At Sundance, some new thinking about distribution

I was really encouraged to see this piece in the New York Times today, 'At Sundance, New Routes to Finding an Audience,' Brooks Barnes. It suggests that at least a few filmmakers who've gained entrance to one of the most prestigious indie film fests are thinking about using it as a launchpad for their distribution strategy.

From the piece:

“We just want to encourage people to throw the traditional model out the window,” said Michael Mohan, the writer-director of “One Too Many Mornings,” a coming-of-age comedy that had its premiere here on Friday.

Simultaneously, Mr. Mohan let users at OneTooManyMornings.com download the movie for $10 and started selling DVDs for $20. For $35, customers get a DVD, a poster and a piece of the sofa featured in the film. Mr. Mohan is also selling the theatrical rights via the Web site for $100,000. “Forget a bidding war,” he said. “Whoever gets to their laptop the fastest gets it.”

YouTube introduced its long-awaited movie rental option at this year’s festival by offering five Sundance films as soon as they had their premieres. The rentals — including “One Too Many Mornings” and “Bass Ackwards,” another film that bypassed the theatrical window — will cost $3.99.

And for the first time, Sundance will make films available in about 40 million homes through cable and satellite on-demand services simultaneously with premieres. The program, Sundance Selects, includes “Daddy Longlegs,” about being torn between adulthood and childhood.

And the data from 2009 says...

Here's a great chart published in the Wall Street Journal today about how Americans spent money on movies in 2008 and 2009:



A key passage from the related article, by Sarah McBride:

For studios, which count on income from home entertainment to underwrite growing production costs, the trend represents a giant headache. In the early 2000s, studios began counting on the cash bonanza generated by consumers' building up libraries of DVDs. Now, they will have to alter budgets to reflect the shrinking DVD income stream.

Hollywood is already offering more ways for consumers to watch movies at home while bolstering studio coffers, including digital delivery, but households aren't embracing them quickly enough to make up for eroding DVD sales.

While Blu-ray disc sales are growing at a rapid rate, they too represent just a fraction of DVD sales. ...Instead, consumers are flocking to rentals, which represent considerably smaller profit for the studios, especially given the proliferation of $1-a-night rentals from kiosk operators such as Coinstar Inc.'s Redbox.

2009 was an amazing year for theatrical revenues -- perhaps a high water mark, thanks to the recession (movies offer an affordable night out) and an unusually strong and diverse release slate?

It seems clear from these trends that, for today, the bulk of revenues will still be from theatrical releases (if you can promote them and get butts in seats) and DVD sales and rentals. But indies need to have a smart strategy for digital, since that market is poised to grow -- and indies will be more flexible than the studios about pricing, free samples, and release windows, which could give them an edge. (Here's a New York Times story from this morning about how the studios are struggling to make their DRM-wrapped movie files more portable and flexible... without dropping the DRM, of course.)

What do you think 2009's revenue trends mean for indies?

Catching Up: Peter Broderick Video, DVD Data, 'Inbound Marketing' book, SMPTE Talk

- Filmmaker Magazine this week published an interview I conducted with Peter Broderick at Sundance this year, talking about new approaches to indie film distribution. (You can tell I have the usual Park-City-in-January cold.) I'm planning to post the full 30-minute interview here soon. This video is part of a series I'm doing on the future of entertainment, underwritten by the nice folks at Akamai. The idea was to take some of the topics we discussed at The Conversation last fall in Berkeley and make them more accessible to people anywhere in the world. I invite you to embed the video wherever you like, link to it, or comment on it.

The Future of Indie Film Distribution: Peter Broderick from Scott Kirsner on Vimeo.

This video, of course, is also a nice little appetizer for the Distribution U. workshop Peter and I are doing next Saturday, November 7th, at USC.

- This NY Times piece from Monday is really worth a read: "Studios' Quest for Life After DVDs." Here's just one juicy passage from Brooks Barnes' story:

In the first six months of 2009, revenue from disc sales declined 13.5 percent, to $5.4 billion, according to Mr. Morris’s evaluation of Digital Entertainment Group data. A $200 million uptick in Blu-ray sales partly offset a $1 billion decline in DVD sales. Over all, home video revenue declined just 4 percent, helped by a spike in rental revenue.

