CinemaNow CEO: Open Standard Download Key1 Feb, 2008 By: Erik Gruenwedel
News that Apple iTunes has expanded beyond episodic television programming to offer movie rental streams from the major studios can't hide the fact the video download market remains marginally accretive at best.
The NPD Group found that just 2% of Web-based homes in the first quarter of 2007 purchased video content online. Of the paid video downloads, a clear majority (77%) was TV programming, including 33% that could be viewed for free on TV network Web sites.
The study found that 30% of early adopters purchased one video title per quarter, with just 14% of those consumers using a download service.
CinemaNow CEO Curt Marvis says the key to consumer adoption of movie downloads is open standards that allow the proliferation of content across multiple channels and devices.
To help augment transportability of content, CinemaNow and Macrovision in January inked a deal that allows consumers to download content from CinemaNow to Macrovision-enabled consumer electronic devices.
With Home Media Magazine, Marvis discussed why downloads haven't taken off and what needs to be done to expand it beyond Apple.
HM: Despite all the hype, hasn't the market for movie downloads from the Internet been slow out of the gate?
Marvis: The digital distribution business has had a lot of expectations set against it for quite a long time. The confluence of events around digital rights of content, pricing and ease of use at the consumer level at the hardware level simply haven't happened yet.
The closest anyone has gotten to a great user experience is Apple. It unfortunately sits in a silo where that content can only be used on Apple devices, and there isn't a broader use capability.
We are pursuing, with the help of Macrovision, to create more of an open standard where regardless of the particular electronics device, you can watch movies from CinemaNow.
Currently we have deals with Samsung, HP and Dish Network.
HM: How can the online download industry compete with burgeoning day-and-date releases on cable VOD and DVD?
Marvis: Consumers want to watch content beyond the set-top box. Cable content is sort of isolated. They want to watch it on different devices in the home and take it with them on portable devices. All of this is more readily available from Web-based download services.
The cable VOD model is an interesting one and certainly convenient but does not allow all the use cases consumers have asked for. We allow burning content to a disc that allows permanent archiving. Of course, you can also play a DVD on a variety of devices.
HM: Blockbuster Inc., Lionsgate and Microsoft founded CinemaNow in 1999, among other investors. What do the studios want from movie downloads?
Marvis: They are very anxious to find new revenue out of electronic distribution. Certainly they do not want to be beholden to Apple at the same levels the record labels have become.
There is a desire among the studios to broaden as much as possible the number of distribution partners for digital content. To date, there hasn't been enough device penetration that is easy to use and competitively priced.
They are hopeful we can provide additional avenues. There isn't a lack of belief among the studios that electronic sellthrough won't be a big business, they just haven't been able to see any clear solutions that make sense to them.
And this deal [with Macrovision] is a step in that direction.