This Internet Thing is Starting to Seem Important Somehow

There's been a lot of interesting news this week, so I wanted to share a few links and reactions.

- YouTube is apparently working on a deal with the William Morris Agency to bring more professionally-produced content to the site. I do think celebs will attract a big audience on the site if they can figure out how to make short, funny, sexy stuff on a really tight budget. That tight budget thing is gonna be the issue...(And what about William Morris' 10% cut of all this action?)

- Netflix is successfully creating the perception that they will win the race to deliver movies over the Net to televisions. CEO Reed Hastings said this week that "streaming is energizing our growth." Netflix's fourth quarter results this week beat Wall Street's estimates, with revenues of $359 million.

- Paramount, Lionsgate, and MGM hope to launch a new subscription TV channel for movies, to compete with HBO, Starz, and Showtime. No cable or satellite or telco provider has agreed to carry the channel yet, so it will appear first on the Web, this May. It'll be called Epix. Ummm, didn't Starz already try its own Web-based movie service...called Vongo? That didn't work so well. Of course, Epix might have some radically innovative new take on how to build and Internet movie service...

Let's hope.

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.

RIP Vongo and ClickStar: Two Pioneers of Digital Movie Delivery

I wrote a piece for Variety today that breaks the news that two pioneering Internet download services, Vongo and ClickStar, have called it quits.

To my knowledge, these are the first two major Internet download services to wave the white flag.

ClickStar had attracted far more publicity than Vongo, given the involvement of celebs like Morgan Freeman and Danny DeVito. (The pic is from the launch of ClickStar at CES 2006. To my knowledge, Tom Hanks was never involved with the site.)

Both sites were worthy experiments... Vongo was the only major site to try to offer consumers all-you-can-eat movies for a monthly price (a pretty reasonable $9.99.) Vongo's parent, Starz Entertainment, is now providing the same service through Verizon for $5.99 a month -- such a deal!

And ClickStar tried to put movies online while they were still in theaters. That never happened, but they did release two movies on the Internet only two weeks after their theatrical runs began. Theater owners hated it. (I write about this experiment in Chapter 10 of my new book "Inventing the Movies." You can read that chapter here as a PDF.)

About the demise of ClickStar, John Fithian, head of the National Association of Theater Owners, told me yesterday:

"We don’t have an opinion on when people do or don’t stay in business. All I can maintain is our traditional belief that the movie business as a whole and movie patrons as a whole benefit from a theatrical release window, where movies come to cinemas for a reasonable amount of time before they go to the home in any format –- be it DVD or download."

That quote didn't fit, unfortunately, into the Variety story.

And I reached producer Holly Wiersma after my deadline last night. She produced "Lonely Hearts," a 2006 movie that starred John Travolta, James Gandolfini, Salma Hayek, and Laura Dern. It was one of the higher-profile movies released excusively on ClickStar.

She told me, "It's a shame. I think ClickStar would've done better if it launched today," since independent producers would be more willing to work with it at a time when distribs like Warner Independent and Picturehouse have vanished. "We need more outlets, not fewer," she said.

In a letter to content providers, ClickStar tried to declare victory.

"Over the last twelve months, our vision for broadband distribution has been confirmed by the marketplace," chief technical officer Sam Edge wrote, citing download sites launched by Amazon, Blockbuster, and Wal-Mart. "With the entry of these well-funded players into our space...it has become increasingly clear that ClickStar needs to align itself with a key partner to operate within the larger ecosystem and serve our core audience...We have decided to partner or sell ClickStar..."

That letter went out on April 2nd. The Corum Group is handling the sale... but nothing has been announced yet.

What are the Odds of Apple Opening Up Its FairPlay DRM?

Chatting with an exec at Vongo this morning, I needled him a bit about the service's incompatibility with Macs -- you can't even see what movies are in their library, or learn about how the service works if you're using a Macintosh.

He parried by saying that there is already a version of the Vongo client that will run on Mac OSX. The only thing they're waiting for is for Apple to decide to license their FairPlay DRM to video services other than Apple's own iTunes.

Wouldn't that be nice? Apple only offers movies and TV shows for purchase; other services let you rent movies, or even pay a monthly fee (Vongo's is $9.99) for unlimited access to movies and other video content.

I asked the Vongo exec whether they had any sense of what the timeframe might be for Apple opening up FairPlay. "There's no sign that's going to happen anytime soon," he said.

What do you think? What are the odds that Apple ever opens up FairPlay voluntarily (without a court order)?

Friday news: 3-D, Starz v. Disney, Red Camera Gets Feature Gig, Nameless New Video Site

- In 3-D news: James Cameron talks to BusinessWeek about motion capture and 3-D filmmaking. And 3ality, one of the pioneering production firms in digital 3-D, is building a new 20,000 sq. ft. facility in Burbank, according to the Hollywood Reporter.

- Starz Entertainment is suing Disney. Starz thinks that its deal with Disney prevents the Mouse from selling its movies through services like iTunes, and is asking for those profits as damages in its suit.

- Mike Curtis reports that the Red Digital Cinema camera will be used on its first studio feature starting next month. The Universal production stars Angelina Jolie and Morgan Freeman. But it seems that the brand-new Red camera will be used primarily for visual effects shots, not principal photography.

- Variety has some juicy business details on yesterday's announcement of a new, as-yet-unnamed video site that NBC and News Corp. will create together. And Mark Cuban tells you why he thinks the site is such a great idea. His analysis is really sharp, especially this point:

This new venture, if it can launch in the next few months, will hit the ground with more and better content, and more monetization options than Google. It's a unique opportunity to set the rules of how video advertising is sold. Something Google thought they had wrapped up when they bought Youtube.