That bleak picture has studios now openly discussing what they have known privately for a long time: DVDs will continue to play a role, but it may be a supporting one to digital.

“DVD is going to remain very viable, but you’ve also got a strong base of interest in digital consumption,” Mr. Chapek of Disney said. “I see a peaceful coexistence.”

- The best book I've read about marketing and social media in a long while was just published this month. It's called Inbound Marketing: Get Found Using Google, Social Media, and Blogs. This is the kind of book I guarantee you'll find useful if you work in marketing or are trying to sell DVDs or downloads of a film (or other creative work.) It was written by two of the founders of a marketing firm in Boston called HubSpot, and the company also runs this weekly video podcast about Internet marketing, which you can subscribe to (for free) in iTunes. (That, by the way, was not a paid promotion...just an honest endorsement of something worthwhile!)

- Variety was kind enough to run some coverage of my keynote talk last Wednesday for the annual SMPTE Tech Conference in Hollywood. (This was a version of my talk about Inventing the Movies, with lots of movie clips. It was fun to have a few digital cinema pioneers in the audience whom I'd interviewed for the book back in 2006 and 2007.)

What Percentage of DVDs Are Rented Today Through Vending Machines?

The NY Times covers the dispute between the studios and Redbox today. (Just to recap, the studios worry that dirt-cheap $1 rentals via kiosks will hurt their DVD sales and even could put a crimp on VOD and digital downloads... and so they're trying to withhold DVDs from Redbox until four weeks after their initial DVD release.)

But there's this interesting tidbit in the story about where the DVD rental business stands today:

Redbox and its vending rivals now have 19 percent of the rental market, compared with 36 percent for rent-by-mail services (Netflix) and 45 percent for traditional stores, according to the NPD Group, a market research company. NPD estimates that vending will grow to a 30 percent share by the end of next year, at the expense of traditional stores.

I didn't realize that vending machines and Netflix now represent the majority of the DVD rental biz....

What Happens to DVD Extras in the Digital Age?

One interesting phenomenon of the DVD era is how much bonus material is often packed onto the disc: from "making of" documentaries to Q&As at film festivals to director's commentary to fan-generated content. Blu-ray DVDs come with even more goodies.

But one question I've been thinking about lately is: what happens to all this stuff in an era when most people consume movies as digital downloads, sent directly to a PC, mobile phone, or TV?

You'll notice that when you download or rent a movie today from iTunes, Amazon, or Movielink, you're getting the feature only. There's no way to buy, for instance, Robert Rodriguez's fun "Ten Minute Film School" and "Ten Minute Cooking School" videos that have shown up on his DVDs. You can get commentary from Francis Ford Coppola on the Blu-ray release of the "Godfather" trilogy, but not when you download "The Godfather" from Amazon's video-on-demand department.

Here are two scenarios. I'm curious what you think (and perhaps you envision other scenarios):

Scenario #1:

All of these goodies that are today DVD extras eventually become available on the Internet for free. They're used to help market the original theatrical release of the film and get people into theaters, or later to get persuade to purchase or rent the digital version. (Remember, this is a world where DVDs are fading into the sunset.)

Scenario #2:

Some of the goodies become available on the Internet to market the movie in advance of its release. But some expensive-to-produce, in-depth pieces of content (like a great "making of" documentary, or an interview with an ordinarily reclusive director) carry a price tag. For an extra buck on your digital rental (or an extra two bucks on top of the download-to-own price), you might get this bonus material. Or, you might buy it a la carte for a couple bucks after you've seen and enjoyed the movie.

Here are a couple of interesting examples of content that's circulating on the Internet to promote movies, which just a few years ago would've only existed on DVD.

- Maurice Sendak talks with director Spike Jonze about how the book "Where the Wild Things Are" was originally received. Intended to promote Jonze's "Wild Things" feature film, which is coming out this October.



