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Downloading Hitting Critical Mass

14 Feb, 2007 By: Anne Sherber

New York — Downloading movies over the Internet is finally a real business, albeit one with multiple caveats and provisos, according to many industry executives who gathered in New York to discuss the present and future of digital entertainment at the 2007 McGraw Hill Media Summit held here last week.

Although many of the same issues that concerned attendees at last year's annual confab remain unresolved this year – digital rights management and content portability, for example – a number of industry leaders said internet-provided content reached a kind of critical mass in the last year.

“Tipping point is a fair way to describe the last year in high-end, long-form, on-demand programming on the internet,” said Fred McIntyre, SVP, AOL Video. “On the user end, people's relationship with programming has changed profoundly. There is a fundamentally different expectation on the part of consumers. People can find whatever they want, wherever they want it and whenever they want.”

But there are still significant impediments to video on demand over the Internet, according to several executives. Jan Hofmeyr, EVP of Business Development, Entriq, said one big problem is finding out how to make money.

“An enormous amount of video has been downloaded via broadband but very little money has been made on it,” says Hofmeyr.

Michael Arrieta, SVP, digital marketing, Sony Pictures, said ease of use is another stumbling block.

“Internet delivery is not easy yet,” Arrieta said. “We have trouble putting content on portable devises, too many DRMs don't inter-operate. We need to get as many people as possible working together toward a solution. We have to figure out a way to get people to pay for content, figure out a way to get it to their TVs or a portable device they care about.”

Also, the divide between the computer and the television is difficult to traverse. And consumers need to feel comfortable negotiating the technology.

“How do you make it convenient?,” Hofmeyr said. “Consumers don't want to watch movies on their PC. The challenge is getting content from computer to big screen.”

Another obstacle to unfettered access to Internet content is rights licensing, said John Boland, chief content officer for PBS. License holders are reluctant to make deals for new digital platforms, afraid that they will fail to anticipate platforms that are not yet fully developed.

“Producers are holding back until they have a clearer picture of what the digital opportunities will be,” Boland said.

Despite the growth of digital delivery, packaged media will last for some time, speakers noted.

“There are still a ton of people who are never going to download a film,” Arrieta said.

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