Video downloads aren't like peas in an iPod yet

Published: Sunday, January 1, 2006 at 6:01 a.m.
Last Modified: Saturday, December 31, 2005 at 10:49 p.m.
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Apple has added video shelves to its iTunes Music Store.

The New York Times
ABC's "Desperate Housewives" can be downloaded onto most computers, but you'll need an iPod to watch it elsewhere. But let's say you want an episode of "Survivor" instead. ITunes doesn't have it, but if you're a Comcast subscriber, you'll soon be able to order it for 99 cents through your cable box. "Law and Order: SVU"? That 99-cent download is available only to DirecTV subscribers who have the company's latest video recorder.
Video downloading is the hottest idea in TV right now, and choices are proliferating. In the last month or so, broadcasters have announced major initiatives to sell shows a la carte.
But there's a catch. To watch a favorite show, unburdened by network programming schedules, today's viewer has to know which technology to use and own the latest equipment. And another network's show requires a completely different setup.
It will take at least a couple of years to get from this early stage to the era of the digital jukebox, when most movies and TV shows will be downloadable from a single place, tech industry watchers say.
Copyright holders are starting out timidly, unsure whether offering programs for download will siphon money away from their broadcasts and DVD sales.
Technology makers are trying to convince Hollywood that it can protect its properties from rampant piracy. Hollywood is worried about file-sharing technology such as BitTorrent, a software tool that allows users to download large files quickly.
And no one is sure what consumers want. What restrictions will they accept on the number of devices they can use to watch their videos? And will they prefer to order shows and movies through a TV set-top box, a Web site or a software program?
"There's a lot of confusion," said Tim Bajarin, president of research firm Creative Strategies Inc. "You have multiple channels vying to try to be the best video/music distribution vehicle, period. We're in a highly competitive phase."
It's bound to get even more competitive as more companies offer ways to get video over the Internet. Microsoft's Xbox 360 gaming console is capable of downloading music and movies, and the software giant is already offering high-definition music videos and movie trailers to play through the device. TV shows wouldn't be out of the question.
Search engine companies such as Google and Yahoo, meanwhile, are developing ways to scour the Web for video clips. Yahoo has started producing some video content, such as war-zone coverage with correspondent Kevin Sites.
Telecommunications companies are introducing more ways to get and store TV shows and movies. Most satellite and cable operators offer some form of digital recording device. And the cable companies have also been rolling out video-on-demand services, allowing subscribers to access some shows at their convenience.
Compare the current video-downloading scene with the music industry's 2003 foray into legal music downloads. All five major record labels agreed to sell their music on one Web-based software platform iTunes for one price: 99 cents per song.
The songs were embedded with copyright protection software, and iTunes seemed to work swimmingly, selling 70 million songs in its first year. So why not try the same thing with video?
For one thing, movie studios and TV broadcasters don't cotton to the idea of having a middleman set their prices and their copyright protection schemes. (Apple may already be giving up some control in the music business, with record labels pressuring the company to let them price some songs higher than 99 cents.)
"While Apple has done the best job to date, not everybody is ready to just throw in with Apple," Bajarin said. "Nor are they willing to do so with Microsoft and their store or Real and their store. In some cases, they'd like to do without the middleman and sell direct to customers."
Video content owners consider their first video-download offerings to be an experiment, said Wei Wei Jeang, a partner at Haynes and Boone LLP who specializes in intellectual property. They want to see how downloads affect their other video sales, she said.
"They create a lot of revenue from the packaged season's worth of shows in one DVD. That's been very popular with consumers," she said. "They're afraid if they enable downloads as a single show at a time, they'll lose that revenue."
The problem is that the companies that own movies and TV shows may be limiting the potential of the video download market by taking things so slowly. If consumers don't have a central place to buy whatever show or movie they prefer, they'll probably avoid the market altogether, said Lawrence Lessig, a Stanford University law professor and leading advocate of copyright law reform.
"You only begin to have takeoff when you have total interoperability," he said. Even iTunes has kept the music download market from being as big as it could be, he said, since it allows songs to be transferred to only one portable player, the iPod.
An announcement in November by TiVo Inc., maker of the pioneering digital video recorder, was a small step toward making it easier to transfer TV shows and movies to other devices.
TiVo said it would begin offering a service that converts its recorded shows into a format that iPods and Sony PSPs can read. TiVos already can convert shows into a different format designed by Microsoft, allowing them to be viewed on computer screens and some portable devices.
The TiVo system requires a little patience, and it basically simplifies a process that avid digital video users have already figured out: converting one type of computer file to another. Users have to transfer their recorded show from the TiVo to a computer, and the transfer takes about as long as the show itself. From the computer, the shows can then be uploaded to an iPod, a PSP or another portable device.
Still, it's a beginning, and TiVo does offer a feature that automates the process so recorded shows are transferred to the computer overnight. TiVo plans to introduce the feature to owners of its Series2 recorders early next year.
If content owners find that consumers are attracted to video downloads in these early experiments, they'll be persuaded to put together a more uniform approach to the market, said Rob Enderle, a technology analyst in California.
"Any revenue they get for this stuff is revenue they wouldn't have received otherwise," he said. "That can make it happen pretty quick."

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