Movie rethink has yet to reach SA

04 March 2012 - 02:15 By GREG GORDON

The movie industry, hard hit by piracy and shifting format trends, is pitching a new way for people to buy and watch Hollywood blockbusters online.

It's called Ultra Violet, a cloud-based service that lets people "own" libraries of films on remote servers and access them on demand from whatever device they want to watch them on.

Movie piracy is so entrenched in popular culture that usually law-abiding citizens think nothing of swapping hard drives full of illegally copied movies and TV series with friends, relatives and colleagues.

Video-ripping software makes it simple for people to copy their legitimately bought movies onto a hard drive, either for personal viewing on computers, tablets or smartphones or - and this is where the studios face a real threat - to distribute the content to whomever they see fit.

Ultra Violet is supported by the Digital Entertainment Content Ecosystem, a consortium of movie studios, hardware manufacturers, and retailers. It's in talks with giant US retailer Walmart to offer an in-store service that allows consumers to upgrade old DVDs and convert them into digital copies for a fee. It would add significant momentum to Ultra Violet which only has about 750000 users in the US and UK.

Companies like Apple, with its iTunes online store, have agreements with the big studios to distribute content via their online facilities - for a percentage. But that service doesn't extend to territories like South Africa and anyway, the reasoning goes, why shouldn't the studios handle their own online distribution?

Internet and movie entrepreneur, Ronnie Apteker, has a unique perspective.

"There's a big rethink afoot in the movie distribution business," he says. "It's in a state of flux as studios find their feet in the online world.

"In the US, for example, there are fewer and fewer video stores - online services like Netflix, which offer movies on demand, have rendered them redundant.

"Netflix started off sending movies by post. They took their database and turned users on to an online streaming model - a classic case of giving the market what it wants."

Apteker says the movie business is wising up to online opportunities.

"Services like YouTube are now the first destination for consumers wanting to watch movie trailers, for example," he says.

The movie distribution business appears locked in a time warp. It tried to get consumers to bend to its will when it introduced regional coding to DVDs. It was relatively easy for consumers to get unlock codes for their players. Now, if people can't get the titles they want when they want through existing pay channels, they'll look elsewhere.

Online peer-to-peer file- sharing services and hard drive swapping are two popular options.

Martin Cuff, executive director of the Association of Film Commissioners International, says consumers want an on-demand model.

"The studios have been slow to understand this. People want to watch high-quality films at a time and place convenient to them - they are prepared to pay for this using services like Netflix and Hulu Plus. More than 60% of studio revenue now comes from the sort of online firms they claimed would shut them down," he says.

However, even if straight-from-the-studio online movie distribution is a success in markets like the US and Europe, South Africans face being left out of that net. The local iTunes store doesn't offer South African movie downloads, and nor do Netflix or Ultra Violet. DStv does provide a limited number of on-demand movies to subscribers via satellite.

Historically, internet bandwidth and cost have been touted as limiting factors in providing South African consumers with online services, but that argument's starting to wear a little thin.

If legitimate suppliers won't provide consumers with the goods and services they are prepared to pay for, they'll take them where they can find them.