[ Digital cinema, democratization, and other trends remaking the movies ]

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Saturday, September 30, 2006

Total Impact of Movie Piracy: $20 Billion? ... Plus, A Q&A With YouTube Co-Founder Chad Hurley

- The NY Times today mentions a new study from the Institute for Policy Innovation (a think tank of the ultra-conservative variety) that estimates that the total impact of movie piracy is actually much bigger than the MPAA believes. (The MPAA estimated that studios lost $6 billion to piracy in 2005.) The IPI study says that "motion picture piracy now results in total lost output among all U.S. industries of $20.5 billion annually. Output includes revenue and related measures of economic performance." And, "Absent piracy, 141,030 new jobs would have been added to the U.S. economy. Of this total, 46,597 jobs would have been created in the motion picture industries while 94,433 jobs would have been added in other industries." The conclusion of IPI's executive summary:

    The true cost of motion picture piracy far exceeds its impact on the movie producers themselves, and harms not only the owners of the intellectual property but also all U.S. consumers and taxpayers. As policymakers seek to maintain the health and vitality of the U.S. economy and preserve our global competitiveness, it is imperative that government and industry work together to combat this growing problem.

Here's a start: How about making it easy to buy movies in digital form, new and old, and get them to play on any device?

- Saul Hansell has a piece on YouTube in the Times today, and accompanying it is a Q&A with Chad Hurley. Here's a passage about advertising:

    Q. Would you allow “pre-roll” ads to be shown before your clips?

    A. No, not right now. I mean that’s some of the things that we’re looking at, advertising models right now. We don’t believe in pre-roll. We don’t believe in forcing people to watch something. We don’t think that’s the best way to communicate a message to people. And, just looking at different ways that help brand advertisers tell a story is one of the things that we’re looking at. Ways that advertisers can engage with the users and the audience with their brands and have the users benefit from that.

    In the past months, we have had ads that people can actually interact with like any other piece of content on our site. And that ties into also a brand-new channel that gives a brand or an advertiser a place in our community on our site like everyone else.

    Q. But you said a vast majority of your stuff was user-generated and kind of wacky unpredictable stuff. Why would an advertiser want to be next to something where it might be something disgusting?

    A. Well, I think it’s the nature of the Internet. There’s not really any safe places on the Internet. And they just want to get in front of audiences...

And meanwhile, down in Dallas, Mark Cuban is still explaining why YouTube is doomed.

Friday, September 29, 2006

The Complete Conversation: Orphanage Co-Founders Jonathan Rothbart and Stu Maschwitz

In July 2006, I got the chance to sit down with Jonathan and Stu, two of the three founders of The Orphanage, the San Francisco visual effects firm (and software development shop) that is just now branching out into computer-generated animation. (The third founder is Scott Stewart, who works in LA.)

A very abridged version of the conversation ran in The Hollywood Reporter's `Future of Entertainment' special issue this month, but I wanted to post the full transcript here.

What did we talk about? The Orphanage's plans to compete with Pixar...the permeation of visual effects shots into every kind of movie...YouTube and TV commercials...Video remixing and audience participation...whether videogames are the future of cinema...HD DVD and Blu-ray...whether model-making will survive...and pre-viz.

Here it is... Would love to hear your comments.

@ @ @ @ @ @ @ @ @ @ @ @ @ @ @ @

July 10, 2006

Scott Kirsner: Is there a convergence happening between the worlds of live action visual effects and computer-generated animation? When The Orphanage starts making CG animated movies, it makes me wonder whether it’s a similar pipeline, and a similar skill set – that we might not see as much white space between the two worlds in the future.

Stu Maschwitz: Sony’s doing that right now. They’re very much about moving people from their visual effects pipeline into their animation pipeline. They’re completely intertwined.

We definitely want synergies between the two, but we don’t see them as the same animal.

They have different needs. In some ways, we’ve been trying to make our visual effects gigs train us for the CG animation thing. What it means for someone in visual effects to do lighting is to just match some live action lighting, for a character that’s in a live action scene. But getting to do a job like “Sin City,” it’s the opposite. We’re putting an already-photographed character in a CG scene. So lighting means really fleshing out the cinematography of an entire environment. And that’s something you have to do at Pixar, but not if you’re doing a “Jurassic Park” sequel.

“Sin City” was the first show where we had a layout department. And that’s a department that we’ve maintained ever since. That’s an experience that merges this technical knowledge of cameras with the aesthetic concern of making a shot that could be in a movie. And that’s a department that a visual effects company suddenly finds themselves needing, with these “Sin City,” “Sky Captain”-like projects. But Pixar has needed that from Day One.

There is a little bit of a colliding thing happening.

Jonathan Rothbart: Doing character animation in a visual effects film is not so distant from something you’d do in an animated feature.

SM: And effects animation – a lot of the stuff that we do with fluid simulations, and particles, and smoke and fire – all the hard things in CG [visual effects] are just as hard in animation.

JR: That’s an interesting thing that Stu mentions. With all these CG features coming out, there’s different levels of quality that you see. Our goal is to go after the Pixar-level quality.

You go watch “Cars,” and when they’re slaloming through the prairie, the dust they’re kicking up is pretty near photo-real, but more importantly, it’s realistic looking, but they’ve been able to art direct it to their needs. And that’s exactly what you have in visual effects -- you want an explosion, but a particular kind of explosion. You want it to look real, but the director has to be able to art direct reality.

SM: The misconception may be that in an animated feature, because it’s not necessarily photo-real, all that detail doesn’t need to go into it. But it does. It’s just stylized.

SK: So what differentiates live action from CG, if you look out a few years? Is it just that one has a more fantastic aesthetic, and the other is slightly more grounded in looking out the window and seeing, say, a palm tree.

SM: There’s this phenomenon called the uncanny valley. As you make a CG character look more and more realistic, it gets more and more appealing, until it goes into this dip, where it falls just short of being realistic. It gets really creepy. I think we are a company that wants to straddle the uncanny valley. We want to be completely realistic with our CG visual effects for feature films, and we want to completely author a very stylized world for our CG animation. Genndy [Tartakovsky’s] work is extremely stylized, and part of what makes it so cinematic is that it has such a unique signature style to it. There’s no place in Genndy’s style for creepy CG, semi-photo-real humans. So I don’t think anyone would ever confuse a Genndy movie with a live action movie that was just more fanciful. I don’t think we’re going in that direction, of making a movie where we’d be confusing the borderline between live action and animation.

SK: In terms of your core, live action effects business, what has changed between 1999 and 2006, aside from more powerful processors and Moore’s Law? What’s different about the kinds of things you’re asked to do?

JR: Well, they’re always harder, and bigger. That’s the funny thing about our business – the machines always get better, the tools get better, and the things you did last year are pretty easy to do this year. However, this year, that’s not what somebody wants. They want something much larger that’s going to push the envelope.

SM: I think that’s Ed Catmull’s Law. [Catmull is a founder of Pixar.] As Moore’s Law increases, you just make up for it by trying to do harder and harder things. He is one of the ones you hear quoted, saying that render times have remained a constant.

JR: Over the years, I’ve never felt we had a glut of render power.

SM: You’re always just riding up against that threshold, of just barely being able to see your shot overnight.

JR: We push the envelope to do more with the tools we have. Before, there were things you wanted to do, and you just couldn’t.

SK: It feels like there always is that edge that people teeter on, in terms of wanting to do a shot that people haven’t seen before, and not wanting it to be too conspicuous, where people say, that character, or that explosion, is a visual effect.

SM: We call that work. (Laughs.) We call that showing up to work in the morning. There’s an interesting tendency, this odd thing that CG seems to have initiated in film, which is a real willingness of people to over-extend their capabilities. With the first computer-generated effects in movies, we were just so excited to see them that it didn’t matter that they weren’t that good. “Jurassic Park” was an exception – it’s still great by today’s standards. But after that, the floodgates opened, and it was almost like the audience didn’t mind looking at bad CG, because it was new, even if it wasn’t photo-real. The audiences are over that, but somewhere, the word got out to directors that anything’s possible. Our industry is a little bit a victim of its own success. You work the miracle on one show, and everyone expects the miracle on the next.

JR: The films that we think of in the past as the major visual effects films, that really pushed our industry forward, have just a miniscule amount of visual effects work by today’s standards.

SM: Jurassic Park had 35 CG dinosaur shots in it.

JR: “Superman Returns,” which I just finished, had 1500.

SM; “Superman” probably had 35 dinosaur shots in it that were just cut.

JR: (Laughs) Yeah, that sequence went away.

SK: It seems that there’s a lot of tendency now that if something doesn’t work out on set, or doesn’t look the way the director envisioned, suddenly that becomes a visual effects shot.

SM: (Incredulously) No….

JR: Yeah, absolutely.

SM: No one would go into the production of any movie today without some idea about incorporating visual effects. It’s officially ubiquitous, at any budget level.

JR: We did our own small movie -- a romantic comedy. We were excited for it to have no visual effects in it. It’s called “Griffin and Phoenix,” starring Amanda Peet and Dermot Mulroney. Sure enough, we had to do some cameraman removals, a little window help —

SM: -- Making the lights on the Christmas tree twinkle a little more. Why not? You’re doing a digital color correction, and your files are already there.

SK: Lately, it seems to have become the Liquid Paper of the movie industry.

SM: There’s definitely that. But it gets back to that thing of art directing reality. It used to be that if you wanted a particular type of sunset, you had to wait. Now, you don’t. Now, you can retroactively apply whatever sunset you’d like.

