European regulators have approved a joint venture between The Walt Disney Company, Columbia Pictures (a division of Japanese electronics giant Sony), and the UK’s ON Demand Group to provide a video-on-demand service in Britain and Ireland. The new venture will be called MovieCo and will give UK cable network operators an alternative to procure video content other than BSkyB, which is currently the dominant player on this market.
The MovieCo joint venture will offer films to customers of Britain and Ireland’s two biggest cable companies, Telewest and NTL. According to the EU statement, it ‘will provide an open platform to which movie content providers will have access on a non-discriminatory basis, therefore enabling them to make films available by way of video-on-demand directly to customers.’ The deal is also likely to help improve Hollywood’s leverage with BSkyB, as the satellite TV company renegotiates with individual studios over the rights to films for its stable of movie channels. Sky offers its movie channels to cable customers as well as its own satellite subscribers.
The new service will allow viewers to pick from a wide selection of movies to watch whenever they want. The technology is expected to be a key weapon for cable and telecommunications providers in their battle against satellite firms. Companies including BT Group and France Telecom’s Wanadoo also have video-on-demand platforms in the works. Video Networks’ HomeChoice already offers video-on-demand to areas of London.
More importantly, MovieCo will add legitimacy to the concept of on-demand movie downloads to PCs. The business has been in a state of flux because of piracy on popular peer-to-peer networks (P2P) and concerns over the quality of digital movies. To boot, the sector is also under constant scrutiny of the Recording Industry Association of America (RIAA), which is making good on its threat to sue file-swappers. The trade association has been busy in the US issuing subpoenas to ISPs demanding the identities of subscribers using P2P applications to upload and download copyrighted works.