- William H. Macy and Kate Micucci sing "It's Time to Get Laid" (and play ukelele!) to promote the DVD release of the indie comedy "Bart Got a Room."



What do you think? I certainly would like to see filmmakers find a way to earn extra revenue from the extra stuff they produce -- but perhaps it'll be just as valuable as an engine that helps drive ticket or download sales.

Worth Reading This Monday: Turning Distribution Upside-Down... Make More Movies?...Redbox + Studios

- Filmmaker and futurist John Ott has this very thought-provoking post on what would happen if theatrical screenings became the equivalent of concert tours, and if movies were released in other formats first to build up demand for those screenings. Ott writes:

...Why not reverse the cycle and make the other distribution formats the advertising (much cheaper) and build to theatrical events. You could theoretically have so few screenings (such scarcity) that the filmmakers or actors could make personal appearances. You wouldn't have to shell out for the theatrical tour until you knew, from statistics on download and home video sales, that the movie had a sizable audience (and you would also have geographical stats, so you could tell where the highest concentrations of those fans were).

The infrastructure for theatrical screenings currently exists. Most money is already made in shorter and shorter windows, theatrically. Why not confine it? That's a scarcity that the digital revolution has left untouched.

- The media analyst firm SNL Kagan apparently concluded that studios should make more movies, not fewer. (Something CinemaTech has been advocating for a few years now...) In a scenario based on 611 major studio releases between 2004 and 2008, a 15-movie slate would have done much better than slates with just five or ten titles.

- Interesting Wall Street Journal piece today on the relationship between Redbox and the studios. The central question is, will Redbox cannibalize DVD sales? From Sarah McBride's piece:

One studio-commissioned study showed that 9% of people who visited Redbox kiosks ended up renting a title they had previously planned to buy, and 25% said they would buy fewer DVDs this year because they could rent them at kiosks.

Redbox says its research shows many customers take a "trying before buying" approach and end up buying the DVDs after renting, and that its customers purchase DVDs at the same rate as Blockbuster Inc. and Netflix Inc. customers.

Every time a customer rents from Redbox rather than Blockbuster, the studio is missing out. While other companies cut the studios in on revenue each time they rent a movie, Redbox doesn't. With Redbox, the only income studios see is when the retailer buys the movies for its kiosks.

The Redbox Experience

I rented two movies from my local Redbox kiosk in the past week ('Rachel Getting Married' and 'Marley & Me' -- the latter chosen by my spouse, I feel compelled to add). I used a free credit coupon that you can get from their Web site for 'Rachel,' and we paid $1 for a one-night rental of 'Marley.'

Here's my take:

- Redbox is a classic low-end disruptor, as "Innovator's Dilemma" author Clay Christensen would call it. They are attacking the video market with a cheap price, and targeting the mass market, where video selection is not all that important -- they just want the big hits. (Each Redbox kiosk stocks 200 titles.) It's cheaper, even, than renting an on-demand movie from the cable company.

- The selection ain't bad. Our local kiosk had at least four or five titles that seemed worth watching, and I don't feel like my tastes would qualify as "mainstream."

- I wonder if movies stop showing up on the kiosk's screen when they're not available. Hard to tell how easy or hard it is to rent hot new releases from the kiosks. (Perhaps you'll comment.)

- Are you old enough to remember the early days of ATMs, when banks that had them only had one, and customers weren't very familiar with how they worked? Redbox is like that. Since there's one kiosk, if you get in line behind someone, you may be waiting a while. Similarly, if you're at the kiosk and want to spend a few minutes considering the choices, you may feel rushed by someone tapping their foot behind you. (That, my wife explained, was what resulted in 'Marley & Me.')

- The experience was perfectly pleasant, though I would've liked to see some star ratings or reviewers' comments attached to each movie description. Even if you returned a movie a day or two late, you'd still be paying just $2 or $3 for the rental, and wouldn't feel like you'd been fleeced.

- My local Redbox is near the exit from the grocery store. They're going to get people to rent movies on nights when they might not have stopped by the video store. So this will "steal" some time from TV and pay-per-view.

