LAS VEGAS –- Buckle up movie mavens, consumers are itching to take you for a ride.
Discussions at this week's annual meeting of the National Association of Television Programming Executives focused not so much on digital rights management and security, but on developing tracking applications that would identify pirates after their works were stolen.
"Encryption and watermarking won't keep people from stealing content, but it will make it easier to track and prosecute," said Doug McIntyre, CEO of On2it.com. "Big companies don't want webcasters and consumers to actually have the content."
McIntyre acknowledged that digital rights management would struggle to succeed until content companies agreed on universal solutions that would allow consumers to easily access any media.
Basically, the movie and television industries hope to avoid the pitfalls of the recording industry.
Pundits often point to the recording industry as the pioneer of the digital age, forging ahead to create business models that will be mimicked by television and movie executives. But the visual media are hoping to find more effective models on their own. And they understand that their problems are different from those in the music industry.
For instance, while music companies talk of branding artists -- who might then be able to leave and parlay new fame into success away from the labels -- movie companies don't have the same worries.
"With six million broadband users, that gives you just enough critical mass to look at the Internet like Blockbusters and HBO," McIntrye said. "The studios have the opportunity to go straight to the viewers."
Not everything is different, though. Like the recording industry before it, the studios and networks would like to control most of the portals where people go to find their media. McIntyre said most studios want there to be large destination sites where movies are streamed on-demand.
But even similar situations have different permutations.
"There is difficulty in comparing the recording industry and the movie industry," said Vince Van Petten, executive director of the Producers Guild of America. "It is so important to sell that first use for movies for the economics model of the industry. You have a serious, serious problems when it becomes easy to download movies. That's why we are relying so heavily on digital rights management and security."
In other words, moviegoers often pay to see a movie in the theater once. If they can find that movie online for free, the economic structures of the industry could collapse.
New technology is important for the movie industry, but only if there are checks and balances for the studios.
Proponents of peer-to-peer distribution methods point to the much-ballyhooed Sony Betamax case that legitimized the VCR, allowing consumers the ability to tape and distribute movies. But Van Petten argued, the studios always maintained control of that medium.
He said the studios have maintained an 80 percent royalty fee from the video industry since 1984. Also, the costs for creating video chains, developing the hardware and retail markets proved too cost prohibitive for more than a few players to get involved.
"Studios have controlled the market for video tapes because the distribution methods weren't there," said Howard Weitzman, CEO of Massive media group.
Consumers used to wait for weeks for movies to move to cheap theaters, another period for cable, and finally to television. However, people now want their content on demand, and when they can't find it, they go look for ripped versions.
"The studios are concerned that they'll lose control if they lose the ability to touch the content, like a DVD," said Howard Weitzman, CEO Massive media group. "We're never going to eliminate piracy, we just want to put them back in the dark. Today, they are doing it in the light, studios want them back in the dark."
It might be impossible to push them back, according to Lisa Crane, managing partner for Media Venture Advisors. The new open-source DivX project offers an improved version of MPEG4, allowing people to download a 2-hour movie in about 15 minutes.
Crane knows a bit about the affects of the digitization of music. Before coming to the consulting firm, she was the CEO of interactive music company Soundbreak.com. She also continues to serve as a paid consultant for the Recording Industry Association of America.
So when she says that might not mean the sky is falling on the movie industry, she has some practical knowledge.
"I don't think everyone will have broadband in the next few years," Crane said. "But even if they did, I don't think that means that will allow there to be a bazillion pirates. Music sales haven't dropped, and with two billion music files on Napster, you would think that it would have."
