BY LEVI SHAPIRO Screenwriter William Goldman famously remarked that in Hollywood, “no one knows anything.” While most interpreted that remark to mean, “Studio executives are [expletive],” Goldman was actually describing the difficulty in predicting a hit. Today, that phrase could just as easily be applied toward selling downloadable video via the Internet, or Electronic Sell-Through (EST). At the moment, studios and TV networks are using EST as an ancillary advanced media platform. Among the major American TV networks, ABC was early to this sector. Since October 2005, ABC has sold nearly 35 million TV show episodes via iTunes. Karen Hobson, vp of Corporate Communications at Disney ABC Television Group, described ABC’s strategy as a combination of delivery platforms. “Consumer-paid [EST] lives in harmony alongside our ad-supported content at ABC.com. There is no advertising of any kind on iTunes, and prices range from $1.99 per episode to $34.99 for an entire season.” In January, Apple extended its video offering with iTunes Movie Rentals. The service carries over 1,000 movie titles, priced at $2.99 for library titles and $3.99 for new releases. NBC may have pulled its TV shows from iTunes last year, but its sister company, Universal Pictures, continues to partner with Apple. According to Michael Bonner, svp, NBC Universal Digital Distribution, “the next few years will be about the convergence of the PC and TV. NBC is looking for partners that are willing to be flexible about developing innovative packaging and pricing models. We launched on Amazon eight months ago with seven different brands and 90 television series. We want to get our content across in as many ways as possible while protecting the core business.” Since 1999, the core business at California-based digital video distribution company CinemaNow has been Electronic Sell-Through. Curt Marvis, CEO of CinemaNow has learned the hard way what the industry needs for market growth. “Two things need to happen,” commented Marvis. “Ubiquity of content and a consumerfriendly price point. This is the Holy Grail and it will happen in the next twoto-four years.” That wasn’t soon enough for Webbased video-on-demand service, market has evolved very quickly. This is really all about interoperability... providing ease of use with a DRMinvisible product.” Hulu and Joost espouse an advertising-supported approach. “We can’t really compete with free ,” said Christina Lee, director of Corporate Communications at online VoD service Hulu. Launched in a private beta version last October as a joint venture between Newscorp and NBC, Hulu offers premium content from hit TV shows, as well as Sony and MGM films, with embedded commercials. “We are V I D E O • A G E AP R I L 2 0 0 8 28 E l e c t r o n i c S e l l - T h r o u g h Hollywood Goes EST MovieLink, which raised over $100 million from Warner Brothers, MGM, Paramount, Universal, and Sony but sold to Blockbuster last year for less than $20 million. More recently, Blockbuster ponied up $2 million to Paramount during the Christmas period for an exclusive 10-day window in which to offer Paramount’s Jackass 2.5. According to Alex Carloss, evp of Digital Media at Paramount Pictures Digital Entertainment, “This was a winwin for both companies. We exceeded our download projections. Jackass 2.5 was also the number one download on iTunes for several weeks. We have found Electronic Sell-Through to be another way to reach the younger demographic It has been excellent for films in the catalogue like Zoolander , School of Rock, Mean Girlsand Jackass .” While studios and networks continue to experiment with EST, others continue to champion subscription and ad-supported business models. Starz Entertainment’s evp of Advanced Services, Bob Greene, believes “Subscription will still be the dominant delivery mechanism for long-form content like movies. Over time, this will grow, but at this point EST is a blip on the radar screen in terms of the impact on rights holders.” Two years ago, Greene oversaw the launch of Vongo, a subscription service that delivers movies and other video content to PCs and portable devices. “The Curt Marvis, CEO of CinemaNow Michael Bonner, svp, Universal Digital Distribution It may be true that for Electronic Sell-Through, “no one knows anything.” What is clear is that the consumer will help lead the discussions on what the new business model should be. Bob Greene of Starz Jackass 2.5 photo credit: MTV trying to aggregate all of the world’s premium content, making it easily available and on user’s terms,” she said. Hulu can be seen through partners like MSN, MySpace, AOL, Yahoo, Comcast Fancast, as well as via the self-service model in individual blogs. “Traditional television has demonstrated that people are willing to watch advertisements within premium content. We have our own ad sales team that is working with advertisers and listening to consumer feedback. This is more Silicon Valley than Hollywood,” said Lee, noting that Hulu CEO Jason Kilar came from Amazon. It may be true that for Electronic Sell-Through, “no one knows anything.” What is clear is that the consumer will help lead the discussions on what the new business model should be.
RkJQdWJsaXNoZXIy MTI4OTA5