Internet Movies Special Report
Cinema Now or Later?
Posted on: 10/12/2001 @ 1800
Subject: Downloading movies from CinemaNow.com
In recent news articles we learned that CinemaNow relaunched its Web site with a custom version of Microsoft's Windows Media Player and begun to offer downloadable movies in addition to their streaming movies.
CinemaNow recently launched PatchBay, a video on demand system built on Microsoft's Technology. PatchBay uses Microsoft's digital rights management (DRM) technology.
Two different deals have been announced in the past few months between different Hollywood studios. Hollywood is saying they are going to start releasing their films on their websites about the time that it would appear on pay-per-view systems which is anywhere from two to four weeks after it is released on video/DVD. But still no word on whether they will ever use current distribution channels like CinemaNow.
We decided to test out CinemaNow's new downloadable movie service. First we visited CinemaNow and located their downloadable movies section. Their web site is laid out well and is very easy to navigate.
The process was exceptionally well thought out and professional. We located the movie we wanted to download and clicked to download. A small window then launched explaining the process. It took us step by step through system requirements that we would need to watch the movie and even tested our system for us to be sure we had all the required components needed.
Next we were presented with a screen containing purchase options and an area to accept our payment information. The payment options were as follows:
$1.99 : 48 hour unlimited access to this movie.
$9.95 : Premium Pass monthly subscription for unlimited access to all movies (except new releases).
We choose the first option and entered our payment information. Our payment information was accepted and we continued on to download the film.
The download process worked great. The download information was contained right in the small open window including a progress meter and all. The file size was only 450 Mb compared to most DivX downloads we have seen that run around 650 Mb. The file downloaded at 400 K/sec., which is the top speed for the DSL connection we were using. In fact the download was done in less than 2 hours.
Once the download was completed it was time to check out the quality. We must admit we were a bit concerned because it was all encoded using Windows Media and we have always been under the impression that DivX was better. To say the least we are completely satisfied with both the video and the audio quality of the file we downloaded.
Now about the DRM that is part the file we downloaded. The DRM works great. The movie played for 48 hours after the first time we played it. After the license expired and we tried to play the movie up popped the friendly window from CinemaNow with the payment options.
What we like most about the way the DRM works is that we could share this file with others online via P2P or any other means and the original distributor would still be selling the access. I think this would make the most sense as a distribution channel. People are already trading movies online through several channels so all Hollywood needs to do is release their movies protected with this DRM technology to companies like CinemaNow and let them distribute the movies. This way no one company will have to carry all the bandwidth. We can all continue to use the same channels we do now. This in itself would be the best defense against piracy. After all if I use my favorite P2P program and download a large movie file then click on it and up pops a window asking me for $1.99 to view the movie what am I most likely to do? Will I delete it and go looking for another place to download the file wondering if it will be protected as well or will I just pay the $1.99 and enjoy the movie?
It is notable to mention that the file we downloaded could easily be renamed something like bigmovie(DivX).SCR.AVI and released on P2P networks. As I said above this could be effective in fighting online movie piracy. If Hollywood released their films to 3rd party distributors like CinemaNow they would most certainly infiltrate the current distribution channels and users would pay.
When we decided to do this report we contacted CinemaNow to let then know we were going to do a small write up on their new service. Jared Goldsmith Director of Marketing responded immediately offering to answer any specific questions we might have. We did not have a lot of questions specifically about CinemaNow since all of the information we needed was provided by their web site. We did however decide to send him some questions that we thought our members would be interested in getting some input from CinemaNow.
Here are our questions and the answers as provided by Curt Marvis CEO CinemaNow:
Q) In general what do see as the future for CinemaNow?
A) For CinemaNow to succeed as a major independent distributor of video on demand.
Q) What is your idea of the ultimate distribution channel for feature films online once released?
A) I'm not sure what you mean, but it is for the largest capacity servers with access to as many films as possible served on robust high speed networks
Q) How do you feel about the growing problem of Movie Piracy online and do you feel that it has impacted your company?
A) I think the problem is overstated. All the films we have are already out on VHS and/or DVD and this is the outlet for pirates to steal from. (i.e, the genie is already out of the bottle before we put it up online). Until distribution windows online preceed theatrical and DVD, this problem will stem from those copies of the films. Piracy is best countered with a combination of better quality of service and marketing form the legitimate distribution entities combined with legal enforcement.
Q) Can you explain why Hollywood Movies have been so big at the box office setting several new records this year yet the industry is claiming hugh losses due to online piracy?
A) Piracy is a huge financial loss regardless of the box office amounts. It particularly hits home video and DVD in territories outside the US.
Q) Do you agree that Hollywood is somewhat to blame for piracy because of their refusal to release films on-line?
A) Initially, perhaps, but that will change as soon as services like CinemaNow become more familiar to people.
Q) Do you think Hollywood will start releasing their films to the online community any time soon? How do you think that will take place?
A) I think you will see this before the end of 2002.
Q) If Hollywood does release their films online but not until weeks after they are released on DVD/Video do you think that it would be successful?
A) Yes. There is still a huge market in television (Pay, Free, Syndication) after the Home Video release. I think the same holds true online.
Q) Do you think a day will come where we would be able to download and view a newly released film at the same time it hits the box office or slightly before as consumers do now with pirated films?
A) Perhaps. But that remains many years down the road. We're not close yet.
Q) Any other comments?
A) We see this as yet another distribution window/channel. It should co-exist and strengthen that overall revenue picture for films in the same way that Cable, Home Video and PPV have done in the traditional space. Bottom line, there is a great thirst for content received by a wide variety of means by the end user. We think online VOD is the next big one.
In conclusion CinemaNow has a well-rounded service. We really had no trouble at all with any aspect of their service and found it very professional. Too bad there are not any major films to download. We all continue to wait for Hollywood. I find it strange that most businesses are formed by their consumers demand. Well the movie industry has a huge consumer demand for downloadable movies and there are numerous sites that want to distribute their films yet they continue to look for ways to control their consumers and demand that consumers do what they ask in order to watch the movies. That in our opinion is what has created the huge trend to download pirated films. If I am able to download and watch a movie that is in the theater in the comfort of my own home I feel like I have the power to choose. I was not forced to go to a building full of people because that is the only option. Consumers just want the choice. We are not cattle and do not like being herded.
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