Little big screen

Nov 18, 2002  •  Post A Comment

The biggest story in Hollywood last week was the engagement of Jennifer Lopez and Ben Affleck. It will be his first divorce; her third. The second-biggest story was the launch of MovieLink, the studio-backed Internet movie service that many analysts believe has even less chance of success than the Lopez-Affleck merger.
MovieLink.com, which was formed by MGM, Paramount, Universal, Sony and Warner Bros., is now offering more than 170 titles for $1.99 to $3.99 each, including “A Beautiful Mind,” “Ocean’s Eleven” and “Hart’s War.” Each film, which can be stored on the computer’s hard drive for one month, can be rewound, fast-forwarded and even paused like a DVD or a TiVo.
However, who will sit down in front of a small PC screen for two hours to watch, let’s say, “Hart’s War”? Isn’t it difficult enough to sit through the Bruce Willis dud in the comfort of a Barcalounger?
Well, aside from a bunch of college students and adults who live in their basements and suffer from various social disorders, the answer is no one. Watching a movie-any movie-on a PC is like wearing a pair of jeans that are three sizes too tight. Due to stubbornness or vanity, you may pretend that it’s functional, but you’re uncomfortable the entire time. The Hard Drive-In Theater business is doomed to fail because it could not be a more unpleasant experience.
So are the studios crazy?
No, they couldn’t be smarter.
Reel Spin
The studios believe that MovieLink will help them take control of the video-on-demand business-before it takes off. Many cable TV operators have just added VOD to their lineups, but some industry analysts are predicting that on-demand films will eventually force the local video store out of business. By launching their own distribution channel, the studios believe they can pressure the cable ops to pay higher licensing fees for VOD films.
The strategy is brilliant, particularly when you consider that high-speed Internet connections will be added to TV set-top boxes in the next few years. (Sony and Microsoft have already launched broadband versions of their TV-based video game consoles. Sony, a MovieLink backer, could offer the on-demand service at any time to nearly 500,000 online PlayStation 2 owners.) With Broadband TV, a MovieLink subscriber could download a film from thousands of selections and bypass the cable or satellite operator. (Satellite TV operators currently do not have the technical capacity for VOD, but that could change.)
For the studios, which have grown weary of licensing battles with video rental chains such as Blockbuster, MovieLink is worth the risk even if it loses considerable money over the next two years. If their gambit works, they will be in a position to call the shots on VOD. Knowing what they know now, if they had had a similar opportunity to counter Blockbuster in 1985, they would have taken it.
Of course, studio spinmeisters say they have rolled out the online service because there are now approximately 20 million homes with a high-speed Broadband connection. Presumably, after a hard day of work, a Broadband user will come home, download a new video release and view it on his or her PC screen.
“We believe the market is now ready,” says Jim Ramo, MovieLink’s CEO and a former DirecTV executive.
I like Jim Ramo. At DirecTV and later at TVN, the video-on-demand provider, he exhibited a keen understanding of the marketplace. However, his comment is about as believable as John Wayne as Genghis Khan in “The Conqueror.”
Jupiter Media Metrix, an industry research firm, says that VOD ranks far below other services consumers say they want from broadband, such as always-on connections and downloading files at high speeds. GartnerG2, another research firm, projects that the Internet will account for only 2 percent of movie revenues by 2005.
“When you can sit down on your couch with your kids and have a beer and watch a sitcom on your PC, then VOD will be successful on the PC,” laughs Jeff Binder, CEO of Broadbus, a provider of video-on-demand systems for cable operators.
Ramo and the studios know this, but they can’t say it. They have to argue that consumers will watch films on the ‘Net for two reasons: (1) To increase their influence with the cable operators, they need to generate as much revenue as possible during the next few years; (2) They certainly don’t want to expose their grand strategy to the public.
In addition, Ramo says that MovieLink will help the studios eliminate online piracy because they will control the distribution of the films.
But MovieLink is not about piracy. It’s about power.
Phillip Swann is president and publisher of TVPredictions.com. He can be reached at swann@TVPredictions.com.