Downloads downplay hi-def

Broadband film library to grow

New movie download services launched by Amazon, Apple, Microsoft and, most recently, Wal-Mart still play in a separate sandbox from the physical world of HD DVD and Blu-ray.

But as Sony and other hi-def hardware makers stumble into stores with pricy disc players and muddled marketing messages, content owners are giving download and video-on-demand providers the greenlight to capture a mass audience.

Ask studios whether the download hype could hamper their efforts to hawk plastic, and you get practiced lines about the “happy co-existence” of the new products, resulting in “expansion of our overall position.”

Meanwhile, handing out marketing collateral headlined “VOD no threat to BD, still mostly AWOL” at the Consumer Electronics Show, top Blu-ray supporters noted that it will take years for broadband capacity to reach the point at which hi-def movies can be downloaded in less than 10 hours.

Still, the conditions seem ripe for consumers — who are simultaneously being sold on digital and discs — to be confused.

By 2009, all of the pieces could be in place for downloads — as well as VOD offers from cable, satellite and digital TV providers — to surpass the depth of catalog that HD DVD and Blu-ray offer, while approaching (if not matching) the disc formats’ pristine picture quality.

“It might not be all on the same service, but by the end of this year, you’re going to have the ability to download just about every major movie that you could want,” says Forrester Research analyst James McQuivey.

Add the downloadable offerings of Wal-Mart, Amazon.com’s Unbox, Apple’s iTunesand Microsoft’s Xbox Live Video Marketplace, and thousands of films soon will be available via broadband.

Indeed, homevid honchos sign off on digital download rights with little more than a shrug for titles that took years to clear for the legacy DVD format. Studios’ sudden download focus annoys DVD execs and retailers who, stuck with potentially dead-end physical products, stand to be marginalized in the new digital paradigm.

“Why even launch downloadable movies now?” wonders an exec for one DVD services company. “Why not take care of business first and get Blu-ray established?”

Sales of physical boxed sets, after all, hold a much higher profit potential for studios than pay-per-view commodities.

McQuivey opines that content owners are moving so fast into the digital distribution realm “not because they see it as the future. They’re doing downloads because they fear that if they don’t, someone else is going to pirate it out from underneath them.”

We’re not just talking about copying movies for the plane ride. New download tech from PC makers is out to make fast friends with America’s living rooms.

Apple soon will ship a sleek box called AppleTV, which allows viewers to wirelessly beam videos from their PC to their TV screen.

Microsoft’s Xbox 360 game console is morphing into a digital TV receiver and recorder, offering standard- and hi-def TV shows and films on demand from CBS, Lionsgate, Paramount, Warner Bros. and others. You can add an HD DVD drive to the console for just $199, but even Bill Gates admits discs will take a backseat to online distribution as the Xbox 360 matures.

When it comes to marketing, packaged media pushers do have an impressive picture to show off.

“People who see a demonstration that’s set up correctly are blown away by HD DVD and have got to have it,” says Universal homevid topper Craig Kornblau.

Alarmingly, though, the concept of “hi-def” isn’t clicking with many consumers — in fact, some have brought home new flat screens without even understanding their true capabilities.

“People aren’t sure what the advantage is,” McQuivey notes. “They don’t have digital cable in some cases, so when they plug it in, the picture looks all blocky and pixelated.”

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