JR: We worked on “50 First Dates” – not what you’d consider a visual effects film. But we did some green screen car comps, because it was much cheaper to shoot [on a green screen stage] than shooting on a bridge. There were these golf ball shots, where Adam Sandler is hitting a golf ball, and all these kids are hitting it on the green. Instead of going out, and trying to get the golf balls to land exactly where they want, just do it as a CG shot, and save yourself some money, and direct it exactly the way you want.

SM: In “X3,” major sequences take place in San Francisco, and not a single thing was ever shot here, except for a couple of plates. There’s definitely a certain type of visual effects that’s making it more and more OK to shoot your whole movie in Vancouver and call it New York.

JR: “Superman” was shot in Sydney, which stands in for New York City. There are hundreds of visual effects that pass by, and you don’t even realize they happen. Those are “helper” visual effects, where it’s easier and more cost-effective to do it later on, and the director has the opportunity to art direct it like he wants. It has helped the filmmakers manage their films’ look better.

SK: I’m fascinated by the new competition in the industry. You started The Orphanage in the era when competition was still pretty scarce. It used to be that if you had an effects movie, you could only go to Industrial Light & Magic, or Digital Domain, or Rhythm & Hues. My sense now is that it’s gotten more competitive, because you’ve got five kids in a basement who just graduated from University of Illinois, and they’re willing to underbid like crazy to get work.

JR: That’s definitely reality, and then you have the Canadian companies, where the Canadian government gives tax subsidies for having your shots go up there. It’s an extremely competitive field. You search to find the sweet spot where you can position yourself, so that you’re reducing the field for your particular kind of work. Our goal is always to try and reach up to the ILM’s and the Sony’s and the DD’s and the Rhythm + Hues’ of the world, because those guys are on a certain playing field.

The difference for them is that in the old days, they used to take on an entire show, and do every shot, from the most difficult work down to a simple paint-roto shot. Now, they do the most difficult work, and the other stuff goes elsewhere. But the fact is that there are only a handful of shops that can get a certain kind of shot done —

SM: -- In a certain quantity. We’ve always tuned our size so that we can take on a sizable chunk of a movie, and yet not be at an uncomfortably large size, if the work ebbs or flows. We’ve very specifically set out to differentiate ourselves by quality, and to be able to drink from that firehose when it does come. It’s in no way easy, but we did go out and actively try to do it.

JR: We also like to have a diverse set of incomes, as far as doing commercial work, visual effects, and production. We do feature visual effects, and now animation. We’re trying to diversify our portfolio, so we can move the pieces around, and never feel any valleys during the course of the year.

SK: On the commercial front, looking at some of the stuff that you’ve done, it seems that maybe ad agencies are looking to visual effects to dial up the “wow” factor for a commercial. In the old days, you didn’t see visual effects in commercials, except for the Super Bowl. Is that a function of TiVo, where commercials now have to be bigger and faster and more visually impressive to get people to pay attention to them?

SM: I definitely think there’s that. You’re hoping to get that commercial where people will want to point it out on YouTube to their friends, as opposed to trying to fast-forward through it. But the other thing that has happened is kind of similar to what has happened to feature visual effects, which is that agencies know now that they can get a pretty impressive commercial for a fraction of what it used to cost. When I first started, it was not unusual to work on a commercial that had a million-dollar budget, and now that’s unusual. And the degree of complexity has just skyrocketed. It’s another funky struggle. There’s this high echelon of really amazing commercials out there, where people are sparing no expense and trying to wow everyone, and then there’s this playing field of commercials that have challenging visual effects in them, but people have started to take it for granted that they can get something like that for a fraction of what it used to cost.

SK: People passing around commercials via e-mail, or sharing them on YouTube, makes me wonder whether we’re getting into a world where commercials really have to live or die based on whether it’s an entertaining minute of video.

SM: We love that.

SK: At some point, why even buy the commercial time?

SM: I just directed a Navy SEALs commercial where seeding it to the Internet, and having it be something that people wanted to download, was an active part of the conversation. Yes, we’ll buy airtime, but we expect people to share it with each other.

JR: I have TiVo, and I certainly stop on the commercials I find entertaining, and race through the ones I don’t. I find that well-done, entertaining, story-type commercials are just as entertaining as the show they’re in.

SK: It does seem like maybe we’re seeing some evolution, where there are fewer commercials today where you’ve got the housewife standing in front of her washing machine, talking about Tide.

SM: That’s only a good thing. I was watching the World Cup, and it was almost like the level of attention in the room increased during the commercials, where you have the little Italian kid running around in a field, pretending to play with all the great players. You love watching those spots, and you look forward to seeing them.

We’re just starting to see the beginnings of the shake-up. Still, on the client side, the big, corporate clients live in a world of PowerPoint: “I would like to communicate the following message to you about Advil.”

JR: They want a big logo in the middle of the screen.

SM: Bless them, ad agencies are trying to warm them up to the idea that you need to zig when you think you need to zag.

SK: The other idea that’s interesting is when advertisers let their customers submit their own video, or direct their own commercials. Or when Richard Linklater invited people to edit their own version of the trailer for “A Scanner Darkly.” Do you feel like that’s a legitimate new direction, where you have consumers engaging more with the content?

SM: One of the things that we do at The Orphanage is that we package up some of our technologies and we sell them through a sister company called Red Giant Software. That’s a community of people who are out there with their FinalCut Pro systems, who are very in touch with one another. A product lives or dies based on its word-of-mouth in that world. And I became really aware of how, if I go out and just snoop around in that world, and observe what’s going on, and then every once in a while pipe up and try to answer a question or solve a problem, I’m viewed as this outsider looking in.

So what I did is I started a blog, and became a more active part of those things. Suddenly, there was this friendly thing – a warm embrace of what we had to offer, because we were perceived as giving back to the community. I think people are slowly learning that. Microsoft lets their employees blog.

JR: Certainly, blogs and podcasts are opening that up. You’re finding the people out there who are capable of doing it. “Four Eyed Monsters” is fantastic. They’re so great.

SK: I haven’t seen that one.

SM: It’s this couple who made a film that played at Slamdance, and they’ve been making video podcasts about the trials and tribulations of making and then releasing their film.

JR: It’s very engrossing.

SM: More people will see this podcast than will ever see their film. But they’ve worked out a system where you can go to their Web site, and add your name to a list, and when it gets to a critical mass, they will put a screening in your area. They can go to the theater, and say, “We have this list of this many people who say they will show up, and as we’ve seen from these other cities, 60 percent of them actually do show up. Can we have a screening?” It’s kind of a no-brainer for the theater to say yes. They’re side-stepping distribution, by just distributing it themselves in this very grass-roots way. But they’re doing it by feeding free entertainment to the world on their iPods, which is super cool.

JR: It happens to be incredibly entertaining, in four-minute spurts, which is why it works.

SM: It’s like open source software. If you give it away, somehow, you’ll get it back.

SK: The Hollywood creative community seems to have a hard time with that. With open source, the community is helping to build the product. When you float that idea by someone in the movie industry, they’re not so keen. Could a director imagine a scenario where all the raw footage of a movie is available, and someone else would be able to make their own cut? Maybe their 90-minute cut would be better than the director’s 120-minute cut. That idea of letting other people contribute is scary.

JR: Yeah, you have a level of ownership to what you’re doing. It’s a scary proposition to release that out for other people to take hold of.

SM: Some people want that level of participation, and a lot of people don’t. Asking someone to come see a movie, and pay $10 for the privilege, is like, “OK, dude, I’ve got this great story I’ve got to tell you. First, give me ten bucks.” Then I tell you the story, and I get to the end, and ask you, “How do you want it to end?” “Why are you wasting my time? You don’t even know how the story ends.” You want someone to grab you by the lapels and tell you a story.

SK: But a different scenario is that you’ve already paid the ten bucks to see “Superman Returns.” Maybe after the theatrical run is over, it’s just open season on the movie, where anyone can do their own cut. I might do a cut that’s just twenty minutes of my favorite visual effects shots.

SM: But I don’t think that’s what’s happening with the “Snakes on a Plane” phenomenon. It’s different than people wanting to re-edit their own version of the movies. People aren’t all closet filmmakers, but everyone has an opinion. What happened with “Snakes on a Plane” is that it was a temporary title, and they were going to rename the movie. But somehow it got out that the working title was “Snakes on a Plane,” and that’s funny. Then, someone makes a little movie poster with Sam Jackson’s face, and suddenly you have a hundred people saying, “I can’t believe you would call it something else.” Then you had Sam Jackson saying that.

SK: I don’t want to focus too much on remix culture, but I do think that you’ve seen some interesting examples, like when someone did their own edit of “The Phantom Menace” and took out Jar-Jar Binks. There are some interesting, playful things that people do with movies that could give them life after the theatrical release, in many different versions. What if you could get someone to buy two different DVDs from the studio?

SM: I think you’re onto something there, but I don’t think it’s going to be limited to re-editing. If you amalgamate all those phenomena, like “Snakes on a Plane” and General Motors letting you edit your own version of their pick-up truck commercial –

SK: -- And all the anti-global warming people started to make all these mocking commercials.

SM: But if they hadn’t, it wouldn’t have gotten any attention. So for a while, they made the active decision not to pull those things down, because they were getting a ton of traffic.

You’re right to call it the remix culture. But with “Snakes on a Plane,” or cutting Jar-Jar Binks out, someone is making a point. It’s not going to be a version of “Superman” where someone is going to come back and say, “I think this is a better version.” Someone is going to find some way to edit “Superman” so it has a gay pride message – which maybe wouldn’t be that difficult. They’re going to find some way to make a point with it, and that is where Hollywood and ad agencies and content owners are going to have to decide if they want to try to stop people from making a point using their tidbits.

