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Hollywood joins the party

April 3rd, 2006

Hollywood fought electronics manufacturers first over the VCR and then over the burnable DVD.

When it comes to the Internet, it looks like they’re finally getting smart…

Digital distribution of moving pictures is already taking place whether Hollywood likes it or not.

A huge
underground of hobbyists "rip and burn" DVDs and share them on the
web via Bit Torrent and other networks.

Today, Hollywood announced that since it can’t beat them, it’s going to try to join them with a new approach to distributing movies from MovieLink.

This isn’t a wild-eyed dotcom founded by two guys in a garage.

MovieLink is a consortium of MGM, Parmount, Sony, Universal, Warner Brother and 20th Century Fox.

As of today,  the service lets you download movies for rent or purchase, but there’s a catch: you can’t burn them to a DVD and watch them on your television set.  The idea is that you’ll be limited to watching "the product" on your computer. (Hollywood is afraid of diluting its market.)

Also, if you don’t run Windows 2000 or XP, you’re out of luck. Hollywood likes the restrictions on viewing and copying the Microsoft platform offers.

I predict both these limitations will be removed eventually. In fact, hobbyists have probably already created workarounds.

In the meantime, what’s the significance of this news besides the fact that it adds yet another nail in the coffin of the traditional video rental business?

It’s this: Video on the Internet is fast on its way to becoming a common, every day, bread and butter deal and this new service is just going to speed the trend.

By the way, movie theater attendance fell 8% last year.  That’s a huge number that I’m sure has gotten Hollywood executives thinking…

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  1. April 12th, 2006 at 23:47 | #1

    Hi Ken: Is there any truth to the rumor that Microsoft released an update to their Internet Explorer browser software yesterday that broke a lot of Windows Media video pages? Here’s an excerpt from another newsletter that I subscribe to:
    Yesterday (April 11) Microsoft released their Internet Explorer update that changed the way “active x” controls integrate with video (they did it because they got sued over a patent).
    Thanks Ken!

  2. April 13th, 2006 at 13:51 | #2

    I’ve heard about this, but I don’t know the details.
    As I said to an audience at Perry Marshall’s Traffic and Conversion Conference in Chicago last weekend, there are going to be dozens of episodes like this in the months and years to come.
    Like the original PCs, the original TVs and the original automobiles, everyone is going to be angling to set the “technical standard.” Lawsuits, claims, counterclaims, incompatabilities, bankruptcies, acquisitions. You name it.
    Then it will stabilize. Meanwhile, it’s going to be messy. (Note: A lot of money gets made in the messy times while everyone else sits on the sidelines…)

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