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VOD Suppliers Mull Competing With Free

13 Jun, 2007 By: Chris Tribbey

SANTA MONICA, Calif. — Competing with free may sound like an impossible task, but content owners, media experts and video distributors mulled every option at the Digital Hollywood confab last week.

Time and again, the ease of which most any media product can be found on peer-to-peer Web sites was cited by Digital Hollywood speakers as the main roadblock in competing with free in the digital delivery realm.

“The consumer mindset now is if I want ‘Lost,' I should get it for free,” said Mark Heninger, founder and CMO of online content packager DreamTank. “You can't stop filesharing. All you can do is beat ‘em at their own game.”

Beating piracy means matching what P2P can offer, many agreed.

“Why do people use BitTorrent? Because everything is there. Not everything is legally available,” said Brad Hunt, former EVP and chief technology officer of the Motion Pictured Association of America (MPAA). “And the windows (between theatrical and DVD and online releases) create a huge piracy opportunity.

“The breadth of content availability needs to increase … and those windows need to collapse.”

“One of the best ways in any market (to beat piracy) is if it's a fair price and easily obtained, consumers have no problem paying for it,” said Gary Morse, SVP of technology and content protection for 20th Century Fox.

“Free is really not free, either,” added David Caulton, Microsoft's Zune MP3 player development team leader. “It takes a lot of time (to download) and the quality may not be great. BitTorrent is painful.

“People will pay for convenience.”

Those who offer legal downloads all agreed: people want what they want, and they'll go wherever they can find it quickly. The key is making them want to do it legally.

“The expectation to find a video online has certainly changed,” said Jim Funk, co-founder and VP of marketing for Akimbo Services, an online digital video service.

Making a download affordable is easy to say. In reality, it can be difficult to find the right price for a digital file.

“There are many, many movies I'm not interested in paying $15, $20 for,” said Curt Marvis, CEO of CinemaNow. “But I might pay $4 to check it out.”

Everyone agreed that there's plenty of room for growth in the digital download industry.

“I don't think any of us are doing the volume that will be there in the future,” said Eric Patterson, VP of consumer services for BitTorrent. “[Digital delivery is] the only industry left that happens to have a huge growth curve available to it. It's certainly not DVD or cable.”

Marvis said his company is surprised by the popularity of short-tale content, such as TV episodes and video clips.

“Portable devices are starting to drive this,” he said. “It doesn't have to be a big screen. An iPod can be good enough.”

According to Mary Coller Albert, chief marketing officer for Movielink, even the most obscure content at her business has an audience. “It's about those niche areas,” she said. “There's not one category, not one title that has not been touched.”

But when consumers have that download in hand, a big question still remains: how much ownership do they actually have?

“What we're hearing is that when you rent something, you don't want to rent it, you want to own it,” Akimbo's Funk said. “You want to move it to DVD, a PC, your iPod. People don't want to steal it. They want to enjoy it.”

“Our goal would be for you to purchase an item and be able to use it on all devices,” added Roy Price, digital video director for Amazon Digital. “That would be the ideal world, but it's just not reality right now.”

An MPAA-commissioned study found that in 2005, $6.1 billion was lost to piracy, with $3.8 billion of that blamed on hard goods, such as DVDs, Hunt said.

Earlier on June 13, Jim Cicconi, SVP of external and legal affairs for AT&T, announced that the company will start weeding out Internet piracy in its network.

With industry enforcement and government legislation, added with offering consumers a reasonable and affordable alternative to theft, many in the industry hope there's a light at the end of the tunnel.

“The days of completely ignoring copyright in the YouTube context won't last forever,” Amazon Digital's Price said.


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