JR: My guess is, knowing the Hollywood community, that their first choice is going to be to not let someone use their material to make their own points.

SM: But if you clamp it down – if GM had clamped down on the environmentalists – you instantly turn them into martyrs.

SK: We’re in a world now where the machinery of moviemaking is increasingly accessible, and you can make movies for under $1000. I wonder if you might see more interesting creative ferment in that world. On the flip side of that, you have the studios saying, let’s make fewer movies, and spend more on each one.

SM: The whole formative impetus for The Orphanage was that accessibility – the collision of high-quality digital cameras that you could buy at The Good Guys, plus off-the-shelf hardware and software that let you do ILM-quality visual effects.

JR: Or doing editing on my Mac on the airplane flying to New York.

SK: Given all that cheap technology, and the inventiveness and off-the-cuff-ness you get in that world, it sometimes seems that the established movie industry is less and less able to do those kinds of clever, fresh things.

JR: The nice thing about the Web now, and things like YouTube, is you can actually get access to [all kinds of small videos and movies].

SM: I’ve been thinking a lot about those iFilm and Atom Film sites. iFilm is the one that has tried to swing into the YouTube mentality, but they still put a lot of obfuscation between you and the content, whereas YouTube and Google don’t at all.

The only thing people seem to be willing to pay for is stuff that has pre-sell. Like, I missed that episode of “Lost,” so I’ll download it from iTunes. Or, I remember vividly all those great episodes of “Knight Rider,” so I’ll download one for $1.99 to watch on the plane.

For my part – and I’m fully willing to be proven wrong – I feel like it’s going to exhaust itself a little bit. I think there will always be some little clip of something that’s so funny you want to show it to somebody. No one’s ever going to want to pay for that. I wouldn’t send you [the popular YouTube video] “Evolution of Dance” if it cost you 25 cents to watch it. I don’t think that’s going to change. But there is a movie that’s been giving itself away for free in ten-minute segments, and if you want to pay, you can get ahead in the story.

I’m very excited for the distribution barrier to break down.

There are some filmmakers out there who are doing short science fiction things — there was a “Star Wars” fan film where people all over the world, who’d never met each other, were contributing visual effects work to it. You can go on the Web site and download the box art, which you can print out yourself. You can burn a DVD. George Lucas lets people make those movies, as long as they don’t make a profit, so they have to give all this stuff away. They got a lot of attention, because they blogged the whole thing. They posted the footage they shot. “Look, we got 30 Storm Troopers to show up, because we put a thing on the Internet saying, if you’re a Storm Trooper, show up.” People followed it along, and seeing the final product was like the end of a long process of seeing how the thing was made.

Peter Jackson picked up on that same thing with “King Kong.”

SK: Do you see other changes happening on the Internet, given the increasing prevalence of video and film content on the Net, and more people having portable devices that can show video?

JR: The cool thing about the iPod is that it’s a really cool way for people who travel, or are busy at work, to have a chance to watch stuff. But to be honest, I still like my big widescreen TV at home.

SM: There’s really stupid stuff happening now, where you can spend $20 to download an encrypted, low-resolution version of a movie that’s available on DVD for $21, or $16.

I love my video iPod, and I didn’t think that I would. I’m a complete crack addict with it.

SK: What sort of stuff are you watching?

Stu: I’m listening to a lot of podcasts where people are hypothesizing about the exact thing we’re talking about now. To me, that’s why I’m willing to predict that it will kind of blow over. Remember back in the mid-1990s, with virtual reality? Everyone knew what it was supposed to be. We had seen “Lawnmower Man,” and we’d seen pictures of people with goggles, and we knew that there were high-powered computers somewhere that would kind of make it possible. But everyone was like, “It’s all about virtual reality. We just have to wait until the computers get there, and it will be awesome.” Disney said, “We’ve got the money. Let’s do it.” They built this Aladdin magic carpet ride. They got a supercomputer, and you’d put goggles on, and sit on a Persian rug, and hold the edges, and if you pulled this way or that way, you’d fly. They did it. They proved that it was do-able. And then what happened was, it didn’t happen, and we kind of forgot about it.

Then, completely quietly, without anyone even realizing it, [the videogame] Doom came out. It was virtual reality, without the goggles. You realized that we got distracted by the goggles. If you put some headphones on, and turn off the lights in the room, and play Doom, it’s way more virtual reality than what [Disney’s] supercomputer was doing.

I think that’s what going to happen here is, we’re all going to be talking about how to monetize Google Video, and then the thing that is actually the thing is just walking right past us, completely unnoticed.

SK: While we’re talking about videogames, a few years ago, you’d talk to people in the movie industry about interactivity. They’d tell you that people don’t want to pick an ending for a movie, or tell you what’s going to happen in the next reel. And yet, while they were saying that, the videogame industry was growing like crazy, and it has kind of turned into interactive movies – these almost cinematically-real environments, where you’re controlling your path through a story. A game like Grand Theft Auto is better than CG-animated movies were fifteen years ago.

SM: I’m hooked on Grand Theft Auto. But I hate actually playing the game. I just like going around in the environment, and seeing what kind of sh** you can cause. I really enjoy that. But the actual game -- I can’t be bothered. What I really hate is the part where I go into a room, and it fades out, and I know I’m going to be in for watching fifteen minutes of bad mo-cap animation, and no lip sync.

Games make more money than movies, but that doesn’t mean that they are movies, but better.

JR: There’s a reason games have clung to two or three different media. You’ve got your sports games, your car games, your kill-everyone games.

SM: With certain kinds of entertainment, like immersive worlds, games will let people do that better than movies ever could. “Star Trek” has had years to create this very pervasive world, and a whole community people who gravitate towards it in this Renaissance Fair sort of way.

Movies used to be your only recourse, if you were into swords and sorcery. You just had to wait for someone to make the next epic fantasy movie. But I wouldn’t confuse that with the general [idea] of movies being subjugated by videogames in general.

JR: There’s definitely a different level of appeal.

SK: But if you want to talk about young men, who are so attractive to studios and advertisers…

JR: There’s definitely an age group. Things like [the videogame] World of Warcraft are time-sucks. They’re immersive, and it takes ten hours to go do stuff. You need lots of time.

SK: I wasn’t suggesting that games will replace movies, but they are that sort of more interactive form of entertainment. And there still is a separation of the studio making the movie, and someone else making the game based on the movie. And they’ll cross their fingers and hope that it works out. Then, on occasion, you have a game company licensing the rights to make a movie based on something like World of Warcraft, and hope that it works out.

JR: More often than not, the films that license the rights to the game companies, those are usually not the games that people fall in love with. The only time I’ve seen it be extremely successful are the James Bond games, where they take the character and gave him missions, and they did a really good job with that. You don’t often see people loving the Superman game or the Spider-Man game. They’re trying to force you into that movie, and I don’t think people enjoy the experience as much.

I think the thing that people love about World of Warcraft is that they create these characters that are 100 percent their own. They own them. They decide what they’re good at, what they’re not good at, what they can do, what they can’t.

SK: Do you guys have a vision of at some point building a games business here? The LucasArts people have been saying for years that there are some synergies in sharing assets between visual effects and game development.

JR: For us as a company, it’s about stages. We find games interesting. A lot of us like games, and understand that there’s money to be made in games. It’s out there, but we’re just trying to handle the things we’ve got in our vision right now.

SM: If we were to do it, we’d approach it the way we’re approaching animation, which is with a huge amount of respect and deference to the people who actually know what they’re doing in that world. I believe that there are good games, and bad games. The good games are good because of good creative leadership. A really good friend of mine was working for a company called Double Fine. They had this really cool, unique game called Psychonauts. I don’t know if it was hugely successful financially, but it was really well-reviewed. It was on lots of ten-best lists for the year. I think we have too much respect for it to cavalierly say, “We’ve got computers, so we should be doing that, too.”

JR: You need to understand that good work doesn’t come easy. It takes certain skill sets, and you can’t just assume that because you’re good in one industry, you can roll into the next one, just because you have the assets you can share from visual effects.

SK: But you do hear that “convergence” word a lot, with regard to visual effects and gaming…

SM: Except, what are you making? How you make it, absolutely there’s convergence. But game design is a whole thing. It comes down to gameplay. You can have the best graphics in the world, but gameplay is the game world’s version of story. When we talk about Orphanage Animation Studios, we won’t shut up about how story is the most important thing. Everyone is sick of hearing it. And Pixar also won’t shut up about it, and they’re living proof that it’s absolutely true.

JR: Rocket Science [Games] is a perfect example. They did this game called Obsidian. They were this gaming company in the Bay Area, and now most of them are in the visual effects industry. It was this company that had a ton of cash, and they made this game Obsidian, which was just beautiful. They made an incredible-looking game, with beautiful artwork. But the game sucked, and nobody wanted to play it.

Without the gameplay, you’re lost.

SM: I would also point out something else about games. Something really interesting is happening right now. There’s a console war between Sony and Microsoft, and Nintendo is going to win it, with less technology and more fun, more silly games – games that are much less like movies, and more like games. You watch. [Nintendo’s] Wii is going to blow up, and the PlayStation 3 is going to fall on its face. It’s in trouble.

SK: While we’re talking about conflicts in the marketplace, what’s your read on the high-definition format wars? You talk to the HD zealots, who tell you that absolutely everything is going to be in HD.

