An interesting battle is going on in the movie industry. The Motion Picture Association of America (MPAA) has recently filed a petition to have the FCC waive its restriction on using selectable output control (SOC). SOC is used to restrict which output is used to transmit content out of a device.
The MPAA is advocating for the FCC to remove its waiver of these restrictions in order for theatrical movie releases to be distributed in high-definition to homes prior to their availability on DVD, which is generally 120 days after theatrical release. By removing the waiver, the MPAA can be assured that digital outputs utilizing copy protection would be used to transfer this content to displays, ensuring that illegal copies are not created and distributed before official DVDs hit the market. The MPAA is saying that removing this waiver would only affect content that is distributed prior to DVD release. After that, there would be no restrictions, similar to what happens now. Thus, there is little change in what the customer experiences, except that now consumers get to watch new releases at home much earlier than before.
The opponents to this petition, mainly movie theaters who view this as a threat to their business, say that neighborhood cinemas will inevitably be shutdown and people who enjoy going to the movies will have lost out.
If you ask me, I am all for watching new movies at home sooner than I can now. My wife and I just went to see The Dark Knight, and after movie tickets, popcorn, and soda, it ran us $34. When I watch an HD movie On-Demand through Comcast, it costs me $5. It is great to see content distributors like MPAA developing new business initiatives that ultimately benefit the consumer. As for dealing with opponents, a few things could be done to make sure this becomes a win-win for everyone:
1. Make home viewing of HD movies available 60 days after theatrical release. This would keep movie theaters relevant as the die-hard movie buffs will still want to see the latest blockbusters on the first few opening weekends. This 60-day window should protect the majority of audience levels for movie theaters.
2. Set premium pricing for at-home viewing for the 60-120 day period between the time of home viewing release and the time of release on DVD. Thus, charging something like $12-13 (similar to pricing in hotels) would allow a family to be able to watch a hit movie for much cheaper than going to a theater. It would also allow the content owners to earn more revenue than they currently receive with standard On-Demand movies, which will help to offset their declining DVD businesses.
I also like how the MPAA is trying to entice the FCC to accept its petition by claiming that this new type of service will help to entice people to transition to digital TV by the February 2009 transition date. It's all about positioning...
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