OPINION: VOD in demand

Studio efforts to craft a limited, high-def video-on-demand window ahead of movies’ DVD and Blu-ray release hit a snag in Washington last week when the Federal Communications Commission extended the public-comment period on the Motion Picture Assn. of America’s petition to block digital video recorder recordings of the early showings.

The extension, requested by the National Assn. of Theatre Owners to allow more time to study the issue, scuttled studio hopes for an expedited ruling by the FCC and lowered the odds that a waiver to the rules restricting the use of selectable output controls on set-top boxes will be forthcoming this year.

The studios say the waiver is necessary to block unencrypted analog recordings of high-value, early-release content from being uploaded to the Internet without copy protection.

Worse for the studios, the FCC indicated in granting the extension that it wanted to develop a full record in the case.

“Given the importance of the issues in this proceeding and in the interest of encouraging public dialog regarding these issues … we believe that grant of NATO’s request is necessary to facilitate the development of a full record,” the agency said in a public notice on the extension.

That’s agency-speak for, “we realize any decision we make will be challenged in court, so we want to make sure we do it by the book.”

Court challenges could drag on for months, if not longer.

Yet although the delay is a set-back for the MPAA, I wouldn’t expect the studios to give up on the idea.

It’s clear from the MPAA’s full-court press to get the waiver through the FCC that at least some of its member studios are very keen to get on with the new VOD window.

The FCC record to date shows at least six ex parte communications (i.e. in-person lobbying meetings) between agency officials and representatives of the MPAA, including visits by MPAA CEO Dan Glickman to three of the five commissioners. The other two will almost certainly be hearing a knock on the door soon.

Glickman even brought along Eddie Fritts, former head of the National Assn. of Broadcasters and now a lobbyist, who was directly involved in crafting the rules the MPAA wants to change and knows them inside and out.

Clearly, the studios have put the waiver near the top of the MPAA’s priority list, presumably because some or all of them are determined to begin offering early VOD availabilities ASAP.

Another sign of studio interest in an early VOD window came this week, when Sony chairman/CEO Howard Stringer announced plans to make Sony Pictures’ summer theatrical release Hancock available for streaming ahead of its DVD release later this year to owners of Internet-connected Sony Bravia HDTV sets.

Since access to the early availability of Hancock by owners of Internet-connected Bravia TVs does not require a cable or satellite subscription, Sony doesn’t need a waiver to go ahead with its plans. The FCC rules do not apply to Internet-delivered video.

Moreover, Bravia sets have no video outputs to turn off, so the question is moot. No waiver is required for Sony to go ahead with its plans.

It’s also unlikely that Sony would extend the offer beyond the relatively small universe of network-enabled Bravia owners at the risk of undercutting Blu-ray sales.

But clearly, DVD’s position atop the post-theatrical food chain is no longer sacrosanct.

One way or another, movies are going to start appearing on VOD ahead of their release on DVD or Blu-ray.

Click here to read more analysis from Paul Sweeting.