SM: It will, but you won’t be getting it on anything round or shiny. You’ll be getting it through a dedicated or not-so-dedicated box in your living room that’s hooked up to very fast pipes. I directed a commercial for Toshiba’s HD DVD player, so I should be telling you that HD DVD is going to win, but…

JR: I have had the feeling that Blu-ray missed its opportunity for sure, and the PlayStation 3 is really in trouble, given that they’re trying to charge something like $600 for the console, which nobody is going to pay for, and Blu-ray as a disc is not really ready for prime-time. I’m sure you’ve heard the comparisons between Betamax and VHS. [HD DVD] was first-to-market…

SM: I have the HD DVD player, because I directed that spot, and it doesn’t seem to work.

I’m a DVD collector. That’s part of my job. I love the commentary tracks, and the supplemental materials. I watch the commentary on the worst movie ever, in hopes of gleaning some cool piece of information about it. But I get all my DVDs through Netflix. If I like a movie enough, I’ll buy it, but inevitably, I wind up buying movies more because I need them for reference for some visual effect we’re trying to do.

Netflix is awesome. I think nothing of returning a movie one day, and maybe getting it back two days later. Right now, the turnaround is that I return a movie on Day One, and get another on Day Three. I think that, a year from now, I could download an HD movie in that period of time, to my TiVo or whatever it is. Netflix is even rolling out a beta of a dedicated box that you would have hooked up to your home theater set-up. They were very smart to not call themselves DVDs-By-Mail. They’re the first ones to tell you that they knew they weren’t always going to be reliant on the postal service.

JR: When it comes to those DVD collections, moving into HD there’s the frustration of buying all new ones, like when I went from Laserdisc to DVD.

SM: That’s the thing, rather than buy new DVDs, I would so much rather Netflix them, and I’d prefer to digitally Netflix them, rather than Netflix them [by mail.]

With videogames, I get them through GameFly, which is like Netflix. If you hold onto a game long enough, and feel like you should buy this one, you just don’t return it, and they charge you a used price for it. Sometime in the next week or so, they send you the box it came in, so you have that. It’s kind of effortless.

SK: Do you think that there’s still going to be a place, in five or ten years, for model-making and optical effects, stuff that’s hand-built or hand-painted?

JR: I hope so.

SM: Miniatures, for sure, for the same reason that, in 2050, there will still be a 9-millimeter pistol: because it can kill someone. You see the sci-fi movies where everyone’s shooting lasers, and you go, a gun would still work, and it’d be cheaper than a laser gun.

JR: Some things are still cheaper. It’s really difficult and expensive to make digital explosions, and explode a car, and have it go into a million pieces and flip over, and have the tire fly off. It’s better done with models, and it looks better. I don’t think that some of the [digital] work we do is at the level where it replaces the model. More often than not, the effects I see that are some of the best ones out there have models incorporated in them.

SM: People herald “King Kong,” for example, as this victory of CG, because the title character is so expressive. But all of the jungle environments that they’re running around in are really elaborate miniatures.

JR: Or “Lord of the Rings.”

SM: We’re seeing a really great emergence of the proper understanding of how miniatures and CG relate to one another.

There’s no longer a differentiation between what’s a matte painting, and what’s a miniature. You start with some photography of the live action, and some of the miniatures, and some painted pixels – which may be a photo-collage from some aerial photo shoot you went on. What’s a matte painting anymore? We don’t even really use that term anymore. We call it a digital environment.

JR: Given the age we’re in with visual effects, where everything has to be so photo-real and undetectable, it’s almost necessary to start from a photograph as it is. All of our matte artists, the first thing they do when they have a shot is they start running around with a camera for the first two days, taking pictures to support the shot they’re doing.

SM: We get a reminder sometimes that we can kind of outsmart ourselves. With “Sin City,” we had a bunch of splattering blood we were trying to do. After two weeks of fluid dynamics development of splattering blood, the guy who was putting the final shot together and the CG supervisor said, “We just need some reference for what this should look like.” They went out in the parking lot with a bowl of milk, and started splashing it. The milk was white enough that they could get a good key off of it, so the compositor put that in the shot, just to see how it might play. He put it in dailies, and we all said, “That’s the best fluid simulation we’ve ever seen.” That afternoon, we were out in the parking lot with a bowl full of eggnog – this was around Christmas -- and a hockey puck. Throwing a hockey puck into a bowl of eggnog became how we splattered the Yellow Bastard’s blood all over the barn at the end of “Sin City.”

It was so much faster and so much easier. It was real-time. It was in the shot that day.

When we worked at ILM, Jonathan needed a waterfall element for a shot in “Star Wars,” and everyone wanted to do it some complicated CG way. I had just gotten my digital video camera. It was a beautiful day, and we took our lunch hour to go down to the Golden Gate Bridge and shoot the bay, and comp it in. We got yelled at.

JR: But nobody bothered to argue about the shot anymore. Realism works.

SM: Dirty tricks work.

JR: The thing I talk to artists about here is, that’s a part of filmmaking. They do it on the set everyday. Tricks with lighting, tricks with sound. Why should visual effects be any different?

SM: For “Sin City,” we had the world’s hokiest miniature stage set up downstairs. The room was blacked out, we had a couple lights, and a table covered with baking soda. If you spritz it with water, baking soda gets this crusty shell on top. They had little action figures, and they’d walk them through it – and it looked like perfect little footprints in snow. Then they’d take digital photos of them, and map them onto CG surfaces. That’s how all the snowscapes in “Sin City” were done.

SK: Can we talk about pre-viz. Do you guys do pre-viz work?

JR: Pre-viz has become its own industry now. We don’t typically do it here, and it’s not from a lack of interest. I did pre-viz at ILM. I basically started building that department there. Two of our junior supervisors here were part of the pre-viz group for George, up at the ranch. But now you’ve got these companies that are devoted to going on set, and going on location. They’ve got a pipeline, and a system built up for it, and they have a reputation for doing it, and a cost structure that works. It’s hard to fold a visual effects company into that design.

ILM had a much larger [pre-viz group], and I think they shrunk it down.

SM: What’s interesting to me about pre-viz, is how I think of it as a director working on commercials. I always do pre-viz working on my commercials, and I can do it myself, with whatever rudimentary knowledge of computer graphics I have. I can do my own animatic that’s pretty cool looking, and I think that should only get easier. There’s a storyboarding program out there now, and if you buy it, it comes with what looks like a PlayStation controller. They realized that that’s something you’re used to doing. I can play Grand Theft Auto, and walk my guy over to the car, and he’ll open the door, and get in, and suddenly I’m driving the car. Any three-year-old can do that, and yet to animate that in a pre-viz, you’d wind up with this horrible animation, and it would take days.

SK: Do you see more pre-viz happening for more movies? It still seems like it’s stuck in this place, where it’s just for the big effects sequences of the big-budget movies.

JB. Absolutely. Certainly, on “Superman,” I saw every bit of pre-viz on that film, and it was not just the effects sequences. They didn’t pre-viz every scene, but they did a lot of talking scenes, and simpler scenes that didn’t have blown-out action and visual effects. They were working out a lot of blocking.

SM: There have been cases of people going in to try to get someone to give them their first directing gig, and they’ve gone in with storyboards for the whole movie. You could show it to the executives, and it takes a big part of their risk aversion away.

I’ve heard of genre filmmakers, making low-budget horror movies, who are using this FrameForge [3D] Studio to storyboard every scene. They’re using it as part of trying to get funding. FrameForge has a PlayStation controller with it.

SK: Is that what you use?

SM: I use SketchUp. But if I could do my pre-viz with Grand Theft Auto, I would do it. My favorite game on the PlayStation is Driver. It’s all based on “Bullitt.” You’re driving around San Francisco in this big American muscle car, and after you have your chase scene, you can go into film director mode, and you can direct the chase scene – move cameras around, and edit it. To me, that’s my idea of a good time.

It wouldn’t be crazy to think that someone could go into a meeting at a studio, and show them that: this would be the chase scene at the end of my movie. And I’ve pre-vized it in PlayStation with a bag of Doritos in my lap.

There are all these Half-Life 2 mods, where people take the Half-Life 2 game engine and tune it to do these crazy, weird things. Every once in a while, I pester the guys here who are really into games, and ask them, “When am I going to be able to pre-viz my movie using Half-Life?” Half-Life is [in high-definition], the simulations are great, and the explosions look great. If I could just spend an afternoon painting texture maps for my characters, so they looked how I wanted them to look, and take a few pictures from the location scout I just went on, and map them onto that environment, and spend the rest of the day crashing cars and doing whatever else the scene demands, I could imagine putting that on a DVD, and going into a room and saying, “Here’s the first fifteen minutes of the feature film I want to do,” and having a bunch of people vividly gripped in entertainment.

JR: The truth is, it can be an incredibly entertaining tool. The Spider-Man pre-viz we saw was a board-o-matic -- it wasn’t even 3-D. When we saw that, nobody wanted to move. It was the first chase sequence in Spider-Man. It was purely 2-D, but the story was coming through completely. It was amazing.

Getting a movie made, or trying to get your idea across to the studio – pre-viz is a perfect tool. I don’t see any reason why it wouldn’t grow.

SK: You’ve talked about doing features, like “Griffin and Phoenix.” Is that a future direction, developing more of your own feature projects?

JR: It was the initial idea of the company.

SM: It’s not a future direction. It’s just that we finally had some success last year.

JR: It’s a hard direction. When we started the company, we were just kind of mimicking George and his Lucasfilm idea, which is feature production, visual effects, and technology as three legs to the company.

SM: And your visual effects division cuts its teeth and stays current by working for whoever can pay, but they’re available to you as your own personal backlot for moviemaking.

