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Microsoft, CinemaNow Partnership to Boost VOD Content

6 Jan, 2005 By: Holly J. Wagner

Video-on-demand (VOD) has been a promise for so long that many have written it off as vaporware, but tech companies are stalking the wild couch potatoes at this year's Consumer Electronics Show (CES) in Las Vegas.

Microsoft, which has its own Windows Media digital rights management, is among the companies hammering out deals that will get more content to more devices in more ways.

The jewel in the crown may be a deal that will partner movie download service CinemaNow with Microsoft's MSN TV 2, an Internet-connected set-top box with a wireless keyboard ($199 plus $9.95 monthly subscription cost). Starting this spring, the companies will pipe CinemaNow's content — which includes more than 2,000 titles from 20th Century Fox, Sony, MGM, Disney, Miramax, Warner Bros. Image and CinemaNow backer Lions Gate — directly to TV sets.

MSN TV 2 hopes to offer as many as 5,000 titles by this summer, said Andy Sheldon, senior director, product management for MSN TV. Although Microsoft has a previous relationship with studio-backed CinemaNow competitor Movielink, that is more of an affiliate relationship that pays MSN a finder's fee when its users buy movie downloads from Movielink,

“This is more significant in that MSN TV subscribers can now get access to the CinemaNow library on their television sets,” Sheldon said. “It is really the support that we are adding on our set-top for digital rights management” that makes the deal possible.

Details of the offering have yet to be worked out, but Sheldon said the companies plan to offer movies a la carte and by subscription or as a discounted bundle for people who want to subscribe to CinemaNow and MSN TV.

In addition to major American studio films, Sheldon said nontraditional programming is a lucrative niche that may be impractical for packaged media but makes sense for digital delivery.

“It's like everything else we have been doing with our business for the last five years; it's a building block,” said CinemaNow CEO Curt Marvis. “We've heard people talking about it for 15 years and now it's happening. It has to do with the awareness that consumers have now of VOD. Comcast is certainly helping that tremendously. As VOD over cable gains traction, it helps VOD over IP as well, because it just means that more consumers are looking for more content for all their devices. I think 2005 is going to be the year we see video delivery over IP the way we saw with music three years ago.”

Microsoft is also busy making other deals to extend its reach. The company announced a deal with Sirius Satellite Radio to develop mobile video technology that the companies expect to offer by mid-2006. Sirius will have the responsibility for getting content for the service.

“We will take the DVD experience to the next level, offering the best content easily available to families and consumers,” said Sirius CEO Mel Karmazin. “Working together with Microsoft will help ensure the exciting development of a solid and user-friendly video platform for Sirius for years to come.”

The CinemaNow pairing will use Windows Media 10, while Sirius is working with Windows Media 9 to meet demand from automotive partners executives described as “eager proponents of the service, given the strong demand for rear-seat video entertainment.”

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