Tuesday, January 12, 2010

The Law of Unintended Consequences

This week's Economist [subscription req'd] points to a watershed in Hollywood's efforts to monetize the online distribution of their content -- namely, the emergence of a common electronic format:
This week the Digital Entertainment Content Ecosystem (DECE), a consortium that includes five of the six big studios as well as technology firms and retailers, agreed a format for digital films and named a single outfit to keep track of purchases. Consumers will be able to buy a film once and then play it on different gadgets. As it will be held on a remote server, they will not have to transfer it from device to device.
The first hurdle to this new standard are the two elephantine outliers: the first, Disney, has its own proprietary system and is trying to do the same thing on a competing platform -- thus undermining the one-stop-shop model.

The other kid refusing to enter the sandbox is Apple, since "it already offers film and television downloads through its iTunes store." Apple's interest runs completely counter to DECE's: it wants to wed content and device as closely as possible: Steve Jobs doesn't care what you watch, just that you watch it on an Apple product. Hollywood producers, though, don't care about content (a fact to which The Game Plan would attest) or platform -- just that you pay for it.

A far more interesting question is whether independent movie producers will be allowed to distribute their work using the same electronic standard. Until now, the whole point of the studio racket was that it was a closed, albeit enormous, distribution system. To continue Hoovering up our dollars, they need to make the consumption of movies over the internet a transaction with as little fuss (and as little electronic know-how) as possible.

That would seem to be a huge leg-up for independent producers who lack access to the brick-and-mortar networks the studio monoliths have spent almost a century building. Should this new standard take hold, it's a fair question whether the existing balance of influence endures in the ether...

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