JR: And it develops the technology that you go and sell later.

The production side has been the most difficult to expand on. It’s something we’re interested in, and are trying to grow, but it’s a tough business.

SK: If you think about what’s not possible today – or barriers you find yourself running into – what are some of the things you think will be easier in five or so years?

JR: Well, you constantly find ways to make this stuff easier and faster, but then we constantly come up with new ways to make it more difficult. It’s an endless chase. You want that, because nobody really wants to be doing the same thing they were doing three years ago, and the audiences aren’t as interested in seeing it. You’re always trying to find the newest edge for what you can do.

What we aspire to be doing is what Weta Digital and ILM and Sony are doing with digital characters and digital humans, which is really pushing the envelope: King Kong and Gollum, and Sony’s digital Superman. The digital human is probably the furthest away, because we all know it so well, and it’s so hard to reproduce. There are definitely scenes where I know a character is digital because I saw the dailies. But there are shots that go by where I don’t think most people know it’s a digital character.

SM: We don’t sit around and think about what we would like to have, because it’s such an all-consuming task to think about how to get done the work you have in front of you, given the tools you have now.

Whenever I think about a tool that would make my life easier, I always think about the limitations that it would impose on me, and how I wouldn’t be satisfied. We’re always going to be the Formula One team, where you wouldn’t think of racing the car without the guy who built the car waiting in the pit to fix the thing that broke. You have to be at that bleeding edge to stay competitive.

I can’t help but feel like there’s going to be a time where a certain type of visual effect will be somewhat akin to that Grand Theft Auto experience – when I drive the car towards the thing, the car crashes, and it looks more or less like a car crash. There could well come a time when that would be good enough for a car crash that maybe isn’t in the foreground of a shot. There might be a visual effects toolkit where it’s more pre-fab.

SK: That’s an interesting idea, that if you’re trying to make a sub-$1 million movie, and you have a car that needs to do a Thelma-and-Louise thing over a cliff.

SM: If you can set up a play in Madden football, then you probably know as much as you need about the PlayStation controller to set up that visual effects shot.

JR: This is why the tools always need to move forward. You’ve got a car going over a cliff, and then the director says, “I wanted the wheels to wobble.” And you say, “Ooh, that machine doesn’t do that.”

SM: It’s almost like the system is designed to prevent anything from ever making our lives easier. As soon as you get competent enough with fluid dynamics to do a raging torrent of water going down a street in New York, then someone is going to say, “Sweet. Now I need a tidal wave to knock over an ocean liner.”

JR: Directors never want to do the same thing that somebody else has done, so they’re always going to push you to do something different.

SM: There are a couple specific things I think you’re going to start to see. You’re going to see in-camera motion capture characters. So you’ll be able to put an actor in a scene, and the motion-track targets won’t be visible to the camera, but they will be visible to the sensing device. You’ll be able to put a digital prosthetic on them, or replace them with a CG character, and yet you never had to shoot a clean plate, because the person was really there.

You’ll see some pretty amazing technologies, in terms of when a computer is able to track in real-time an entire scene – every pixel of the motion, so that you’re building a computer version of it – which will let you age a character digitally over time. You’ll start to see a lot of directors using high-definition monitors, where there’s a rudimentary version of the visual effect already happening on it. So when you pan the camera up from the girl to King Kong, you’re framing King Kong into your shot, not a bunch of plusses on a green wall.

What has been a motto for us is keeping visual effects out of post-production. They’re thought of this thing that happens later. They really need to be a big part of planning and a big part of production.

Historically, a director would need to be an expert in visual effects if they wanted to push visual effects forward. So you’d have the Zemeckises and the Spielbergs who’d get inside it and understand it, and they’d know what they were doing when they pointed the camera at some empty space, and they could infuse their creative energy into it while imagining what was going on.

Going forward, [directors will be able to] produce good results if [they’re] not a visual effects expert, using some of these tools that let people intuitively use the tools of movie-making to design visual effects.

JR: I’ve seen directors who understand visual effects and those who don’t. It’s difficult for them to visualize something being there that isn’t, or a green-screen set.

SM: For me, when I get on a set with a crew that’s used to working in a particular way, I’d often myself saying, “Guys, give me some room – there’s going to be this thing in the frame.” Now, when I direct a commercial, I have this stand where my laptop goes, and it’s always going, looping some version of the pre-viz. Or I’ll feed it to the playback operator, so that he can be cutting in or overlaying shots. I’m trying to find these ways to communicate to the crew or the actors.

SK: Do you think there’s going to be a continuous line, from the pre-viz stuff to the final effects shots? Today, it seems that there’s this gulf between the cheap-and-dirty pre-viz, and you start from scratch with your final effects shots.

SM: Eventually. We’ve been battling this since ILM days. People would say that an animatic for a space battle looked pretty good. But if we didn’t start from scratch, we’d be putting our train on a certain set of tracks.

JR: And you’re in a constant state of Band-Aids. Your hands are tied in some ways. Currently, the way pre-viz is designed is to get it done quickly, and show a lot of versions. You don’t want too much detail, because it can be distracting from what you’re trying to get across. If you just try to push that into the visual effects shot, it is already built for something different. So you’re finding yourself constantly trying to retool what’s already there. Plus, there’s inherent laziness in pre-viz. It’s not a bad thing. It’s just the nature of the game.

SM: No matter how responsible you’re trying to be, you’ve got the director standing over your shoulder saying, “If only that was a little bit smaller.” And so you scale it down, but you’ve created something that breaks its prospects for directly feeding it into the pipeline. The visual effects artist has to be the responsible adult, and say, “If you want it smaller, it should be a little farther away, and a little higher, and a little further to the left.”

SK: It sounds like you’re talking about the difference between really adhering to the building code when you’re building something to last, versus building a set for a movie.

JR: It is very much like that. You can break out the staple gun when you’re doing pre-viz.

SK: It seems like a relatively new trend, with big-budget summer movies, that a studio will chop it up and farm the visual effects out to three or four different places.

JR: That is the norm. That is the standard. It’s relatively new. Even a place like ILM, which could command an entire film, or Sony, which is now the biggest facility out there – they can’t dictate that that happens. The standard now is that the studio signs a VFX supervisor to a production – not from a facility – to run their show. Even ILM, if their effects supervisor is going to be the effects supervisor for the show, they are actually loaned out to the production, so they can supervise the other facilities as well. It’s just the economics of visual effects, and I don’t see it going any other way.

SK: Is that necessarily good or bad?

JR: Films are inconsistent, as far as the effects. You’re trying to find what the different facilities do best, and you don’t always get that. Some shots look rough, and some look spectacular. That’s one of the bigger drawbacks. Plus, there’s a strain on the process of production.

But [the studio] can bid a bunch of shops against each other. Everyone’s price point is different, and you know what you can get from each facility.

SM: It’s horses for courses. You know that you can only afford the big guys for this hero sequence, and you may have a bunch of wire-removals that you can give to somebody else.

SK: It’s interesting that you guys are in the renovated building here in the Presidio, and ILM is over in the new building.

JR: (Laughs) We love our renovated building.

The Hollywood Reporter's 2006 `Future of Entertainment' issue ... Cuban on YouTube ... Illinois Cinema Protests Against Bad Movies

- The Hollywood Reporter's 2006 `Future of Entertainment' issue is now online. It includes interviews with ABC TV's Anne Sweeney, Netflix founder Reed Hastings, and Paramount's Thomas Lesinski on wireless entertainment.

I've got three pieces in the issue: An interview with Jonathan Rothbart and Stuart Maschwitz of The Orphanage, a San Francisco visual effects and animation firm; a story about cinematic think tanks, at places like Walt Disney Imagineering and the Institute for Creative Technologies at USC, where they're trying to devise new theatrical experiences; and a piece about the problem of interoperability -- why don't all of our new technologies play nicely together? (I'll post the full text of the Rothbart/Maschwitz interview later today.)

- In other news, Mark Cuban has been on an anti-YouTube tirade, most recently at an advertising conference in New York. He also posted about YouTube on his blog, titling the entry `The Coming Dramatic Decline of YouTube.' I think he's wrong - and that there's plenty opportunity for YouTube and copyright holders to work as partners.

- Finally, just a fun read: `Instead of Bad Movies, Cinema Shows None.' Bob Secter writes:

    HOOPESTON, Ill. — The "closed" sign went up a few weeks ago on the flashy neon marquee outside the Lorraine Theatre, but the 84-year-old movie palace on Main Street hasn't played its last picture show. Business isn't bad. It's the movies that are wretched.

    "Both theaters in Hoopeston are closed … because of such poor film choices available," explains a recording on the Lorraine's customer hotline. "Go to Danville to see 'Jackass 2.' "

    Lorraine owner Greg Boardman put his two screens on hiatus rather than sell tickets to the gross-out and freakout fare he said Hollywood distributors had made available in recent weeks. Boardman said he'd rather show nothing than such recent offerings as "Beerfest," "The Covenant" or the "Jackass" sequel, which topped the nation's box office last week despite being panned by critics.

Thursday, September 28, 2006

Thursday news: AccessIT hits 1000 screens... PJ on Xbox ... Warner cuts online division

- AccessIT's Christie/AIX subsidiary has installed its 1000th digital cinema system in the US.

- Director Peter Jackson has agreed to "create content" (note they didn't say "produce games") for Microsoft's Xbox 360 gaming console. From the AP story:

    "I don't want to classify it as a game. I'm hoping to stretch the definition of interactive entertainment to go beyond the game," said Shane Kim, a vice president in charge of Microsoft Game Studios.

