The early release window, which offers Hollywood content for home consumption while it is still showing at theaters, has been debated for many years – in fact, I wrote about an enabling FCC ruling about a year ago. But now the debate about its success is raging more than ever.
Adding fuel to the fire is a current price tag of US $30. At this price point, the discussions revolve around the comparison of an expensive VOD movie to movie theater tickets that cost, on average, less than $8. Cinema owners and movie directors have voiced their concerns about the shift in content consumption habits. Though after all, it is impossible to reliably predict consumer interest – otherwise every Hollywood title would be a blockbuster.
I think that it will be an interesting offer for, initially, a small percentage of consumers. And while the rate of the adoption is questionable, it’s obvious to me that movie theaters won’t disappear any time soon and that electronic distribution will continue to grow.
The participating studios certainly have conducted their own research and it is evident that they have high enough hopes to shake the traditional models and to support this offer.
But I see the most relevant indicator in recent discussions that I had with operators. They are evaluating this opportunity seriously and investing time and resources in the studios’ requirement that early-window content be digitally watermarked as well as encrypted. This may be because even a small uptake by consumers will translate into a relevant chunk of revenue.
One technically interesting point is that operators often prefer server-side integration of watermarking. The tradeoff is whether the integration is done in the client device or in the video server before delivery. While a client-based approach has the advantage of distributed processing without head-end integration, server-side watermarking integration does not require modification to client devices.
The overall application is the same, yet the head-end component requires a very different technology approach. The manipulation of video pixels is too slow when considering the complex coding of compression schemes like H.264. The server-side manipulation has to be applied in the compressed and possibly encrypted domain, and applied while the content is delivered.
Efficiency is key, because the delivery infrastructure is all about delivering the maximum number of parallel streams. If watermarking introduces overhead to it, it must be small and fast. This is a fundamental difference from previous watermarking schemes that only focused on survivability (robustness). At the same time, with an expected broad deployment across multiple head end infrastructures, ease of integration is crucial to the adoption of digital watermarking.
This development will remain interesting because it’s an experiment on the technical front as well in business models, and I am sure there will be more progress to report in the future.