- With 15,400 kiosks already up and running, and one new one being installed every hour, Redbox is also gonna kill plenty of local video stores and hurt the surviving chains. After our first rental, my wife said, "Let's not use this again. I don't want the local place to go out of business." (And we're already Netflix subscribers, visiting the local video store 6-8 times a year at most...)

Your thoughts?

Netflix vs. Redbox

Interesting article in yesterday's New York Times about the growing competition between Netflix and Redbox, the DVD-rental kiosk business that is owned by Coinstar.

Amazing facts: a Redbox kiosk stocks 200 titles (mostly new releases). They have more than 15,400 kiosks operating today, and are adding one new kiosk every hour. The president of Redbox is an ex-Netflix executive, Mitch Lowe.

I see Redbox's kiosks threatening local video stores more than Netflix...given that you still have to pay a $1 fee for every day the movie is late... and given that renting from Redbox, like the video store, requires a trip in the car (rather than just a trip to the mailbox.) Netflix is auto-magic; Redbox requires effort. (Not to mention Netflix's movie streaming service, which is pretty solid -- a good way to either sample movies you might want to watch on DVD, or watch entire movies if you don't care that much about resolution.)

But I'm surprised by some of the titles Redbox carries, like 'Waltz with Bashir,' 'W,' 'Religulous,' and 'Miss Pettigrew Lives for a Day.' You can also reserve a DVD on the Web site, to make sure it's still available at your closest kiosk when you arrive.

Have you tried Redbox yet? Do you use it regularly? What's the experience like?

(Update: The Wall Street Journal just posted a great story about Netflix's strategy that references Redbox.)

Audio: Sunday's Panel on 'Where Film & Internet Collide' at the Apple Store SoHo

There was a really great crowd at the Apple Store SoHo yesterday for the panel that IndieGoGo organized about how the Internet is changing production, promotion, and distribution.

A bunch of folks had Flip cams (and other cameras) in the audience, so if you recorded video of some of the panel, do post a link to it in the comments here.

I've got some rough audio (listenable, but recorded on my iPhone) of the entire panel, which runs 90 minutes. Slava Rubin of IndieGoGo talks first, then me, then Gary Hustwit, Noah Harlan, and Chris Roberts (just to give you a feel for people's voices.) Gary makes docs... Noah does narrative and transmedia stuff... Chris mostly narrative.

You can read some tweets from the panel here. Some interesting tidbits: we talked about how to promote your film on Twitter, various funding and business models for film and Web video series, and how much life the DVD still has in it (doc-maker Gary Hustwit predicted that this is the last year he'll make DVDs for his films, and speculated about a really nicely-designed USB drive that would contain one of his films.) We also bashed iTunes a bit for being so impenetrable to indie film and video folks who'd like to sell their work there.

My favorite tweet about the panel: "'Where Film & Internet Collide' panel is the MOST informative event at NYC#internetweek hands down..." I didn't attend other events at Internet Week, but I'm sure that person is right.

Here's the MP3 file, or just click play below.

Interesting Court Case: RealNetworks vs. the MPAA

The New York Times has a great piece today on a court case that begins in San Francisco today, over the issue of whether you have the right to take a DVD that you own and store a digital copy of that content on your own computer.

From Brad Stone's piece:

The case is ostensibly about RealDVD, a $30 software program that allows users to save digital copies of Hollywood DVDs to their computers — a capability the movie industry strenuously objects to, worrying that it will stimulate piracy and undermine the budding market for digital downloads.

But the outcome of the trial, set against the backdrop of plummeting DVD sales, could also have more far-reaching effects on the future capabilities of the DVD player — a device connected to millions of television sets.

Before it started making RealDVD software for computers, Real was also developing DVD-saving software that it hoped to license to manufacturers of DVD players, according to the company’s executives and legal filings in the case.

That software, which the company refers to by its internal name, Facet, would allow companies like Sony, Samsung and Toshiba to sell DVD players capable of making digital copies of all discs, even movie DVDs that have anticopying software, called C.S.S.