    Kim acknowledged that he was not sure what exactly these new "entertainments" might be.

    Whatever they are, Kim said they could include deeper plot lines and more interactive drama with additional content available over time, perhaps through the company's Xbox Live online service.

    "It's about making interactive entertainment a mainstream form of entertainment," Kim said.

- Warner Bros. is shuttering its online division, created in the 1990s. But most of the employees will be moved over to WB Digital Distribution, and, as the story points out "original digital content for the Web will [still] be produced under the studio's TV and movie units." About 19 jobs will be eliminated, though.

Wednesday, September 27, 2006

Yahoo buys Jumpcut, Online Video Editing Service

Yahoo bought the online video editing service Jumpcut today. Jumpcut essentially tries to take Apple's iMovie video editing software, streamline and simplify it, and make it available on the Web. You can also share your finished creation. (I wrote about Jumpcut back in June in the NY Times.)

What's significant about this deal: Yahoo isn't betting that all its users are going to become filmmakers...but many will use Jumpcut to edit together their vacation videos, or string together cell phone footage taken at a friend's party -- and then share it with friends and family. Other users will use Jumpcut to remix other people's content, taking, for instance, a set of clips supplied by a band and setting them to one of the band's songs...or cutting together some of George W. Bush's greatest language stumbles of all time.

Here's an interesting project taking place on Jumpcut now: the indie movie `Power of Few' is trying to cast a bit part. Would-be actors have the opportunity to make a video of themselves reading a few lines, and they can use Jumpcut to cut together the scene. It's their chance to act opposite Q'orianka Kilcher (star of `The New World'). The best auditioner will get the part.

CustomFlix Will Soon Help Indies Get Onto Amazon's Unbox Download Service

Stumbled across this interesting announcement today... CustomFlix is a division of Amazon that helps anyone with a video or movie to make DVDs available. Soon, they'll also let you sell digital downloads through Amazon's new Unbox download service. A snippet:

    ...Unbox is the only video download service to offer DVD-quality picture and the Unbox Remote Control feature, which allows customers to buy from one PC and download to another. Please see the Amazon Unbox press release for additional details.

    CustomFlix plans to add support for Amazon Unbox to our service. This will enable CustomFlix members to offer their content as digital downloads on

    The timing and pricing details of our Amazon Unbox support will be announced shortly...

Kaleidescape and Other Set-Top Boxes

The NY Times has a piece focusing on set-top boxes that deliver movies to a TV, including Akimbo, MovieBeam, and Microsoft's Xbox 360. But the main attraction is Kaleidescape, a $27,000-and-up jukebox system that offers access to a library of DVDs using an elegantly-designed interface. (A new, lower-priced system will set you back just $10,000.)

Wilson Rothman writes:

    While a few nonbillionaires ... have convinced their families that a Kaleidescape is worth it, the company’s customer base mostly reads like the Forbes 100 list: chief executives and Saudi princes, some with more than 30 movie players installed on private yachts and Boeing jets.

    With clientele like that, the price is unlikely to drop again anytime soon. Michael Malcolm, the chief executive and founder of Kaleidescape, says he is too busy filling orders and, besides, it takes a lot of money to make the systems work as well as they do. If a Kaleidescape server finds a hard-disk glitch, it alerts company headquarters in Mountain View, Calif. Before the customer notices a thing, the company has sent a replacement hard disk. The customer simply slides the disk into the appropriate slot, and life goes on. Because of the way hard disks are arrayed, the failure of one will not result in the loss of any saved movies.

    Though Kaleidescape the product may be out of reach for most movie lovers, the concept behind it — a vast catalog of movies available instantly on your TV — is now appearing in many more affordable products. Soon the only question will be: Will you rent movies or buy them?

I've seen Kaleidescape demonstrated -- and it is really a nice way to browse through your DVDs and select one to watch. But much like Netflix, Kaleidescape is a business that is betting that physical DVDs will survive (and remain the most convenient movie-watching option) for a few more years, since their system doesn't yet have a way to download movies-on-demand from the Net.

Tuesday, September 26, 2006

Jeff Jarvis on the Future of Television

Jeff Jarvis posts the text of his keynote address at this month's Video on the Net conference in Boston. It included not only his vision for TV's future, but some great context about its past. A snippet:

    We see at last the perfect convergence that is leading to the explosion of TV:
    1. The equipment is getting better and cheaper and smaller. It literally puts TV production in our hands.
    2. The tools are getting better and easier and cheaper. We can create anything.
    3. Distribution is limitless and also cheaper and easier. See YouTube.
    4. And here’s the key element that we had to wait for before we could see the explosion of our new television. It is the same key factor that made blogs and podcasts explode. It is our means of marketing: The link.
    So now we can make anything, distribute anything, market anything. We own media.

    Second lesson: We debated for decades in media whether content or distribution was king. Turns out, neither is. Conversation is the kingdom. Trust is king. You can’t own all the content. You can’t control all the distribution. It turns out that trying to do either is extremely expensive – and, in our post-scarcity media universe, ultimately futile. In the old, closed world of media, owning content or distribution gave you the advantage. It gave you control. Now it just gives you an unbearable cost structure that millions of new competitors – us – are not burdened with. So what should media’s relationship with all of us be? Are we competitors? Or are we partners? If conversation is king, then we must be partners. For the big guys are not in control of the conversation anymore. We are.

    Which leads my third lesson, which I pompously call Jarvis’ First Law of Media (and Life):
    If you give the people control, we will use it.
    If you don’t, you will lose us.

Monday, September 25, 2006

What Movies are People Downloading? (And, Will Other Studios Join Disney on iTunes?)

- The NY Times has a chart today listing the top five movies people are downloading from CinemaNow and Movielink. The original `Pirates of the Caribbean' is #1 on CinemaNow; `Brokeback Mountain' is #1 on Movielink. `Underworld: Evolution' and `V for Vendetta' are the only two movies that show up on both lists. The Times also notes that CinemaNow's DVD-burning service only offers 103 titles.

- The implicit question of this LA Times piece is: when will other studios join Disney in offering movies for download on Apple's iTunes service? Joseph Menn writes:

    Jobs would have liked a crowd of moguls to show up [at the iTunes movie launch earlier this month] as a vote of confidence in technology he hopes will do for movies what iTunes did for music. But with only Iger on board, Jobs has just 75 films — all from Disney's library — to offer consumers.

    Jobs' problem is that the rest of Hollywood still fears alienating retailers, especially Wal-Mart Stores Inc., that sell and rent DVDs, producing half of Hollywood's revenue. Studios are reluctant for now to publicly endorse something that could speed the killing of the goose that lays the golden eggs.

    "The other studios want to wait and see how it goes," said Harold Vogel, an independent media industry analyst.

Saturday, September 23, 2006

Is Wal-Mart Threatening to Kneecap Studios that Do the Download?

The NY Post alleged yesterday that Wal-Mart had been pressuring studios not to make their movies available on Apple's iTunes Music Store. Tim Arango writes:

    Last year when Disney announced it would begin offering episodes of the hit shows "Lost" and "Desperate Housewives" on Apple's iTunes, the reaction of the world's largest retailer sent shockwaves through the entertainment industry.

    Wal-Mart, worried that offering the shows for viewing on iPods would cut into DVD sales at its stores, sent "cases and cases" of DVDs back to Disney, according to a source familiar with the matter.

    Now, following Apple's entrance in to the business of selling full-length films for download, the battle between Hollywood and its largest client is getting uglier, as studio executives say Wal-Mart has overtly threatened to retaliate if they go into business with Apple.

Wal-Mart disputed the report, though, in this Reuters piece:

    "Customers want to watch movies, and they want to be able to make the choice when and how they want to view them," a Wal-Mart spokeswoman said.

    "While we recognize there are various current and potential providers of this service, we are not dissuading studios from conducting business with other providers."

What's your bet: how long will it take Wal-Mart to dive into the digital download business itself? I'm guessing it won't happen until 2007, and that a Wal-Mart download marketplace won't make much of a dent, just as the company didn't succeed in the DVD by mail business.

Friday, September 22, 2006

What's YouTube Worth?

From DV Guru .... speculation about how much YouTube might sell for, if the company doesn't hold out for an IPO.

Wednesday, September 20, 2006

`Moving Pictures' - Jeff Skoll and Participant Productions

Fast Company has a story about Jeff Skoll and Participant Productions, in advance of the release next month of Richard Linklater's `Fast Food Nation,' which Skoll executive produced.

A snippet:

    ...Customers are attracted to a good product wedded to a sincere, virtuous mission. The social campaigns that generally roll out on the Web site with the release of each movie also function as very smart marketing campaigns for the age of the blog. For example, the progressive political organization promoted a "See the Truth" campaign to its 3 million members; more than 200,000 people pledged online to see An Inconvenient Truth and buy tickets for friends on its opening weekend to help it get picked up by more theaters. Truth was the most profitable film per-screen for a couple of weekends after its opening. Try pulling that trick with Pirates of the Caribbean 3.

Current TV/Yahoo Partnership (Plus, Digital Domain and YouTube)

Cool idea: Al Gore's Current TV and Yahoo are getting together to produce this site, which will blend one professionally-produced segment each day with 8-10 user-submitted segments. The main idea is to make sure all the user-submitted stuff is 'clean' (IE, no copyright infringement, porn, or profanity), so that Yahoo and Current can sell advertising around it. Of course, it may turn out that Net users prefer to watch edgier stuff...

