Download to disc at home?

Direct-to-consumer model could shift windows

By Paul Sweeting and Jennifer Netherby -- Video Business, 11/25/2005

NOV. 25 | As the technology for downloading, on-demand DVD burning and portable video playback advances, old questions about release windows are getting new attention.

A flurry of TV licensing deals covering everything from iPods to cell phones has focused much of the recent public debate over windows on the TV side of the business. But stay tuned.

Sonic Solutions recently acknowledged working with studios on a system to burn DVDs for retail deployment in market locations (VB, 11-21). And though initial deployment would likely be via retail kiosks, the technology is equally capable of facilitating direct-to-consumer downloading for at-home DVD burning.

Such a roll-your-own model could make the consumer download market more akin to video sell-through than to pay-per-view, which it currently parallels. And that, some studio executives believe, could be an argument for making downloads available in the DVD window.

“Every studio is poised to sell movies on a download basis,” a high-ranking studio exec said. “But it isn’t going to happen until Wal-Mart says OK. We’ve talked to them.”

And to be sure, with more than a third of all DVD sales going through Wal-Mart stores, the retailer has virtual veto over any move to shift, effectively, the download window. But it’s worth noting that traditional video-on-demand providers also are pressing studios to move up their release window.

As for kiosk disc burning, the promise of cost savings from not having to manufacture DVDs could become simply irresistible.

“When [shifting windows] happens, it will be a minimum of four studios announcing on the same day,” the studio exec said. “No one wants to be seen by Wal-Mart as being the instigator.”

A download-to-burn model also might provide the studios with a work-around for another vexing problem currently limiting the growth of the paid download business.

Under the current rental model, movies are available for download only during the pay-per-view window. Once a movie reaches the exclusive pay-TV window, it can no longer be offered for download.

Online retailer Netflix recently postponed the launch of its movie download service because the limited PPV window would not allow it to offer customers the sort of deep selection available to the retailer’s DVD customers.

Meanwhile, the download window isn’t the only one under scrutiny. Both the Blu-ray Disc and HD DVD formats are expected to incorporate a system of multiple watermarks that some proponents hope could be used to further tighten—or even eliminate—the window between theatrical and DVD release.

One watermark would be embedded in the digital audio track of theatrical prints and would be picked up by a camcorder or other recording device used to copy the movie from the screen. The new players would then be equipped to detect the marks and would refuse to play back any disc or downloaded file that contained it.

A second watermark would be inserted into legitimate discs or other “trusted sources.” If the player failed to detect that mark, it would again refuse to play back the movie.

Studios claim the watermarks simply represent an additional anti-piracy measure. But others involved in the development—in particular software giant Microsoft—have indicated they hope to persuade the studios eventually to use the watermarks to move up the DVD window closer to the theatrical release date.

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By keeping the high-def DVD market free of bootleg copies, they argue, the studios could safely offer movies on disc day-and-date with the theatrical release.

“[Microsoft], Comcast and a host of other companies are trying to break the current linear window release system,” Microsoft VP digital media Amir Majidimehr said in a recent posting on an Internet discussion board. “Ultimately, there should be no reason I can’t view a disc worldwide the day it comes to theaters. Bootleggers are already making this possible. So we hope legitimate means become available just the same.”

Such a move would pose the same sort of political problems with theater owners that the studios face now with Wal-Mart.

But technology, if not the will, is starting to fall into place.