The owners of those devices could save copies of their DVDs to watch later — much as people use digital video recorders like TiVo to save live television programs.

Here's some earlier CinemaTech coverage of the suit, filed last October.

This is just the latest in a line of cases like Sony Corp. vs. Universal (the Betamax case) and MGM vs. Grokster... and the outcome will be important.

A Coupla Monday Links

Just sharing some stuff worth reading (and viewing) that I collected over the weekend:

- NY Times piece on declining DVD revenues. Movie attendance is up 14 percent this year so far, compared with 2008... but sales of movies newly-released on DVD are down 40 percent.

- Robert Greenwald's real-time approach to documentary filmmaking, with 'Rethink Afghanistan.'

- Some great videos from January's "Art House Convergence" gathering, which took place just before Sundance.

- Anne Thompson shares some links related to the debate going on between Mark Cuban and Avner Ronen, CEO of Boxee, the company that makes open source software for set-top boxes. The focus is on the future of channels, bundled content, and a la carte content consumption.

- Noah Harlan has some thoughtful responses to our SXSW breakfast conversation last week.

The Reality of DVD/Digital Revenues Today: 90-10

I took just a few notes while I was moderating yesterday's SXSW Film Fest panel on 'The Future of DVDs and Digital Distribution.' It was populated with execs from New Video (one of the biggest funnels that gets indie films onto iTunes), Cinetic Rights Management, and SnagFilms, but the folks who really made the panel, I thought, were filmmakers Gary Hustwit and Morgan Spurlock. Unlike most of these panels, where people talk in generalities, this time we got some specifics about where we are today.

Hustwit and Spurlock and the other panelists seemed to agree that even if you can get your film placed on a few of the big digital marketplaces, such as iTunes, Hulu, Snag, and Netflix's streaming service, you'll do well today to earn about one-tenth the revenue that you earn from DVD. They seemed to agree that there's about a 90/10 breakdown today, in terms of the ratio of DVD revenues to digital.

Hustwit said that 'Helvetica' has earned about $60K in digital revenues so far... and it's among the top ten documentary rentals and downloads on iTunes.

Spurlock's film 'Super Size Me' is among the most popular films on SnagFilms, the site that sells advertising around documentaries and shares a slice of the money with filmmakers. Yet he said that 'Super Size Me' and 19 other films he'd supplied to the site earned just $1,200 from Snag over a two-month period. 'Super Size Me' alone sold almost 70,000 DVDs in the last quarter of 2008, he said.

"If you’re looking to pay your rent [with digital distribution], not so much," Spurlock said. "But if you’re looking to pay your phone bill, you have a great chance."

Steve Savage from New Video and Matt Dentler from Cinetic Rights Management also shared a bit about the fees they charge filmmakers when they assist with digital distribution on various platforms. After the platform takes its cut (iTunes takes 30 percent of revenues, for instance), New Video takes about 15 percent more... and Cinetic takes a 25 percent fee.

Hustwit was quite vocal about urging filmmakers to take the DIY approach whenever possible." Why are we building other people’s businesses when we could be building our own," he asked. But even he relies on New Video to get films onto iTunes.

I asked Savage what the #2 digital marketplace is, after iTunes. He said it's Microsoft's Xbox gaming platform.

I asked Rick Allen, CEO of SnagFilms, whether he could share with us the percentage of people who watch streaming films on Snag and later go on to buy the DVD. He said there isn't a good average, but that less-well-known films tend to have a higher "conversion rate" for DVD sales than some of the bigger name docs on the site.

Here's some coverage of the panel from Web TV Wire... IndieWire (owned by SnagFilms, incidentally)... Scott Macaulay at Filmmaker Magazine.

South by Southwest: Panels on DVD, Digital Distribution, and Audience-Building

I'm looking forward to South by Southwest next month, in Austin.

I'll be doing two panels, and also hoping to see two docs made by people whom I've gotten to know: 'RiP: A Remix Manifesto' and 'Winnebago Man.'

I'll also be doing two panels...