The Wall Street Journal and NY Times have coverage of the deal. From Saul Hansell's piece in the Times:

    Amateur videographers whose clips are chosen for the Internet service will receive $100. If the clips are also broadcast on Current’s [cable] television network, the maker will receive between $500 and $1000. Videos that are not selected to be part of the Yahoo Current offering will be included on Yahoo’s broader site that includes user-contributed video.

In other news...

- Digital Domain has poached three senior execs from Industrial LIght & Magic.

- And YouTube, ABC, and Cingular have announced a contest for unsigned bands who have made music videos. Web site visistors will select their favorites, and the finalists will get airtime on `Good Morning America.'

Tuesday, September 19, 2006

Disney CEO Expects to Sell $50 Million on iTunes in One Year

That's the essence of this AP story. Disney CEO Bob Iger also said they'd sold 125,000 digital movies in the first week on iTunes, generating $1 million in revenue. (Disney, of course, is the sole studio selling full-length feature films via iTunes.) The AP's Gary Gentile adds, "Iger said selling shows online has not cannibalized sales of DVDs, nor has it hurt traditional TV viewing."

Morning links: Microsoft launches me-too YouTube competitor ... High-def breakthrough ... Horror flick debuts on AOL ... Hedge funds

- Microsoft is launching its own video-sharing site, to compete with YouTube, according to the Wall Street Journal. CNET's Rafe Needleman has an early review. He writes:

    I found nothing in the Soapbox product itself to propel it past other video sharing sites. It will live or die based on its content and its community.

(Worth reading: Bill Gates on YouTube.)

- Two engineers at Warner Bros. have patented a design for a single DVD that could contain a Blu-ray, HD DVD, and standard-definition movie, according to New Scientist. Wouldn't it have been easier for the studios to agree on a single high-definition format?

- Producer Adam Shapiro will debut his horror flick `Incubus,' starring Tara Reid, on Halloween. The novelty: it'll be available first as a digital download on AOL Red, a site for teens. The price: $7.99. It'll go on sale as a DVD a month later, writes LA Times reporter Chris Gaither. Cool experiment.

- The NY Times' Dealbook blog has a short item on why hedge funds are so interested in Hollywood film financing.

Monday, September 18, 2006

The New Licensing Opportunity for Movies and Music


To: Studio Chiefs, Network Heads, Record Label Presidents, Filmmakers, and Musicians
Subject: Your New Revenue Stream
Date: 9/18/06

When your first impulse is to sue because people are using your product in ways you don't like, it's always a good idea to examine the situation to see whether you're overlooking a new revenue stream.

When people started recording movies from TV onto videocassettes, Universal and Disney decided to sue Sony, which made the first widely-available VCR -- rather than diving head-first into home video, which now generates more money for the studios than ticket sales.

Right now, Internet users seem to enjoy making videos, often using copyrighted music and video. That's illegal, right? Sure, but it also hints at a new revenue stream for record labels, movie studios, TV networks, filmmakers and musicians.

There's no way for an individual to legally license a song for use in their home movie, or for a basement filmmaker to easily license a clip of video to use in a movie she's making. Established musicians and filmmakers, when they want to use a clip or a sample, can hire lawyers to "clear" the sample they want to use, and usually pay lots of money for the right to incorporate it in their work. But wouldn't you guess a much larger number of aspiring musicians and filmmakers might pay a smaller amount to license music and video -- providing they didn't have to hire laywers?

(And if you answer no, consider this... Auction houses probably would have told you a dozen years ago that the only people who wanted to sell things at auction were Vanderbilts and Cabots who owned priceless works of art, and that the only people who wanted to buy things at auction were similarly wealthy. The costs and hassles of selling something at auction were simply too much for the average schmo to bear. Then along came eBay, which is now bigger than every auction house in the world combined.)

There are three ways to approach this market.

- One is to have a set of license fees for using your stuff, probably based on the length of the sample, and the breadth of the release. (IE, the fee would cheaper if it's just being posted to YouTube or MySpace, and more expensive if you want to release it on a self-produced CD or show it in a neighborhood movie theater.) Would people pay for the right to legally use music and videos? I think many would. If I bought a song for 99 cents, I'd certainly pay another buck or two to be able to incorporate it in a video I made and not worry about being sued.

- The second way is for the music or movie companies to get a piece of the advertising revenue. Warner Music plans to try this with YouTube. But it works best for videos, since most people don't listen to or see advertising when they listen to MP3s. And what happens if a song or video uses many clips from many publishers? That starts to dilute the revenue for any one publisher.

- The third way is for record labels and movie studios to work more closely with technology companies, so that music and video incorporated in what the lawyers call a "derivative work" could better promote the original works. Imagine listening to a mash-up in your iTunes music player, and having the original songs available for purchase in a window on the bottom of the screen, under a heading that says, "This song samples from..." Similarly, imagine watching a video on YouTube featuring five minutes of the best car chases ever filmed. At the end, you'd see a list of the movies they came from (`Bullitt,' `The Fast and the Furious,' etc.), and be able to link over to a marketplace site to buy the DVDs or a digital download.

The creator of a musical mash-up or video might even earn a referral fee, based on the number of DVDs, CDs, or downloads his work helped sell.

Any of these three approaches, I believe, would help record labels, movie studios, TV networks, filmmakers, and musicians earn more money from works they'd already created. You'd still have to sue people who didn't play by the rules, but you'd also have a brand new revenue stream (or promotional engine) for your business.

Your thoughts?

Sunday, September 17, 2006

Two Stories on Linking the Net to TV

I've got a column in the Boston Globe today about the challenges of linking the Net to the TV set, in the wake of Apple's iTV announcement last week. Richard Siklos has a column in the NY Times that touches on that topic, and also discusses Web video business models more broadly.

From my piece:

    The most likely that Apple won't achieve total dominance of the Net-to-TV connection, as it has with digital music sales. ``Apple's iTV solution looks really elegant, but having said that, it's only one solution and it's not available yet," says Steven Starr, chief executive of Revver, a Web video-sharing service in Los Angeles. ``The problem of moving online content to your television is going to be solved by any number of people."

    But accessing mainstream movies and TV shows will only be part of what consumers will get from linking television with the Net -- and to my mind, the least interesting part.

    Far more interesting will be personalization services that supply you with content based on your interests; if you appreciated the movie ``Hotel Rwanda," you might also be interested in seeing an ad-supported documentary about recent developments in that country, or paying to download actor Don Cheadle's latest movie.

From Siklos' piece:

    The good that there’s gold in them there hills. Video delivered over the Internet is clearly shaping up to be an actual business that advertisers are interested in. The broadcasting (netcasting?) of television programs and clips on the Web moves the debate away from Internet-versus-TV because if TV executives put their best material online and get paid for it, the proposition becomes Internet-cum-TV.

    The research firm eMarketer estimates that video-related advertising will top $2.3 billion within four years. And let’s not forget that Google is on track to exceed $7 billion in revenue this year — and that is predominantly from old-fashioned, Yellow Pages-style text ads. Heck, they don’t even have pictures, let alone moving images.

    Much attention has been focused on the economics of selling digital versions of Hollywood movies (like in Amazon’s new Unbox service) as an alternative to DVD sales and rentals and to stem piracy. But what has yet to be exploited — what Google, Yahoo and many other aggregators are vying for — are pieces of the $60 billion or so that will be spent on television advertising in the United States this year.

Saturday, September 16, 2006

Digimart Lists Speakers for October's Global Digital Distribution Summit

Digimart's Global Digital Distribution Summit is taking place Oct 16 - 18 in Montreal. It focuses on how "innovative distribution strategies and new devices [are] radically transform[ing] the business of film," according to the site.

I'm participating, in some capacity, as are Ira Deutchman from Emerging Pictures, Susan Buice and Arin Crumley (`Four Eyed Monsters'), documentary director Robert Greenwald, HDNet Films co-president Jason Kliot, and filmmaker Lance Weiler (`Head Trauma,' `The Last Broadcast'), who was a pioneer of digital projection. The full speaker list is now on the site.

James Cramer: Here's What Viacom Should Do

James Cramer has a piece in New York Magazine about Viacom's post-Freston future. He writes:

    As interested as I would be in buying the much-loved Facebook, and as fascinated as I would be at having a crack at cultivating the PC-TV watchers of YouTube (moves that could get college kids, teens, and children hooked on Viacom), I’d buy Electronic Arts first. Why? Because EA owns the 13-to-34 demo, because video games produce successful movies, and because those games will soon be sold on the Web, not in stores, and buying EA would show that Redstone’s got a jump on the technology that will make such downloads happen. What’s more, Redstone can sell embedded ads inside the video games. And as the majority owner of a much lesser interactive-games company, Midway Games, he actually understands this market. Plus, because of the dearth of new gaming systems for EA to run on (Sony and Nintendo have been late in producing new hardware), EA is cheap right now—down twenty points from its high a year and a half ago. EA could be Viacom’s MySpace without the possibility of fickle audiences going elsewhere because EA is the only game in that town, with a proven category-dominating product. Ironically, Freston paved the way for this addition by purchasing Neopets, another game company for younger kids, and one that girls love. Dovetail Neopets with EA and you’ve got boys and girls hooked before they get to college and discover Facebook.

(Via the Risky Biz blog.)

Friday, September 15, 2006

CNN Money on Wal-Mart's Digital Download Plans

CNN Money has a speculative piece about Wal-Marts plans for offering digital movie downloads, possibly later this year.

Parija Bhatnagar writes:

    Wal-Mart (Charts) currently accounts for about 40 percent of all DVD sales in the United States. By launching its own service, industry watchers say Wal-Mart can protect that DVD market dominance.

