We managed to get a little more detail on the Blockbuster – Sonic Solutions partnership over films stream and downloads by talking to the EVP of Strategy at Sonic, Mark Ely this week, and it could set up a genuine significant challenge for at least US online film delivery.
Our three big issues from the announcement were whether or not Movielink and CinemaNow could move into fresher business models than simple rentals, just how did the technology work and just how would this be presented to the public in brand terms?
To some extent the CinemaNow business model had already changed when Sonic Solutions first did a deal with it to supply the technology to offer video sell through rather than just rental. But while that sell through demanded a change in the film rights, which the studios gave to CinemaNow, it was really just a service to burn a DVD which would play in any DVD player. That’s quite a difficult task, as it requires special media which contain the CSS encryption system and keys, and a new special type of DVD writer installed in PCs, which are only beginning to ship in volume now.
Our instincts and everyone we’ve talked to says that consumers have better things to do than sit about waiting for a DVD to burn, only to find (perhaps not with Sonic software, but with most that we’ve tried) that after hours of waiting, the damn thing doesn’t work properly. Our take was that it’s not enough of a business model improvement to work on its own. And Ely almost agreed with us, saying that the real take up would be when people move from the PC to the connected home. Where the uptake rate could take it from 100,000s to millions.
The announcement, made last week, promised that the two video libraries, CinemaNow, which last year was purchased by Sonic from its original studio and VC owners, and Movielink, now running under the brand Blockbuster Entertainment Service, would be merged and that the content would be available on PCs, portable media players, Blu-ray Disc players, personal video recorders (PVRs), set-top boxes, mobile phones and web-connected television sets and we figured that was quite tough to achieve.
‘We take the brute force approach,’ said Ely, ‘We separate user rights from the formats and devices and create 14 to 18 different formats of the asset. In some cases it is possible to transcode on the home network from one format and resolution, under one DRM, into another. In other cases that’s not possible and we download or stream another copy of the file onto a new, pre-registered device.’
This is similar to the approach taken to interoperable DRM that Intertrust has proclaimed these past three years with its Nemo (Networked Environment for Media Orchestration) which in turn has been taken up by parent company Sony in its DECE archeitecture.
DECE or Digital Entertainment Content Ecosystem allows a device to have an identity under any DRMs or delivery mechanisms so that it would be able to play the content sold by ‘any’ entertainment service. This was presented in September last year in a paper from Sony Pictures, and it looks like once again, Sonic is one of the first companies to build such a beast in the same way that it was one of the first to build the burning capability in, using CSS.
That burning capability all came out of a decision by the DVD Copy Control Association agreeing on a process for DVD burning using CSS and Sonic was the first to get it working in its Qflix product back in 2007.
We wrote up DECE in September when Sony said that it would help offer film services especially, which could be protected on any device but also allow copying to other devices and burning into DVDs without removing the DRM, so not risking the content becoming pirated by the average user. The architecture also calls for the content to live in a ‘rights locker’ a a remote server so that it can be retrieved from there at any point in the future by a DECE registered device.
And this is exactly what Sonic has built. ‘The idea has come from the DECE work of Sony, and it is a combination of our own code, but it works alongside DRM systems from Microsoft, Widevine and OMA (Open Mobile Alliance). It’s about a service that we can deploy today. It’s not dogmatic. There are various consortia in this market that we have to work alongside, and we have to do a lot of heavy lifting on our system at the back end.’
In simple terms a user registers his or her devices with a Sonic server and it allows that any rights granted to any device can be offered to all of the devices tied to that customer. If there is no way to copy the content from one device to another, then when a new device requests a copy, it simply picks the most appropriate format, resolution, codec and DRM, and sends a new copy.
‘Yes if you have no copies on any device, but you have bought rights to that content, our service will send you another copy,’ confirmed Ely, so yes it has the ‘rights locker’ approach that DECE described.
Effectively this has all replaced the servers which Blockbuster would have inherited from Movielink. The two libraries are notionally separate, since they are each still acquiring their own new content, but this sounds like little more than a tag in a single field saying if they are Movielink or CinemaNow licensed or both. So the back end of the new Blockbuster service is the same back end as the CinemaNow service, and it presents to the customer with the Blockbuster brand, powered by CinemaNow.
‘The services are all ‘a la carte’ services. There is still video rental, and right now that is still tied to the device it downloads to. We are working with the studios on allowing even a rental, which has a 24 hour playing window, to be moved to other devices. But where content is purchased we would expect it to be downloaded 2 or 3 times in the course of that ownership to multiple devices.’ By downloaded Ely also includes streamed directly to these devices, making a big distinction between the progressive downloads which both Movielink and CinemaNow were associated with, which were always to PCs, and adaptive streaming models which the new services also offer. Does this mean that it will work with content from Silverlight using the type of streaming that Move Networks offers to Microsoft? ‘We offer our own adaptive streaming at present, but we would not rule out working with other formats,’ says Ely, in a ‘watch this space’ kind of voice.
The all important question is whether or not I can watch these films on my iPhone or iPod Touch? ‘We are working to bring a strand to these Apple devices, but right now we can only bring it to these devices streamed over the internet, while they are connected, not unconnected.’
So will Sonic try to put its own DRM on a iPhone or work with Apple’s Fairplay DRM which Apple is famous for not letting anyone into? Ely is simply not being drawn on that front.
But suddenly these services are technically a match from Amazon, Netflix and iTunes because of the way in which a wide range of devices can be used and especially on the rights locker front. And that could definitely breathe relevance back into Blockbuster. Sonic has always had technological relevance, but now it also has content, so expect it to suddenly become empowered and cut other similar deals. After all it doesn’t want to rest its future on just one, currently tarnished, brand, a brand which so far only operates in the US.
‘Blockbuster will be selling this from its stores with new connected devices. It has announced one from 2Wire and another from TV maker Vizio. We have a deal with LG to put CinemaNow on its Blu-ray player.’ Could Sony become a target for this technology, given that the idea started with their film division? ‘We hope to work with Sony devices in the future,’ was all that Ely would say. Sonic is a fierce rival in some markets with Sony, so we don’t see Sony lying down and asking Sonic to run a Sony branded service, but its own current vision allows for opening up devices, and Sony Bravia TV sets, with the Sony Bravia Internet Video Link, as well as PS3 gaming consoles and the PlayStation Portable are all valid targets for the CinemaNow service.
In the meantime, in an unrelated announcement, Blockbuster rival Netflix, the company that brought us online DVD rental (another business which Blockbuster currently has copied), is singing the praises of its own online service.
Netflix says that it expects to add 900,000 customers during its first quarter, ending with over 10 million subscribers, a move which will drive it to record revenues and earnings in the midst of a savage recession. This prediction comes because the company added 718,000 new subscribers during the past three months, with management there suggesting this is due to its online video service. “It’s very clear that streaming is energizing our growth,” Netflix Chief Executive Reed Hastings said on the company’s earnings call Monday.
Well if that’s so, Netflix had better hurry up and begin to offer that service separately, because if it’s the online service that people want, and to get it they have to pay for online DVD rental, that makes them great candidates for going elsewhere where they only pay for online. Currently Netflix does not break out details of the number of downloads that it supports. Netflix also has a partnership with LG for online connection to its Blu-ray disk players.