We interviewed Curt Marvis, a key player in IP-based video delivery and CEO of CinemaNow.
CinemaNow have the distribution rights to the largest library of on-demand feature films available on the internet. CinemaNow’s distribution model is one of the most flexible in the industry: films are available with pay-per-view, download or subscription licenses.
The company’s library comprises content from more than 150 licensors, including 20th Century Fox, Disney, MGM, Miramax, Warner Brothers and Lions Gate Entertainment.
CinemaNow have not restricted themselves to films, however – their catalogue includes music concerts, shorts and television programmes.
CinemaNow’s technology platform is essential to their business, and so they have developed their own proprietary content distribution and DRM system: PatchBay. They’ve also turned PatchBay into a product, and has licensed the platform to other content distributors. PatchBay allows distributors to manage, track and syndicate content whilst enforcing DRM solutions and territorial restrictions. CinemaNow’s entire business is built around the Windows Media 9 platform, which has simplified their business model somewhat, whilst at the same time allowing them to take advantage of the sophisticated features built into Microsoft’s platform.
Curt Marvis has been CEO of CinemaNow since the company was created in July 1999, arriving there from 7th Level. He was also a founder of Powerhouse Entertainment, and in the 80s and early 90s was CEO of The Company, the Los Angeles production organisation.
Digital delivery of video has been slower to arrive than many industry players predicted in the mid-90s, but with the adoption of broadband and improvements to codecs and DRM systems, it looks like mainstream is around the corner. There are still many hurdles – broadband isn’t quite broadband enough, consumer rights over moving content to other devices is unclear at best, content can be lacklustre and customers are confused by the many competing codecs, DRM schemes and formats in the market.
We spoke to Curt about CinemaNow and his hope for the future of digital content delivery, and the advantages of Windows Media 9.
Some of the visitors to Digital Lifestyles might not know about Cinema Now. Can you give me some background on that for our readers?
CinemaNow has been around for five years. We started the company in mid-1999, which of course was during the dot.com hayday. We started the company then do to the same thing that we continue to do today, which is to offer movies and other video content on demand over IP Networks.
What do you think has kept Blockbuster out of the part of the market in the US for so long?
Blockbuster is actually a small investor in our company and I think Blockbuster feels that when they get into a new marketplace they look for a market which is very, very big which the IP on demand marketplace still is not.
I think their philosophy is that they will enter the marketplace at a moment in time when they feel there is a sufficient amount of revenue.
You have to keep in mind as well that Blockbuster do not own the rights to distribute content in this window yet, so they have to negotiate that through a studio.
They are sort of dabbling with it in the UK, but not in a very high profile way.
Yes, I know Steve Middleton and they have had that trial in Hull. So I’m familiar with that. They are actually doing more in the UK than they are in the US market.
Tell me a little bit about your IBC session. What sort of things are you going to be covering?
We have a sort of technology platform we call PatchBay. PatchBay is the sort of central nervous system of CinemaNow, and it’s a completely Windows based platform.
We deliver our movies exclusively in Windows Media format, but that’s not to say that couldn’t use other codecs or other players, but we chose that as our primary platform when we started the company.
We used the installed base for that choice as well as the specific functionality of the platform, for purposes of what we can do to add additional delivery and content.
Could you tell us a bit more about your Patch Bay product?
Patchbay is a versatile, user-friendly, API and tool for managing all facets of online content distribution. With Patchbay, you can manage six major tasks for successfully distributing content online including: Content Management and Distribution; Content Syndication; Rights Management; User Profiling and Ad Targeting; Pay-Per-View, Subscription and E-Commerce Management; and Comprehensive Reporting.
It’s a tested, real-world application currently being used to manage millions of streams per month over disparate networks. With Patchbay’s scalable infrastructure, CinemaNow maximizes its revenues while protecting and retaining control over its assets, even those syndicated to third-party websites.