    The retailer is still apparently debating price models. One option Wal-Mart is considering is a free digital download of the movie along with a purchase of the DVD version at a Wal-Mart store. Another option is letting customers purchase a download of the movie for a few extra dollars when they buy the DVD version at the store.

    Wal-Mart would make the digital downloads available through its Web site, according to executives.

(Via the Movie Marketing Update.)

Making and Marketing `Four Eyed Monsters'

Via the blog DVGuru...

A nice piece from about Susan Buice, Arin Crumley, and their movie `Four Eyed Monsters,' which is now screening in six cities around the country. They used cutting-edge (but cheap) digital tools to make it, and devised some novel strategies for promoting it (including a popular podcast series). According to the write-up, "the podcasts found a spot on Apple’s daily top 100 podcasts and have generated enough word of mouth to get the film into 18 festivals worldwide and screenings in six cities."

Fox uses MySpace (big surprise) to promote `Borat'

Users of MySpace who "friend" the fictitious Kazakh reporter Borat will earn a chance to see a sneak preview of the upcoming Fox movie `Borat.' (Fox and MySpace are both part of Rupert Murdoch's News Corp.) Here's the Forbes coverage and a piece from

(Of course, freebie sneak previews like this tend to attract about twice as many would-be audience members than the theater can fit.)

The Next Experiment with Release Windows: Morgan Freeman in `10 Items'

The LA Times writes about `10 Items or Less,' the Morgan Freeman-Paz Vega movie that will be out this December in theaters, and only a few days later available for legal download on the Net. Saith Freeman:

    "I think it will be the next biggest thing after the DVD phenomenon," Freeman says of transmitting full-length movies over the Internet. "Technology is leading us, and it's foolish to try to deny it."

ThinkFilm picked up the rights to the movie at the start of the Toronto International Film Festival this month; the pic was directed by Brad Silberling (`Lemony Snicket'), and it got a fairly nice review from Variety.

The three players behind the experiment are Freeman's production company, Revelations Entertainment, Intel, and ClickStar, a joint venture of Intel and Revelations.

Thursday, September 14, 2006

Microsoft's Zune & Social Sharing of Video

Microsoft revealed more details about its Zune portable media player, and the digital media marketplace they're building, today.

Initially, Zune looks like a me-too product, chasing after Apple's market-leading iPod and iTunes Music Store.

But here's something important that Zune will do that the iPod doesn't: allow for the social sharing of media from one Zune player to another. From the press release:

    Every Zune device creates an opportunity for connection. Wireless Zune-to- Zune sharing lets consumers spontaneously share full-length sample tracks of select songs, homemade recordings, playlists or pictures with friends between Zune devices. Listen to the full track of any song you receive up to three times over three days. If you like a song you hear and want to buy it, you can flag it right on your device and easily purchase it from the Zune Marketplace.

That's quite cool, and something I've longed to do ever since I bought my first-generation iPod.

How might sharing work for video? Well, first, it'd take longer to share a video than to share a song. But I love the idea of being able to beam you the first five minutes of a TV show I own, or the first minute of a music video, or perhaps the first 10 minutes of a movie (I imagine the content owner would be able to specify how much of a piece of content could be shared, and how many times it could be viewed). If you like it, you'd be able to flag it, and later purchase the entire video.

The result: everyone who buys a piece of video becomes a potential viral marketer of that piece of video.

(Here's some CNET coverage of the Zune.)

Wednesday, September 13, 2006

The Down Low: Blog on Video Business

I'm not sure how long this blog called `The Down Low,' from the trade magazine Video Business, has been in existence, but I'm just discovering it today. Good stuff on HD DVD and Blu-ray, movie downloads, viral videos, and Netflix.

Tuesday, September 12, 2006

The Big News in Apple's `Showtime' Press Conference Today

As I see it, the biggest news in Apple's press conference today in San Francisco is that Apple is hard at work on solving the problem of viewing Internet video on a television. The device, iTV, will be available in the first quarter of 2007, and will sell for $299. My assumption is that it will use a WiFi network from Apple (or another supplier) to beam video to a small hard drive on top of a television.

As for downloadable movies, Disney is the only studio working with Apple and iTunes as of today. Interestingly, buying a new release in its first week (or as a pre-order) will cost just $12.99; the cost then goes up to $14.99 for a while.

Here's the coverage ... NY Times ... Wall Street Journal ... and Apple's video from the event. Here's Spymac and The Seattle Times more specifically on iTV.

Friday, September 08, 2006

Amazon's Unbox: Barriers to digital downloads

The NY Times reports that Amazon has launched its digital download service, AmazonUnbox. A snippet from Saul Hansell's story:

    Amazon will sell current and back titles of all major movie studios except Disney and has programs from several dozen television networks as well. Indeed, Amazon is the first video service to license the original “Star Trek” series.

    For many new movies, Amazon’s $14.99 maximum price is lower than other download services, like Movielink, which sells most new releases for $19.99. The studios have largely set the wholesale price of downloads above $14.99 hoping to keep the retail price at $20 or above. They do not want to alienate Wal-Mart, by far the largest movie distributor, which uses discount DVD’s to attract shoppers.

    Amazon is pricing some current movies higher than its $14.99 cap. For example, “Silent Hill” from Sony is $16.87 and “Rumor Has It” from Warner Brothers is $19.62.

To entice you to try the service, Amazon is offering a free TV show as a sample.

DVGuru has already taken Unbox for a test drive... and given it a decent (but not stellar) review. And Chris Gaither has a report in the LA Times. In Businessweek, Guba's CEO says the missing link is still an easy way to watch digital movies on a TV set.

My prediction: digital downloads will be a product that only appeals to a niche market for the next year or two. I simply think that buying DVDs, renting from the local video store, ordering video-on-demand from cable, and subscribing to Netflix will remain simpler and more convenient ways to acquire new movies. Who gonna buy digital downloads? My best guess right now is business travelers, who want a movie or two available for viewing, but don't want to carry DVDs around. The big barriers for now? Price, download time, disk space, and ease-of-use.

Thursday, September 07, 2006

Two from the NY Times: Opera on the big screen, and new Entertainment Technology program at Arizona State

- The Metropolitan Opera has a killer idea: why not make great opera performances more accessible to people who don't live in Manhattan? They're using the nascent network of digital cinemas, and starting with a trial run of six live performances, the first of which will be on December 30th. Daniel J. Wakin writes:

    [Met general manager Peter] Gelb, who first revealed his hope to create such simulcasts in February, said they would be broadcast in high definition with “fantastic surround sound.” They will be shown in 100 to 200 theaters at first, he said, and then 200 to 300, with tickets costing around $18 in the United States. (Met ticket prices this year run from $15 to $375.) The theaters have between 200 and 400 seats. The performances will also be broadcast on PBS, which is the co-producer.

- Arizona State University is designing a new program that will focus on the intersection of the entertainment industry and new technology (an intersection I know and love.) They're calling it EnterTech. Sharon Waxman writes:

    “We know that the dominance of 35-millimeter film is over,” said Peter Lehman, the director of the film and media studies program, and one of two professors who teaches the [first EnterTech] course. “We’re in a period of massive change and uncertainty. We need a new kind of person in this industry who understands that entertainment and technology are converging, and who is fluent in the concepts and the language of both.”

Later, she quotes Lehman again:

    “We are not turning out people who are going to be editors, cinematographers, writers, directors,” said Dr. Lehman, who observed that there are too many such film schools already.

    “Ideally we should be teaching students to think of film in relation to new media in a quite different model than we had in the past,” he continued. “It’s not as simple as, ‘We need content for a new delivery system.’ It’s more, ‘We need to understand the new technology and how it will shape entertainment.’ We’re creating a new industry job, as it were.”

Wednesday, September 06, 2006

Debut of Amazon and Apple movie downloads nears (plus, Netflix and `Nightmare')

Apple and Amazon are both expected to announce movie download services this month... and Apple may announce a new version of its iPod, too -- perhaps with a bigger screen to make video viewing more pleasant, or more storage capacity? Here's the advance speculation from the LA Times and The Wall Street Journal. The Journal writes:

    Amazon pricing for movies through its service, called Amazon Unbox, will likely range greatly from title to title. Studios aren't sure what the final retail prices will be for their titles, but one executive estimated the bulk of movies will be sold to consumers for between $9.99 and $14.99, though some could be cheaper or more expensive. Amazon will also rent titles.

    The menu of Amazon offerings is expected to include television shows, along with old and new movies. The service will work through a Windows Media-based player and content can be transferred to Windows Media video-compatible portable devices. A spokesman for Amazon, which is based in Seattle, declined to confirm the details of the new service.

    Apple, meanwhile, plans to sell movies for just a handful of different prices, starting at $9.99 for catalog titles and going up to $14.99 for new releases, people familiar with the matter say. Currently, the company has lined up Disney, which counts among its board members Apple Chief Executive Steve Jobs.

    Apple has been unable to sign up all of the studios in large part because they can't agree on price. Many studios want more than the $14.50 or so Apple is offering to studios as a wholesale price per movie so they can create similar or bigger margins than they get with physical DVDs. Although DVDs generally cost more, around $18 at retail, studios have to factor in packaging and distribution, costs they don't have to worry about for electronic copies of movies.

Two other, unrelated links:

- Mike Curtis links to several stories, including a great piece in Wired, focusing on Netflix's move to acquire distribution rights to more indie movies. One reason for this: if Netflix ever launches a digital download service of its own, it needs content (and for various contractual reasons, it'll prove very hard for Netflix to secure the rights to studio content).

- Cartoon Brew has a few scraps about the upcoming re-release of `Nightmare Before Christmas' in 3-D.