It is more than possible to be blinded by science - or business jargon - when discussing new media trends. Everyone will remember the hype that surrounded the rise of the dot coms and perhaps share some of the schadenfreude that accompanied their collapse.
Let's not forget that digital distribution was very much part of those original dot-com plans: online sales, virtual film festivals etc were all mooted at the height of the internet hype.
Grand ideas back then had two big problems: the customer didn't understand them and the technology was nowhere near sophisticated enough to deliver on excited promises.
It's important to remember also, however, that the internet has changed our lives to the point where some part of almost everyone's lives in Europe has been transformed (not always for the better).
Businesses that affect our day-to-day work in film are now established from online trade papers to DVD rentals.
For all the confusing new acronyms and talk of new platforms, digital distribution, is no more than the ability to shift around product through electronic files without the need for physical product and its attendant costs.
That simple fact brings two straightforward benefits
» The ability to efficiently reach audiences in new ways
» The potential to do so at lower cost
The term 'new media' is itself a telling misnomer. The internet has been used for commerce for more than 20 years now and some of the biggest companies in the world are now based online.
DIGITAL CHANGE IN ACTION
It is best to start with what digital distribution actually can actually deliver now.
Digital cinema gets its own chapter but the most disruptively profound change comes in taking product to a much more demanding audience when and where they want it.
That's a big deal for cinema, which has always been a top-down enterprise. The digital era allows customers to rewrite the rules - not only by having control of what they see where, but also allowing them to sometimes take a hand in the production or distribution of content.
It's easy to be dismissive of user-generated content but we are creating a generation who have made these media part of their lives.
A growing number of particularly younger film-makers are eschewing the traditional film industry to find their own means of expression and entirely fresh business models.
For the purposes of this report, the argument is that the pattern of new media is now firmly established and the technology relatively stable and tested in the heat of commercial battle.
There will be many variations on a theme but the areas we will briefly look at here are:
» Video-on-demand (VOD)
» Download-to-own (electronic sell-through) (DTO)
» Download-to-rent (DTR)
» Internet Protocol Television (IPTV)
VIDE0-ON-DEMAND
The biggest digital distribution arena is the set of disparate technologies and businesses lumped together as video-on-demand (VOD).
Video on demand (VOD) is normally regarded as the most promising home entertainment format. It's a broad term, often used to describe a plaform that offers customers a wide choice of film to watch at their own convenience.
True VOD puts the choice of time and, increasingly, watching device down to the customer. The other key distinctions are between streaming and downloading - both of which are key parts of the VOD plans.
» Streaming means watching a file in real time as one does with television
» Downloading means storing a file either permanently (electronic sellthrough, download to own) or temporarily (download to rent) to watch at the customer's own convenience.
DOWNLOAD-TO-OWN/ RENT
In the rapidly maturing US market, the downloading market picked up pace at the start of 2008.
The battle has started in earnest between the really big players in the field, such as Netflix, an perhaps most interestingly Apple, joining the fray.
Other contenders have left the field, notably supermarket giant Wal-Mart, ostensibly over technology issues but also perhaps recognising that mass-market downloads will become dominated by a few giants chasing for the biggest piece of what is, for now, a fairly small pie.
Downloading is simply the transfer of files onto a hard drive of a computer or other device.
There are two main businesses:
» Download to rent, where the file can be played for a short period of time.
» Download to buy where the files can be kept permanently.
It is the latter where the studios believe the real money lies, mirroring the situation with DVD.
Significantly, Hollywood has done DTO deals - know in the US as electronic sell-through - with a number of major companies, but not Apple, which it fears may yet exert the kind of dominating control that transformed the music industry.
Download-to-own deals have been negotiated between studios with a number of European companies (see new media players).
IPTV
Internet Protocol Television (IPTV) is basically television broadcast using broadband over the web.
Streaming media is what's been powering clip sites, notably YouTube, but IPTV has a promise that goes still further. Its advocates promise to take on traditional broadcasting.
For film-makers, IPTV opens up the potential of a new route to market and potential commissions.
At this early stage, there's little sign yet of a serious content strategy to challenge conventional broadcasting.
