Digital Media Distribution - Microsoft

Digital Media Distribution Opportunities
for the Film Industry

Technology advancements such as those in Windows Media 9 Series are enabling new distribution opportunities for the film industry including online, on CDs and DVDs and in theaters.

Growing Options for Viewing Films

The PC as an entertainment hub is fast becoming a reality with increased processing power combined with a fast broadband connection, connectivity to a variety of displays, and increases in the compression/decompression of high-end audio and video.

These new capabilities open up an opportunity and a challenge to film distributors: how to target this new digital entertainment gateway with digital movies and video but not lose control of the content in the process. Already today some estimates say there are as many as 500,000 digital movies being exchanged illegally over the web. How can technology help to bridge the gap between what consumers want (find, acquire, playback and share movies online) and what the film industry wants (secure content, business models that work, a great consumer experience)?

Advancements in digital media technology are opening up new distribution opportunities for the film industry. In order to take advantage of these new opportunities the film industry requires the ability to secure valuable assets, deliver them to customers and ensure a high quality playback experience on par with other playback options such as watching a DVD in a home theater or a pay-per-view movie on cable. Technology such as Windows Media 9 Series is being developed to meet those requirements and open up new distribution options.

This whitepaper discusses key features in Windows Media and how they are enabling three distribution channels for the film industry: the Internet, CDs and DVDs, and digital media enabled theaters.

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Internet Distribution

The advancements in Internet digital media distribution have happened so quickly. The first generation of streaming came online around 1994 with the first upsurge in Internet usage. This experience was audio only and bad quality audio at that. But the potential was realized by technology pioneers and teams of developers worked to get higher quality into the small file sizes needed to be able to transport the data in a stream in real-time to the user.

The second generation of streaming is what we’re familiar with now. Good audio quality in reasonable file size and acceptable video quality when played back in a small window. The second generation of digital media streaming also introduced digital rights management, the ability to secure content and associate it with licenses that authorized the playback.

The third generation of digital media on the Internet is where Microsoft is now focusing development efforts. This new technology will meet the requirements of the film industry in the following areas:
Security – The third generation will include more robust digital rights management solutions to secure the delivery of digital media.
Quality – The consumer needs to have a high quality experience, similar to what they’re used to getting when watching movies at home on TV both in the video quality and in the quality of the delivery.
Improved economics – With technology providers like Microsoft focusing on creating digital rights management technology to secure the content and building the technology to deliver a high quality consumer experience, the film industry can focus their efforts on creating business models for distributing content online.
Windows Media 9 Series was built around these requirements and includes some new features that directly impact these areas.

No More Buffering Delays
A new feature in Windows Media 9 Series called Fast Streaming delivers an "instant-on " streaming experience for broadband users, effectively eliminating the buffering delays that consumers experience with streaming video today and offering a more TV-like viewing experience with the ability to quickly channel surf around video content on the web. This also eliminates the buffering users get when an ad is inserted into a video stream.

Fast Streaming also automatically optimizes the delivery of streaming audio and video to take advantage of the full bandwidth available to the user, which vastly reduces or eliminates the impact of congestion on the Web for broadband users.

High Quality Audio and Video
Codec improvement is an ongoing process. The new Windows Media 9 Series audio and video codecs improve quality approximately 20% without increasing the file size. This means online film providers can either increase their current quality levels or decrease their current bandwidth costs by switching to the new codecs.

Combining Fast Streaming with the new audio and video codecs brings a greatly improved online video experience to consumers and makes online distribution of films via video on demand services even more attractive to consumers and film distributors.

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Film Distribution on CDs and DVDs

Next generation DVD players are being developed to support the playback of more than the standard MPEG2 DVD format. This year at CES Microsoft announced that several leading DVD player manufacturers will be supporting Windows Media Audio on their DVD players this year with support for Windows Media Video not far behind. These manufacturers include Panasonic, Toshiba, Shinco and Apex and make up 99% of the DVD player industry.

The advantages to using a format like Windows Media on a DVD is that the increased compression efficiency means the DVDs can hold more movies, up to 4 on a single DVD, and still provide a high quality playback experience. Many PCs including PCs shipping with Windows XP are capable of playing back DVDs which broaden the DVD viewing options.

Alternatively some film distributors are selling single movies on a CD. A two hour movie encoded at 750 kilobit per second easily fits onto a standard CD offering an inexpensive movie distribution option.

Digital rights management works on CDs and DVDs too. Users simply pop in the protected content and either go online to acquire the license, or with some devices the license is acquired off of the CD or DVD itself.

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Theater Experiences

Technology is helping tomorrow’s theaters overcome some of the challenges that are squeezing the profitably from theater exhibition today. Some of those challenges include:

The Challenge
High Distribution Costs – The cost of sending films out to theaters across the country and around the world is fixed today based on the cost of the film prints themselves, anywhere from $1200-2000 per theater.

No Security – Distributors have little control over a film once it leaves their facilities. They have to hope that it’s delivered safely to the appropriate theaters and doesn’t fall into the wrong hands or is damaged along the way.

Degradation Issues – As a movie is screened it becomes progressively more scratched and dirty, eventually demanding a replacement print.

Limited Programming Flexibility – Currently theater owners are only set up to receive 35 mm films. Since the cost of film production is so high there’s little content beyond major independent and studio movies that can afford to take advantage of a theater screening.

Inflexible Advertising – Advertisers love advertising in theaters because they have a captive audience. But today’s theater advertising is limited to slide shows and rarely a filmed ad. But again, given the costs of film distribution not many advertisers can afford to send a 35 mm reel to each theater and even if many advertisers did so, the theater owners aren’t equipped to switch from one ad reel to the next.

The Solution
Digital distribution and exhibition of content in tomorrow’s theaters will overcome many of these limitations.

Streamlined Distribution – The distribution process will no longer involve bulky expensive film reels. Films can be sent digitally over the IP network to targeted theaters without ever having to duplicate a 35 mm reel. This streamlined distribution will pave the way for new programming options including concerts, sporting events, distance learning and more. Theater owners can program content quickly and easily, moving content from one auditorium to many, meeting market demand in a way they are currently unable to.

Integrated Digital Rights Management – Digital theater content will be secured before it ever leaves the content owners facility. DRM will enable tracking and license serving so theaters and content owners know exactly when and where the content is accessed.

Digital Preservation – The one thousandth time a digital movie is screened provides the same quality as the first time. There is no breakdown in the digital file as there is with film.

Demographically targeted advertising – Digital ads can be served from one location and targeted to specific theaters based on content being shown in that theater to a particular demographic.

The benefits of moving to digital distribution to theaters are clear. The costs for theater owners have been historically very to purchase the digital projectors and other equipment but some smaller theaters are finding that they can begin to achieve some of the benefits of digital cinema with off the shelf hardware and software. Recently theaters in Seattle and Dallas completed digital screenings of the critically acclaimed independent film “Wendigo.” Using a standard Windows-based workstation, Windows Media for the encoding, deliver and playback, and a DLP projector, the theater owners delivered high quality screenings. Customers were unable to tell that they were not watching a 35 mm film print.

Although a digital screening as described above isn’t something that would meet the requirements of a major blockbuster it is a great option for theaters interested in delivering independent and alternative content geared to specific audiences.

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Conclusions

Technology is changing the rules of the film industry just as it did for the music industry. With the growing interest from consumers to get movies and video content in different ways with different options, filmmakers and distributors are turning to technology to meet their demands. New technology like Windows Media 9 Series strives to achieve higher quality, greater efficiency, and greater audience reach all while driving down costs. All of these benefits open up new distribution opportunities to the film industry.