Saturday, May 03, 2008

Studios change rules of distribution

Ubiquity trumps piracy fears in digital age


Movies used to progress through ancillary windows in orderly fashion. But nowadays studios are following a mantra straight out of an old Blondie song: "Anytime, anyplace, anywhere, anyway."

Determined to give consumers as many options as possible, studios are distributing pics over as broad an array of platforms as possible, many of them simultaneously. In the digital age, the need for ubiquity seems to trump piracy fears.

Another flurry of high-profile digital initiatives surfaced last week, ranging from an online revival of the WB network to major studio deals to sell movie downloads through Apple's iTunes Store. Hulu, which had restricted sharing of its video content, set up a YouTube channel for clips that have embedded Hulu ads.

"The single most important thing," News Corp. prexy Peter Chernin said at the Milken Institute Global Conference last week, "is making content available ubiquitously -- and for a reasonable price."

That way, Chernin points out, there's less demand -- incentive -- for pirated content.

"Piracy is always a major concern in every deal," says Lionsgate prexy Steve Beeks, whose company joined the majors in inking an iTunes sales deal and is a major investor in the CinemaNow service. "But Lionsgate strongly believes that the best way to attack piracy is by giving consumers alternate ways to consume media."

Warners has also been aggressive about expanding its reach through dueling distribution strategies, and last week, Time Warner topper Jeff Bewkes talked up the results of its experimentation with collapsed VOD windows.

"We think it's extremely important that we have as many legitimate options available in the marketplace as possible," says Warner Bros. prexy of digital distribution Thomas Gewecke.

Traditional bricks-and-mortar rentailer Blockbuster, meanwhile, has been busy trying to reinvent itself as a sell-through business. The Dallas-based chain is mounting a bid for Circuit City, another struggling retail chain, and even surfaced as a potential partner in the pay TV net Paramount, Lionsgate and MGM are trying to launch.

Wall Street has been unimpressed, advising Blockbuster to focus on turning around its existing business. But Chernin suggested topper Jim Keyes had good reason to be scrambling. Noting that VOD, PPV, DVD and electronic sell-through all provide the same level of profitability to Fox, he dropped this tidbit: "What we do want is pay-per-view to replace video rentals."