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Convergence Is Converging Faster Than Ever Before

17 Sep, 2003 By: Holly J. Wagner

When Forrester Research released a report predicting the demise of physical media just a few weeks ago, most industry observers discounted its disc death knell as more than a little premature.

But events in the couple of weeks since make Forrester principal analyst Josh Bernoff look a lot less like Chicken Little and a lot more like an industry oracle.

Consider these examples:

  • Two weeks ago, the Federal Communications Commission (FCC) adopted “plug and play” rules for digital programming. The new rules will mean consumers can, at last, run cable transmissions directly into their TV sets, with no need to pass the content through set-top boxes. They would still need descrambler cards to get premium channels like HBO and set-tops for two-way services like video-on-demand (VOD) , but at least they could get high-definition broadcasts without one.
  • In the same rules, the FCC also removed subscription video-on-demand (SVOD) services from “copy never” status to “copy once,” like other subscription services. Starz Encore CEO John Sie jumped for joy at the ruling, which lets Starz customers tape or burn copies of its programming for personal use.
  • Disney, which recently signed on to offer its movies on Movielink.com and launched a test of expiring DVDs, signed another Internet VOD deal to offer its movies over Cinemanow.com. The studio is also preparing to test its own proprietary VOD service, Moviebeam.
  • Microsoft announced it would open the source codes for its Windows Media Player 9 to the software development community, which means they can not only improve on the code, but, if it gets accepted by the Society of Motion Picture Television Engineers, it could become the dominant platform for a variety of home entertainment devices.

Any one of these events might not be a big deal, but coming together, they could point the way toward a new entertainment future.

I'm not schlepping my DVD player out to the trash just yet, but it does look to me like convergence is converging at an increasing pace.

The last piece of the puzzle is copy protection for cable and satellite content. If the studios ever get cable and satellite to use copy protection, watch for the rental window to slam shut. You'll see, as Bernoff predicts, a rapid shift to day-and-date releases everywhere but in theaters. And maybe even there.

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