Digital Nerd

Monday, July 04, 2005

Forget the Bootleg, Just Download the Movie Legally

Too rainy to go to the video store? Want a movie to watch on your laptop on the airplane? Or how about an older title that isn't at the local Wal-Mart?

After years of avoiding it, Hollywood studios are preparing to let people download and buy electronic copies of movies over the Internet, much as record labels now sell songs for 99 cents through Apple Computer's iTunes music store and other online services.

The movie industry has in years past made half-hearted attempts to let people rent a small number of movies online, but the rapidly growing use of Internet video, both legal and pirated, is prompting it to create more robust download options and to consider online business models it dismissed as recently as a year ago.

The studios have been working for months to confront the technological and business challenges of digital sales. Those initiatives gained new urgency on June 27 when the Supreme Court ruled that companies distributing software that allows users to trade pirated copies of audio and video files are liable for copyright infringement only if they induce users to break the law.

Sony, for example, is converting 500 movie titles to a digital format that can be downloaded and sold. Universal Pictures, a unit of NBC Universal, which is 80 percent owned by General Electric and 20 percent owned by Vivendi Universal, is preparing nearly 200 titles for digital online sale. And Warner Brothers, a division of Time Warner, says it has already digitized most of its library of 5,000 films and will start selling some of them online later this year.

The studios have strong incentive to make sure they offer consumers legal options: the rapid adoption of high-speed Internet connections is making the trading of pirated copies online easier and more widespread.

"It just will be easier and easier to be a legitimate consumer and harder and harder to be a pirate," said James Ramo, the chief executive of Movielink, a movie downloading service established by five major studios three years ago.

Of course, nobody argues that legal video downloads are going to take off quickly. It still takes half an hour or longer to download a movie, more than it takes some people to drive to a video store. The picture quality on a computer screen is not as good as a television with a good cable hookup. And there are not easy ways to move movies downloaded onto a PC to a television set.

Still, there is already a growing group of technology-savvy video buffs who are using free file-sharing software like BitTorrent to download pirated programs, especially movies that have not yet been released to DVD and new episodes of TV shows.

Not surprisingly, the videos that people most want to download are those that Hollywood is most shy about making available online.

Studios do not want to undercut box office receipts and DVD sales for hit movies, and TV networks do not want to put popular shows online, which might allow more viewers to skip the commercials. Nor do they want to rush into new technology that itself could be perverted.

"Broadcast, satellite and cable are all good models that provide us the ability to generate revenue for us and are relatively safe from piracy," said Robert C. Wright, the chief executive of NBC Universal, expressing the widely held view of studio executives. "The Internet may be more convenient, but it is Dodge City."

Josh Goldman, the chief executive of Akimbo, a company that sells a digital video service delivered through a special device that connects television sets to the Internet, said that while the industry was starting to experiment, "everyone is holding back the best of their programming until they figure out the right model."

For example, Robert A. Iger, the president and next chief executive of the Walt Disney Company, said at a recent investor conference that he was interested in concepts like what he called "Desperate Housewives Plus," in which consumers could buy the right to watch an episode starting the day after it was broadcast along with additional scenes and "a few more bells and whistles."

Even without Hollywood's offerings, consumers are already seeing more video online as faster downloads and better software improves the experience. In the past, users had to download player programs in order to watch small blobs of color do herky-jerky dances in a small corner of their screens.

These days, more people watch free music videos online than on MTV's cable channel. Short videos, like political spoofs by JibJab Media, and clips of Paris Hilton's latest escapade, can be seen by millions of people.

CNN just moved most of its online video content from a paid service to its free Web site, with a commercial in front of each clip.

And even lengthier programming is gaining appeal. About 700,000 people watched the season premier episode of WB's "Jack and Bobby" through video streaming when it was on AOL last fall.

"We are finally getting to the point that enough people have high-speed connections," said Blair Westlake, the former chairman of Universal Television who joined the Microsoft Corporation last year as its chief ambassador to Hollywood.

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