Windows Media 9 it has been a terrific platform for delivering and viewing and protecting your content. What excites you most about it?
That is a big question. Is there something that Windows Media excites me?
The Windows Media Platform is directly compatible with the dominant operating systems and you know, EU concerns and other concerns notwithstanding we felt that having a player that was most used with the operating system it was running on was best. We also frankly think that beyond that specific issue the Windows Media Platform and Windows Media Player are the superior player and platforms for digital delivery. That is why we chose them.
Who is the typical Cinema Now subscriber? Who are you actually reaching?
We definitely have a male dominated audience – over 75% of our users are male. They tend to be slightly older than you might initially think. Our typical user is probably between 25 and 40 years of age. Generally speaking they have a higher than average income, higher than average education – you know that sort of thing. That is the kind of profile that we have in general, although it is changing all the time, as we have more and more of the mainstream business.
You have 455 films in your library at the moment. How many are you aiming for?
That’s what you’re seeing in the UK. We have territorial rights which protect our content from being viewed outside of the US for films that we do not have rights to – for example the collection of movies that you see in the UK is significantly inferior to what we offer in the US. In the US on our website right now we have almost 2000 films available. By the end of this year that will grow to probably close to 4000/5000.
In the UK, I am hopeful that we will be up well over 1000 films by the end of the year including the films from major studios.
How long do you think it is going to be before digital delivery becomes mainstream then?
Well, I think there are a number of factors that are sort of the driving part right now. One is the problem of availability; one is broadband penetration; one is hardware device availability and penetration in terms of everything from portable devices, media centre devices etc. etc.
I think there has got to be an alignment if you want to drive fast market adoption. When we started the company in 1999, we thought that by 2004 that time would have arrived. I can tell you now that is just the beginning and we will probably see this become a mass market over the course of the next two to four years – somewhere in that timeframe.
You mentioned that you don’t have the rights to distribute all of your films in all territories – what kind of problems are you facing in getting rights clearances for content in different markets?
No real problems, but rather an issue of needing to be set up in these countries with strong distribution partners before it is worthwhile to spend money acquiring local content and preparing it (encoding and storage) for distribution. Keep in mind that content is distributed on a territory by territory basis and with each version comes new contracts, payments and prepping.
Are you considering a global pricing model or will you be pricing the same content differently on a market by market basis?
We will try to keep it as consistent as we can, but we will definitely need to follow pricing schemes that are consistent with differences in the traditional distribution businesses.
Many content providers are getting excited about supplying content for mobile phones — when you do see serving media to mobiles becoming a mainstream business? Will there be a point when consumers will want to watch long media streams like films on their mobiles? Is there a maximum length that consumers will watch?
I think mobile distribution is really a business in the next few years for portable devices such as tablet PC’s, Portable Media Centers, etc. Cell phones for full length content seems a long ways away, if ever.
What of the content that is being delivered to people the films and content that they are buying has quite often incompatible DRM schemes behind it. What do you think is going to happen in that space over the next four years?
Windows Media has DRM that has been adopted by a lot of different people. I think there will be a shake-up in the market very shortly and one DRM system will be adopted by 95% of the content delivery industry.
What worries you about the future of digital delivery? What keeps you awake at night?
Well, I think, I sleep very well actually. I think the biggest concern is that people will jump into the marketplace prematurely – before there is a high quality user experience to be had, and that consumers will be turned off on the concept if it doesn’t work properly at first or it is not a compelling product offering.
I hope that companies recognise that this is still very much a virgin market, and that when it really begins to take off I think it’ll dwarf the size of what is happening in the DVD industry, and it’ll open up avenues for huge amounts of libraries, great content opportunities etc. I think you will see people consume more and more content and I think there will be plenty of room for a lot players to get into the business.
Curt is a panellist in the ‘Understanding the Range of Platforms – A Multitude of Destinations’ session between 14:00 and 15:30 at the IBC conference on Sunday, 12th September in Amsterdam. Register for IBC here