On Sunday, March 15th: 'Building Your Audience Online.' The theme here connects directly to my next book, 'Fans, Friends and Followers': how do you build an audience for your work, and ideally get that audience to support you? Panelists include:

Natasha Wescoat, Artist/Blogger, Natasha Wescoat Inc
Jonathan Coulton, Musician
Brett Gaylor, Filmmaker, 'RiP: A Remix Manifesto'
Burnie Burns, Rooster Teeth Productions ('Red vs. Blue')
Markos Moulitsas, The Daily Kos

Then on Monday, March 16th: 'The Future of DVD and Digital Distribution. How long will physical DVD sales remain a viable business (and will Blu-ray help prolong their lifespan)? How are filmmakers selling digital downloads and rentals on iTunes and other outlets, and how do digital revenues stack up? Panelists include:

Matt Dentler, Cinetic Media
Rick Allen, CEO, Snag Films
Gary Hustwit, Director, 'Objectified' and 'Helvetica'
Steve Savage, President, New Video
Morgan Spurlock, Filmmaker, Warrior-Poets

Of course, I'll try to post notes and/or audio afterward. The full SXSW Film panel schedule is here.

I will also be doing the pre-release for my new book, 'Fans, Friends and Followers,' at SXSW. I'll have a few early copies for sale, and will be doing a signing at the SXSW Bookstore on Monday, March 16th at 1 PM.

Hope to see you in Austin!

Audio & Video: Sundance panel on 'Models & Experiments in Indie Distribution'

Just wanted to post some rough audio from yesterday's distribution panel at Sundance... lots of good advice about theatrical, DVD, and digital distribution, including mini case studies of 'Ballast' and 'Good Dick,' two Sundance films from 2008.

The audio is a bit quiet at points (recorded on my iPhone), so crank it up. Sundance will usually post higher-quality audio to iTunes in a few weeks, and video often shows up on the Sundance site.

The MP3 is about 1 hour and 18 minutes long.

Update: The official Sundance video is now up on YouTube:

Part 1:

Part 2:

Dr. Horrible DVD: The Reviews are In

NewTeeVee ran a very positive review of the Dr. Horrible DVD, released just a few days ago as an Amazon.com exclusive.

What's interesting is that director Joss Whedon decided to publish the DVD using CreateSpace, Amazon's DVD-or-download-on-demand division.

Also interesting to check out how the Dr. Horrible fan community is evolving on the official site.

From NewTeeVee's assessment of the DVD:

As for special features, the centerpiece of the DVD is definitely Commentary! The Musical, a full-length commentary track that is a completely original musical in its own right. Redefining post-modernism (”I think you just broke the ninth wall” is a remark made towards the end), Commentary! is actually a fun, behind-the-scenes glimpse of the production, heavily laced with inside jokes set to music very nearly as good as that in the actual production. There is an entire ballad about the video game Ninja Ropes, which they all played on their iPhones while on set (Nathan Fillion holds the high score), and co-writer/Groupie No. 2 Maurissa Tancharoen sings a song about how she didn’t get cast as Penny because “no one’s Asian in the movies.”

Here are some earlier pieces where I've written about the significance of the Dr. Horrible experiment.

One Last Christmas for the VHS Tape

From the LA Times, 'VHS Era is Winding Down. The article is a brief history of the VHS format (though it neglects to mention Betamax, the predecessor to VHS.)

Here's a snippet:

The last major Hollywood movie to be released on VHS was "A History of Violence" in 2006. By that point major retailers such as Best Buy and Wal-Mart were already well on their way to evicting all the VHS tapes from their shelves so the valuable real estate could go to the sleeker and smaller DVDs and, in more recent seasons, the latest upstart, Blu-ray discs. [Ryan] Kugler, [president of Distribution Video Audio Inc.] ended up buying back as much VHS inventory as he could from retailers, distributors and studios; he then sold more than 4 million VHS videotapes over the last two years.

