download-to-own services will only be compelling to a subset of the eventual mainstream market, but that doesn’t lessen the significance of this announcement to the overall digital distribution space. "I think we’re still a ways away from the real, perfect model that’s going to drive this business to become mainstream," says Mavis. "I think the most important thing for people to recognize from these announcements is that this is a major step forward for the digital distribution business, but there’s still a long ways to go."