Studios thinking inside the box

Homevideo turns to downloads via consoles

Studios are fretting about their golden goose, otherwise known as homevideo. Sales are dropping. Blu-ray has yet to take off. And no one seems to know for sure what will be the next great way people watch movies.

Sony, however, thinks it may have the missing link, from an unexpected source: PlayStation 3.

While initial sales of the PS3 have been slow, the electronics giant is hoping to find some traction in its use not solely as a gaming console, but as a source of movie downloads.

The numbers certainly show Sony is onto something.

As of February, more than 380 million pieces of digital content have been downloaded through its PlayStation Network, adding $180 million to Sony’s coffers since it began offering movies and TV shows last summer.

The most popular titles aren’t too surprising, given PlayStation’s demo of 18- to 35-year-old males. They include “The Dark Knight,” “Iron Man,” “Hancock,” and laffers like “Pineapple Express.”

“It’s a hit-driven business,” says Susan Panico, senior director of Sony’s PlayStation Network, which has more than 20 million subscribers. “It’s definitely driven by the content.”

More recently, Lionsgate’s comedy “My Best Friend’s Girl” and an HD version of DreamWorks’ “Eagle Eye” ranked high among their available titles.

Sony, and the rival Xbox 360 from Microsoft, may have achieved something of a breakthrough as studios try to figure out the digital age. Over the past decade, studios have invested in promising new Internet download ventures, with miniscule results, hobbled by the fact that it’s just not that enticing to watch a full-length feature on a computer.

But videogame console makers have been at the forefront of figuring out a way for people to easily watch downloaded movies directly through their TVs in a way that’s similar to watching pay-per-view movies through a cable service.

Essentially, the PS3 has been transformed into a set-top box that digitally downloads pics to its large built-in hard drive — a move that expands the usability of the device and makes it more mainstream, not just intended for gamers.

At the same time, its PlayStation Portable handheld device is being pushed as a way to watch movies on the go, with pics able to be loaded onto a PSP in mere minutes.

“Our goal is to deliver convenience through a single device for our consumer and make sure they’re having fun while doing it,” Panico says.

But the intention is also to turn the PS3 into “an anchor for home entertainment” in the living room. To do that, Sony began rolling out movies to buy and rent, as well as TV shows and other videos, on the PlayStation Network last summer.

Some 1,400 movies and 4,400 TV episodes from virtually all of the studios are offered.

Among pics, higher-profile titles, as well as unrated versions have proved more popular. And because of Sony’s younger userbase, it’s tried to offer more superhero fare, actioners and comedies — pics that feature Batman and Iron Man, but also laffers like “Pineapple Express,” “Step Brothers” and “Tropic Thunder.”

Of the movies, 65% of the pics are purchased, while 35% are rented, Sony said.

But the electronics giant knows that in order to rally its numbers, it needs to prove attractive to families, as well, and offer more G-rated fare. It’s been able to do that with toons like “Wall-E,” which was one of its top downloads.

TV shows and short-form entertainment have also appealed to subs, with “Family Guy,” “Afro Samurai” and Japanese anime dominating the top 10 lists. Last month, the “Watchmen Motion Comic” and the seventh season of Fox’s “24’s” topped lists.

Original series, created specifically for the PS3, such as the anime offering “Xam’d” and “Pulse,” a weekly series about what’s happening on PlayStation, have also generated auds.

Getting the studios on board meant ensuring that their pics wouldn’t be pirated, that they’d be promoted, and that the download experience was an easy one.

“For some it’s a newer frontier than for others,” Panico says.

Part of that new frontier has meant studios having to reconsider release windows and when to offer up pics for download.

“There’s a generation that’s growing up totally digitally and used to getting content when they want it and how they want it,” Panico says. “One of the things we look at is how to ensure total convergence across all of our devices. When you’re thinking that way, people have to think differently about release windows.”

Sony is hardly breaking new ground with its downloading service.

Microsoft’s Xbox 360 has long offered a similar movie download option for the 17 million paying subscribers of its Xbox Live service. It also offers an additional digital rental option via Netflix, that supplies 12,000 additional movies and TV shows. More than 1 million Xbox Live subs are using Netflix and have watched over 1.5 billion minutes of video over the past three months, according to the companies, repping 10% of Netflix’s customers.

With an increasing number of consumers downloading pics via Apple’s iTunes service and gravitating toward digital copies of DVDs to load onto iPods and computers, Sony could be onto something.

It launched an extensive promotional campaign over the holidays to try to increase numbers.

But in order to up those numbers grow even more, Sony will have to find a way to make its console more attractive to consumers’ wallets.

So far, it’s sold more than 20 million PS3s. Comparably, there are more than 28 million Xbox 360s in the market.

At around $400 a unit, the console is still considered too expensive for some, and that’s having an effect on sales of high-profile titles.

Exclusive games like “Little Big Planet,” “Resistance 2” and “Metal Gear Solid 4: Guns of the Patriots” have disappointed.

But given Sony’s stature in the gaming space, it’s intent on making sure the PS3 is no loser and will do everything it can to put more consoles into consumers’ homes. And, perhaps, that will mean Hollywood won’t lose out, either.

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