Those tapes went to bargain-basement chains such as Dollar Tree, Dollar General and Family Dollar, and Kugler's network of mom-and-pop clients and regional outlets, such as the Gabriel Bros. Stores in West Virginia or the Five Below chain in Pennsylvania. If you bought a Clint Eastwood movie at the Flying J Truck Stop in Saginaw, Mich., or a "Care Bears" tape at one of the H.E. Butts Grocery stores in Texas, Kugler's company probably put it there. He also sells to public libraries, military bases and cruise ships, although those clients now all pretty much want DVDs.

Kugler estimates that 2 million tapes are still sitting on shelves of his clients' stores across the country, but they are the last analog soldiers in the lost battle against the digital invasion. "I'm not sure a lot of people are going to miss VHS," he said, "but it's been good to us."

Universal: Let's Stamp Out $1 Movie Rentals

The Journal has a great piece today about Universal's campaign against Redbox, a company that operates 12,000 DVD rental kiosks in the US.

The basic issue is that while consumers love renting movies from the kiosks for $1, Universal feels that, A, the kiosks threaten important partners like Blockbuster Video, and, B, don't cut Universal in on a share of the rental revenue. (They just purchase the DVD, and that's it.)

From Sarah McBride's story:

Blockbuster, which must rent and staff stores, might charge as much as $4.99 for the same rental. Last week, Blockbuster said it was testing renting some classic movies for 99 cents, because of factors such as the poor economy. It is also rolling out DVD kiosks of its own, starting with about 50 kiosks during the next few weeks at various retail locations such as convenience stores.

Big retailers such as Blockbuster typically give studios a portion of rental revenue on top of purchasing the DVDs they rent out. But Redbox doesn't cut the studios in on rentals.

...In addition, studios claim that stuffing DVDs in kiosks may cheapen the underlying product. "The studios have been worried about the Redbox model from day one," says Tom Adams, president of Adams Media Research. As a studio, "Why would I help you build a business that charges a dollar for a product I'm trying to sell for $20?"

So let's recap: New technologies that make movies more accessible and affordable to consumers... Hollywood still hates 'em.

Disney, 'Sleeping Beauty,' and 'Kitt Kittredge': Help Me Understand This

I freely admit that sometimes I am not the brightest bulb in the chandelier, so perhaps you can help me understand this...

While I was on my book tour in October, I kept seeing ads on billboards and bus shelters for Disney's release of 'Sleeping Beauty.' (I also read this review in the New York Times.) Disney refers to this as the first of its "animated classics" to be released on Blu-ray.

There are two options for those who want to buy 'Sleeping Beauty.' For about $24 on Amazon, you can get a package that includes a Blu-ray DVD and standard-definition DVD. (The Blu-ray disc has some interactive BD Live features, too.) Or for $15, you can get a two-disc standard-definition DVD set.

What you cannot do is download 'Sleeping Beauty' on Movielink, CinemaNow, iTunes, Amazon, or any other legal marketplace for digital movies.

I happened to have a chance to talk with two execs, one at Disney and one at Pixar, about the situation.

My point: why spend all that marketing money to remind people about the existence of a 50-year old movie if you're not going to offer it in all the formats people might want to watch it in?

Also, Apple said last year that there were 500 million active iTunes users, and about a million new downloads of the software every day. The most optimistic projections about Blu-ray players envision that there will be about ten million of them in use by the end of this year. (And yes, that includes those built in to Sony's PS3 game console.)

So you're going to spend millions of marketing dollars to sell to a potential audience of 10 million instead of 500+ million? I own some Disney stock, and that don't make sense to me as a shareholder.

I heard a number of rationales for why Disney would re-release a classic on disc, but not make it available to families that wanted a digital download to watch on their laptop, iPhone, or iPod. Among them:

- We'll eventually do a digital release of 'Sleeping Beauty' and we'll do another marketing campaign then.
- 'Sleeping Beauty' is more targeted at Disney-philes and collectors, not actual children
- We want to promote the Blu-ray platform
- We feel people will be confused by our promotion of Blu-ray and BD Live as a high-quality, interactive, high-pixel-count experience...if they are also presented with the option to buy a lower-quality digital version.
- You have to master a movie all over again especially for the download version.
- Movies sold on iTunes just don't look very good. (This ignores the fact that iTunes, Movielink, and CinemaNow all support HD or near-HD content.)