Indeed broadcasters themselves have been experimenting with streaming their own programmes, either as catch-up services or pilots.
In Europe, a good example is the UK's BBC iPlayer. The missing link is widely considered to be a device that allows IPTV to transfer at adequate quality to television sets.
MOBILE
Mobility is a so far largely unwritten story for European cinema.
Mobile entertainment is at the heart of the entertainment strategies of a number of major businesses, including technology giants Apple and Microsoft and some Asian countries, notably Korea and China, are ahead of the world in take-up ofmobile entertainment.
Yet Europe ought to be ahead of the game as a one-time leader in one of the world's great technological revolutions - the mobile phone.
The Nordic countries lay at the heart of innovation in the field through companies such as Nokia and Eriksson.
Like digital film distribution, it was driven by innovators who took risks and helped drive the market. Europe was a leader nota follower.
It has not been a failure of technology that has held back the continent this time either. Digital innovations have continued to come from European companies.
But the film industry has failed to seize the business potential.
The comparison between Europe's ability to ride that technological wave and its hesitancy during this period of burgeoning convergence in the digital arena is not lost on the European Commission.
In fact, the Commissioner for Information Society and Media, Viviane Reding, has made direct reference to the problem with regards to the development and take-up of mobile TV.
The Commissioner points to the industry's early adoption of a single standard - GSM - as the key to Europe's global success in mobile telephony Consequently, the Commission regards a coherent, integrated and proactive approach by industry and the adoption of a single standard for mobile TV as essential if Europe is not to miss the opportunities offered by this very new market.
Commissioner Reding has described the advent of mobile TV as being a 'paradigm shift' in how we view content and 'a tremendous opportunity for Europe to maintain and expand its leadership in mobile technology and audiovisual services'.
As such, the Commission is determined that Europe should not lose any further ground to competitors such as South Korea.
THE PLAYERS
Currently there is a wide range of providers of some sort of VOD - some 150 or so in Europe, according to the European Audiovisual Observatory.
The evidence suggests that, as in most mass entertainment media, a few giants will come to dominate territories, eating up rivals through acquisition.
We can see it clearly in the rapidly-maturing US market, where business has picked up pace since the start of 2008.
These developments have coincided withthe rise of niche services, serving specific demographic or cultural groups - and that will no doubt be the general direction in Europe.
But for European content owners, this is a period when they are having to work out who they will be working with - or more specifically who they will be selling to - in the coming years.
What has become obvious is that seriouscorporations are now treating these new technologies as amajor part of theirbusiness.
»TELEVISION
The central role ofEuropean television schedules for film has been disappearing for some time.Network television has found more profitable and higher-rating avenues in quizzes, reality shows, cookery programmesetc.
Even in European countries where there is a legal obligation to commission film, enthusiasm has flagged and films are often relegated to graveyard slots.
Nonetheless, television is keen to ensure that other forms of homeentertainment do not erode its central place in the living room.
So biggerTV players have adopted a two-tier strategy.
Firstly, they often demand that they are given all rights, including digital reuse, when purchasing rights - cutting off potential new revenue sources for rights holders.
Secondly, they are themselves launching VOD services, particularly where they are part of multimedia conglomerates,such as the Bonnier-owned SF group in Sweden, which has interests inTV, cinema exhibition, and now online services.
For content owners, this is a difficult area. During the last few years, the value of television pre-sales -an essential foundation for production finance - for most independents has been falling.
The question is how to deal with the TV businesses who want all rights while at the the same time paying less money than they did in the days of linear network television.
Financial experts are generally agreed that trying to sell to television companies without digital rights thrown in will probably mean a dramatic cut in prices or no deal at all.
»TELECOMS
The telecoms businesses have been desparate for some time to find potential revenue replacements for their call businesses, which have steadily been eroded.
There is a natural fit of sorts in that the telecoms companies - often in previous incarnations as state-owned communications corporations - have been responsible for the installation of broadband networks.
It seems only logical that the pipeline into consumer homes should be exploited more thoroughly. Home entertainment hubs have been the talking point for some years.
The buzz term is 'triple play' where a telco can bundle calls, VOD and IPTV into one handy package.
