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Cinram Launches CDSA Content Protection & Security Initiative
Cinram International has announced the initiation of the CDSA Content Protection and Security certification process, which for over ten years has assisted content holders and their service providers in maintaining the most responsible practices and policies for secure handling of intellectual property for home video, music, video games and business software.
CDSA, the international content protection association, and Cinram will begin this comprehensive certification process this year at Cinram’s European operations.
“We believe that CDSA will provide an independent, industry-endorsed validation of the systems that we have already in place for the protection of our customers’ content,” says Kenny Aldridge, Cinram Corporate Compliance Officer.
Supported by major content holders including Universal Home Entertainment and Electronic Arts, CDSA’s latest Content Protection and Security (CPS) standards were developed by a worldwide consortium of anti-piracy and security experts to address the evolving needs of today’s physical and digital content delivery supply chains – from content creation to post production, replication through distribution. The CDSA standard is a result of over ten years of in-the-field development; its programs are administered by ISO 9001-trained, entertainment industry professionals in North America, Europe and Asia.
Linda Dyson, CDSA Worldwide Director of Anti-Piracy and Compliance Programs noted, “The secure handling and protection of intellectual property is the highest priority for the entertainment industry. Cinram’s pursuit of CDSA’s high standards in the Content Protection and Security certification program demonstrates its strong commitment to this crucial industry need.” CDSA
RealNetworks Drops Fight To Market DVD Copying Software
RealNetworks is giving up on its RealDVD copying software in a settlement of more than a year’s worth of litigation with the six major Hollywood movie studios, Viacom Inc., and the DVD Copy Control Association.
The company said it has agreed to a permanent injunction against its marketing of RealDVD or any similar product, adding that it would pay studios $4.5 million in legal costs and fees.
Real said it would turn off the metadata service that provides DVD cover art and movie information to RealDVD users, and refund the purchase price to the software’s 2,700 customers.
The settlement is the latest step in Real’s restructuring effort. Rob Glaser, the company’s founder and longtime CEO, stepped down in January. In February, Real and Viacom’s MTV Networks announced their intention to spin off the Rhapsody streaming music service into its own company.
“We are pleased to put this litigation behind us,” says Bob Kimball, president and acting CEO. “This is another step toward fulfilling our commitment to simplify our company and focus on our core businesses.”
The injunction is another notch in the belt of the DVD Copy Control Association, which licenses DVD’s encryption technology. “After months of arguments from both sides, the legal message is clear: making a DVD copier is a breach of the CSS license,” says DVD CCA president Jacob Pak.
Release Window Wrap: What Does ‘Alice’ Deal Portend For Home Entertainment?
Theatrical distribution insiders tell Variety that it took a big title such as Disney’s “Alice In Wonderland” to “redraw the line” on release windows. “No exhibitor wanted to risk a poor quarterly earnings report because they’d passed on screening ‘Alice,’ whose commercial prospects appear bright, particularly with the upcharge for a 3D ticket,” the magazine says in its Feb. 26 analysis of the release-window debate.
Exactly what the Disney truce portends for the quarterly earnings of DVD distributors and other home entertainment service providers, however, is far from clear.
So far, few have addressed the extent to which a film’s “commercial prospects” factor into a studio’s push for a shorter theatrical window. Commercial prospects can shift right up to the eve of a film’s theatrical premiere.
From the standpoint of recouping a film’s production costs, studios would seemingly benefit from a general ability to move up home entertainment release dates if a title’s box office forecasts dimmed. But such an option, if exercised too freely by studios on a varying case-by-case basis, could wreak havoc on home entertainment supply chain planning.
The chief issue for service providers going forward is whether studios will push for a uniform shortening of theatrical release windows, or insist on flexibility for individual titles.
Wal-Mart And Vudu: Movie Streaming Service Ranks High In Studios’ New Distribution Heirarchy
Wal-Mart is getting back into the digital entertainment distribution business with its planned acquisition of the Vudu movie download and streaming service.
The deal, which is expected to close within the next few weeks, shores up the digital position of the country’s top DVD retailer, as studios mull reconfiguration of release windows to favor physical disc sales as well as a la carte video-on-demand transactions.
Vudu has trailed Netflix and Apple in Internet-based video on demand since its 2007 debut. But the company has licensing agreements with most major studios as well as independents, offering some 16,000 titles. Like Netflix’s service, owners of certain new TVs and Blu-ray players can access Vudu’s catalog directly from their TV screens. Like Apple, Vudu offers a-la-carte pricing for movie downloads and streams.
