New internet and mobile video services will pose an increasing challenge to the traditional film and TV industry as 'download-to-own' (DTO) increases in popularity, argues the latest report from media research company Screen Digest and consultancy Rightscom.
According to the survey, 'Digital Rights Management and New Entertainment Business Models', the way forward lies in developing effective digital DTO services that mimic the DVD business model that has to date generated billions of dollars of profit for movie studios and broadcasters.
Sometimes called 'electronic sell-through' or 'digital retail', the DTO business model allows companies to charge a higher price (and hence extract a better profit margin) than other forms of video-on-demand. Pioneering examples of such internet services include: Movielink, a joint venture founded by a group of the largest Hollywood studios; the new UK venture recently announced by Universal Studios and new entrant LoveFilm; and the German In2Movies offering being established by Warner Bros.
According to the report, the deployment of flexible and robust digital rights management (DRM) systems will be critical to the success of these new ventures.
"This year will be the first year that internet video delivery really starts to take off. Powered by DRM technologies, the telcos and big internet players, together with hungry new internet start-ups, will challenge the traditional gatekeepers," commented report joint author, Chris Barlas of specialist DRM consultancy Rightscom. "The fact that DRM was discussed at the recent World Economic Forum in Davos underlines its critical importance."
"Digital download-to-own is the new holy grail of the film and TV industry as it fights to respond to the twin challenges of piracy and new market entrants" added Ben Keen, chief analyst of Screen Digest. "However, the consumer must be at the centre of all new strategies and DRM systems that are not sufficiently flexible are doomed to failure."
The report also examines the lessons learnt from the music industry's digital experience and analyses the way in which DRM systems might allow movie release windows to be radically changed in future.