What that means for the film industry is less clear because there has been a lot more talk than action but that is changing. Hollywood studios have now signed content deals with a number of European telecoms companies.
Some telcos have even moved into commissioning. France Telecom has created a co-production unit which will be involved in the production of French and European movies and catalogue acquisition rights of films.
Most have introduced, or plan to introduce, some form of VOD services; the UK's BT Vision being a good example.
However, any telecoms company moving intothe film acquisitions will be enetring a cutthroat world in which most have little experience. What's more, they will be competing against all the players outlined here.
ManyEuropean telcos were formerly the state-owned departments running old-telephone exchanges, with a big injection of capital following privatisation and the rapid consumer adoption of both mobile phones and broadband.
The move into full-blown entertainment companies remains a big leap.
» APPLE
Apple has major advantages over its opposition, chief among them is that it has a track record of matching technology to customer demand.
In a largely device-led market, Apple gets the need to be there with a product. It has the three business necessities: a device, an integrated network and reliable, user-friendly software.
It has threebigdisadvantages in its quest for European film domination however; it relies on a set-top box - Apple TV - to transfer downloaded movies to television; it has to overcome a complex jumble of rights and licensing regulations in the continent; and most of all everyone knows hopw Apple turned the music business on its head, including film companies which are often part of conglomerates which include music.
Letting Apple secure a stranglehold on the film business is a nightmare scenario for many and it is no surprise that sutdios have so far agreed only download-to-rent deals in the US rather than download-to-own.
Nonetheless, it would be foolish to discount a business with Apple's track record.
For independent producers, it is not clear what an Apple-dominated world might mean but the experience of the music industry is that iTunes has been alot better at creating buzz and efficient distributionthan paying premium rates for content.
» ONLINE DVD RENTAL
The DVD online rental market came out of nowhere. It was the simplest of ideas and perhaps among the first of the real 'long-tail businesses'.
It tackled the limited shelf space of the then dominant video rental stores, such as Blockbuster, with an electronic library of films from which customers could select.
The discs are then sent through that oldest of old world media, the postal service.
Netflix in the US was among the first and certainly became the biggest.
In Europe, the biggest company is LoveFilm, which merged in 2006 with another big player VideoIsland. It is the market leader in the UK with significant presence in Scandinavia. It is part of the Arts Alliance group, a company with a very wide range of interests in digital distribution, including VOD and digital cinema.
A sense of its potential came when Amazon ditched its DVD rental business in Europe in favour of backing LoveFilm. Click here for more.
Others include Germany's Gloriamedia and Videobuster but every country has its own model. The logic has always been to move to digital distribution with the huge advantage of having a ready-made database of active film fans.
» GAMES CONSOLES
There is no clearer sign of convergence in action than the fact that videogames companies have become potential players in the content market.
Their ambitions should come as no surprise. Sony, with its extensive film interests, is the manufacturer of the PlayStation, while Xbox is owned by Microsoft, which has made its own content aspirations clear.
Nintendo - manufacturer of the Wii - is aiming for a broad demographic that may give it advantages when married to film downloads.
Both consoles will be able to play next-generation, high-definition DVD (although Sony has an advantage after the victory of Blu-Ray in a protracted format war).
The advantage of consoles is that they are muti-tasking devices for gaming an downloading and one which has already won its place in millions of homes, a key benefit over other would-be set-top box-based businesses.
» NEW PLAYERS
A number of new players have entered the market and made some headway in the last two or three years.
They have established themselves partly through the ability to bring user-friendly software to the market which has blurred the boundaries between television
Declaring itself an online community for people who enjoy world cinema, Jaman licenses and distributes cinema-quality films and documentaries online.
Identifying that international independents would offer the greatest flexibility in terms of licensing rights, the site focused its launch strategy on that market.
'If you want to build a large and global site,' says founder and CEO Gaurav Dhillon, 'you have to provide them convenience, and working with an underserved section of the market gave us that.' Jaman built the technology first, going public in mid-2006 with a system that allows users to rent films - most obtained through revenue-sharing library deals - and view them on Jaman's high-definition player rather than having to purchase outright.
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