VOD Web biz could be cable boon

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While cable operators pine for good product for their video-on-demand startups, the major studios are joining to start their own Internet-based on demand service.

The studios include Paramount Pictures, Sony Pictures Entertainment, Universal Studios Metro-Goldwyn-Mayer Studios, and Warner Bros. Each content provider will independently determine its own release windows and pricing strategies. Further details, including a name and launch date, have not been resolved. Other means of delivery - including cable - will be explored in the future.

The on-demand Web service provides digitized theatrical releases for broadband Internet users in the U.S. and is based on open-access Internet Protocol (IP) technology.

The venture is separate from cable on-demand deals, which are collectively negotiated by InDemand. Currently, Universal is the only major studio partnered with InDemand, but the deal isn't exclusive and the studio can pursue other forms of digital distribution. A spokesman for InDemand said cable VOD is the best distribution method available right now. "VOD will enable them to sell their movies right now, not several years from now when technology will make streaming more practical."

The studios did not disclose how they had resolved their worries about encryption strong enough to thwart pirates.
Viewers will need to have some sort of high-speed Internet access and, for now, will largely be limited to watching the service on their compter screens. That's particularly a problem since cable operators are backing away from plans to deploy advanced digtial converters that would allow subscribers to readily surf and access video content on their television sets.

Under the new broadband Internet agreement, content will be encoded with Digital Rights Management (DRM) software agreed to by all of the studios to protect against duplication and file-sharing. - John M. Higgins

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