For an informed view on connected entertainment in the UK & Ireland, visit Cue Entertainment
It’s easy to believe that US trends in entertainment will inevitably cross the Atlantic. Announcements of new products and services appear with increasing frequency and, thanks to the internet, they are read in Britain as quickly as they are issued in the US. There are significant differences, however, in the words we use to express our thoughts and ideas.
Oscar Wilde noted 125 years ago (in “The Canterville Ghost”) “we have really everything in common with America nowadays except, of course, language.” Skill in reading between the lines is essential in order to decipher which innovations will translate into the UK home entertainment market.
For example, most people here think of NATO as the military organisation set up at the end of the war but the initials also stand for the National Association of Theatre Owners, which represents cinema operators in North America. Last week, they released a statement on the “premium Video On Demand window”, a topic much discussed over there since the federal regulator approved a way for cable companies to control the output of consumers’ set-top boxes (STB).
Kiosk rentals have already eroded the long-established theatrical window of 120 days so NATO is concerned about the potential loss of revenue that could follow the early release of premium titles to Video On Demand (VOD) channels. “Every ticket sold in the theatrical window can be effectively priced,” NATO claims, “How many viewers per household will watch each premium-priced VOD offering? Three? Five? More?”
The MPAA has given its approval to the new premium VOD window with the proviso that cable companies apply new content control software, which has been installed but not implemented in all US STBs since 2004. Known as “Selectable Output Control” (SOC), the system closes what has been called “the analogue gap” – the ability to plug a conventional video output into a computer and create a digital file that can be shared online. From now on, the cable company can switch off analogue output whenever the MPAA requires it, restricting the user’s ability to create an unauthorised copy.
NATO is not convinced, saying: “A premium VOD window will neither solve the DVD slump nor end the problem of film theft. Technological locks will be overcome with technological crowbars and earlier availability of pristine digital copies will facilitate and proliferate illegal duplication.”
Reminding the industry of the ongoing need for investment in digital and 3D projection, the cinema owners express their concern that what they call “unilateral tampering with business conditions”. They fear it will undermine their revenue stream and jeopardise what they describe as the industry’s “highest value distribution channel.” NATO calls for a dialogue with all elements of the industry – creative, production, finance, distribution, exhibition, and home media – before a new premium VOD window is introduced.
This is more than a little local spat. From a UK perspective, any move that has the potential to create a supply of high-quality illegal copies shortly after the first run of features in American cinemas has to be a concern. Although SOC is unlike other copy protection in that it is not an encryption algorithm waiting to be cracked, it will undoubtedly facilitate copying by those with a mind to do so. After all, there will be no need to worry about finding a central seat or people walking in front of your camcorder if you are pointing it at a high-definition TV screen in your living room.
Britain’s cinema chains continue to invest, regardless of the challenge from online delivery. Odeon and UCI said in March that its 800 UK screens will be digital by 2012 and now has come the news that Cineworld is to convert all its 77 cinemas to digital, giving the operator a total of 525 new screens over the next three years. The transformation will reduce operating costs and in addition to the ability to show 3D on 40% of the screens it will allow counter-piracy technology to be implemented.
The days of the pirate camcorder lurking in an aisle seat might well be numbered but the audience for online delivery continues to rise. Internet research organisation ComScore reports that 80% of us watch video online and when BBC Radio 4’s “Film Programme” spends 10 minutes telling us how to do it, the remaining 20% cannot be far behind.
Teun Hilte, co-founder of digital distribution company Content Republic, told the BBC, “The film industry has traditionally kept in place artificial windows, which become more and more meaningless with the advent of the internet. Whether you release a film two months or three months after on DVD is actually quite irrelevant if people can download it on Day 1 through illegal peer-to-peer websites.”
Asked if there will be a big fight between the studios over which of them has the best outlet to the internet, Hilte said, “The battle started a while ago. It’s about who controls access to the households and there are a couple of front-runners. Most likely, there will be two or three providers that will serve 80% of downloads, transactions or streams. There is also going to be some space for niche players to provide a specific service for special interest films.”
Hilte recommended the PS3 videogame console as “the ideal conduit between the internet and your television,” having expressed his view that “DVD is not going to be around for ever. Online entertainment is the next way that people are going to be accessing entertainment.”
Back across the pond, Logitech revealed this week that the “companion box” for Google TV (and potential competitor for Project Canvas) is to be known as the “Logitech Revue” and will be available initially only in North America. It is aimed at homes without an all-in-one TV set.
The company boasts: “Revue is a type of multi-act theatrical entertainment that combined music, dance and sketches – wildly popular between 1910 and 1930. Logitech Revue combines everything on the web, cable or satellite content, apps, video calling and more that will be wildly popular between 2010 and 2030.”
Won’t that be nice.
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