Contrast Disney's approach to the one Warner Bros. took with its release of 'Kitt Kittredge' last week. The movie is available on iTunes, Movielink, or Amazon as a $3.99 rental or $14.99 download. (For some reason, the download on Movielink is a bit more expensive.) The $16 standard-def DVD comes with a digital copy for your PC or Windows portable media player, as does the $27 Blu-ray disc.

(Unfortunately, the Warner Bros. "digital copy" won't play on the iPod or a Mac. That's a problem, and it makes Apple owners feel like they're paying for something extra that they can't enjoy. But at least interested viewers can purchase an iPod/Mac-compatible copy from Apple.)

So would someone explain to me how the Disney strategy makes sense?

How Will the Recession Impact Hollywood?

The LA Times has a great piece exploring the ways that an economic downturn will affect television and movies. Essentially, consumers seem to be shifting consumption online (where they often find the same content for free, on sites like Hulu and YouTube, that they'd have to pay for via cable or Netflix). For media companies, profits are much smaller (at least today) from those online delivery methods. That means that media companies are earning digital dimes instead of analog dollars (as many folks, including NBC's Jeff Zucker, have put it.)

From Dawn Chmielewski's piece:

The endless stream of free content, through legitimate services as well as pirate sites, appears to be shifting viewing habits more quickly than industry executives had anticipated -- or intended. That creates a dilemma for media companies because the Internet generates substantially lower revenue than established business models -- 30-second TV commercials and home video sales -- which have long supported the costly economics of TV shows and movies. That's not Hollywood's only problem.

When Midori Connolly's family business in San Diego, which supplies audiovisual equipment for conferences, began to feel the economic slowdown this summer, she and her husband trimmed expenses.

The monthly subscription to DVDs-via-mail service Netflix was the first to go. Now they rent movies for $1 a day from a kiosk at the supermarket. Next they saved the $10 to download George Strait's new "Troubadour" album on iTunes. Instead, they bought two tracks for 99 cents each. And they didn't rush out to spend $17 for the DVD of "Sex and the City." They checked out a free copy from the library.

"We started finding alternatives that we didn't have to spend money on," said the 31-year-old mother of two. "I don't feel that we've lost any quality."

Wednesday News: D Cinema Deal ... RealNetworks Lawsuit ... New Video Annotation Site ... Netflix Adds Starz Movies

- More digital projection systems will show up in multi-plexes, now that several major studios have signed up to help finance them, according to Variety. (Good thing that Digital Cinema Implementation Partners, the group representing the three biggest theater chains, lined up $1 billion in financing for the gear earlier this year, before the credit markets locked up.) The deal will convert about 15,000 screens over the next three to four years, according to the Wall Street Journal.

- You shouldn't be able to buy a $30 software program from RealNetworks to help you rip DVDs, because that's bad. If you want a movie in digital form, you should instead wait until the studio decides to sell that movie in digital form. That's the upshot of a lawsuit filed yesterday against RealNetworks.

- ved.io is a cool new site with a terrible name that allows you to annotate your videos with text, links, and photos. Check out some of the annotations they've done of the first Presidential debate -- really neat stuff.

- Netflix will soon add about 2500 movies from Starz Entertainment to its Internet streaming service, reports the Journal. This is a big deal, giving Netflix lots of recent titles. Nick Wingfield writes:

Under the deal, which is expected to be announced Wednesday, Starz will grant Netflix rights to show movies on its Internet service from the Hollywood studios owned by two big entertainment companies, Disney and Sony Corp. That includes everything from "Ratatouille" to "Superbad" to "No Country for Old Men." The first 1,000 of those videos are already available on the Netflix Web site with more titles appearing in the coming weeks.

Starz holds online viewing rights to movies from those studios that are shown as part of a subscription service, in which a consumer pays a monthly fee to watch as many videos as they wish. The movies will be available online free to people who are members of one of Netflix's unlimited subscription plans, which start at $8.99 a month.