Vudu’s pricing structure helps to put the service higher up on studios’ newly emerging distribution hierarchy than Netflix and Redbox, both of which have agreed to rent new-release films from Warner Bros. four weeks after their DVD street dates. For example, Warner Home Video’s new release “The Informant!” is now available for rent or purchase on Vudu, but unavailable to Netflix subscribers until March 23.
Wal-Mart was unsuccessful in establishing its own movie download service three years ago. However, with consumers increasingly aware of direct-to-TV streaming, the market seems ripe for reentry.
It remains to be seen whether Vudu will continue as a separate business and brand – and to what extent Wal-Mart integrates the service with its DVD and Blu-ray merchandising operations.
Redbox Relents, Signs Window Deal With Warner
Furthering its efforts to establish an exclusive sales window for DVDs, Blu-ray discs, and video-on-demand services, Warner Bros. Home Entertainment has reached a two-year deal with Redbox that keeps the studio’s movies out of the company’s rental kiosks for their first four weeks of release.
As part of the agreement, which runs through Jan. 31, 2012, Redbox has also dropped its antitrust lawsuit against Warner, which it filed last August. The deal may prove to be a template for settling litigation Redbox still has pending against the home entertainment units of Twentieth Century Fox and Universal Studios.
While both companies tout the settlement as a victory, Warner is the one that emerges with what it sought all along: a containment of the kiosk company at the tail end of home entertainment distribution.
In addition to shoring up DVD and Blu-ray sales, the studio is hoping that its new window strategy will spur the video-on-demand market, from which it could earn a relatively high profit margin. From Warner’s perspective, the kiosk serves as the market’s low-margin dollar bin (or dollar-a-night, as it were).
For Redbox, renting DVDs was a $774 million business in 2009. The company says it will benefit primarily from reduced product costs and optimal stock levels of Warner movies. In other words, Redbox will no longer have to send “runners” to purchase copies of new-release DVDs at retail cost from local Target and Wal-Mart stores to keep its kiosks well-stocked. Such a “workaround” solution has put pressure on Redbox’s consumer pricing model, as well as its bottom line.
Warner also is supplying Redbox with Blu-ray discs, which the kiosk vendor is currently testing in select markets.
Shares of Redbox’s Coinstar parent traded higher following news of the Warner deal, partially on hopes that Redbox will strike similar settlements with Fox and Universal. The four-week window is the central issue in those suits.
An end to the litigation would bring an end to Redbox’s expensive retail “workaround” as well. Earlier in February, Coinstar CEO Paul Davis told analysts that the workaround to secure discs from Warner, Fox, and Universal cost Redbox as much as $25 million during the fourth quarter of 2009, against revenues of $232 million.
DVD, Blu-ray Sales Lift Viacom Profits In Fourth Quarter
Viacom reported Feb. 11 a $214 million increase in fourth-quarter profitability for its filmed entertainment unit, reflecting among other things a higher year-over-year contribution from Paramount Pictures’ domestic DVD and Blu-ray releases.
Worldwide home entertainment revenues of $1.15 billion represented a 12% increase over 2008’s fourth quarter results, with strong DVD and Blu-ray sales for Paramount’s “Transformers 2: Revenge of the Fallen,” “Star Trek” and “G.I. Joe: The Rise of Cobra,” Viacom said.
Viacom’s announcement follows similar news from The Walt Disney Company, which credits its home entertainment unit with boosting studio profits during its most recent quarter.
“Paramount Pictures significantly boosted its profitability in 2009 as the studio’s strategy of producing a smaller slate of films, anchored by franchises, began to pick up momentum,” said Philippe Dauman, Viacom President and CEO. “We also were pleased to see renewed consumer demand for our new DVD and Blu-ray releases in the fourth quarter.”
Viacom’s filmed entertainment revenues declined 9% to $5.48 billion for the year overall, however, primarily due to lower theatrical and home entertainment revenues. A smaller slate of films was the primary driver of the 23% decrease in worldwide theatrical revenues of $1.32 billion. Worldwide home entertainment revenues were down 8% to $2.50 billion for the year reflecting fewer releases as well as what the media conglomerate called “continuing softness in the market.”
Disney Credits Home Entertainment For Studio’s Income Surge
A rise in home entertainment profits helped Walt Disney’s studio division post a 30% increase in operating income for its first quarter, the company announced Feb. 9.
The studio recorded operating income of $243 million on relatively flat revenues of $1.9 billion. Higher domestic home entertainment results were primarily due to lower distribution costs and marketing expenses, driven by cost reduction initiatives, and lower production cost amortization and participation expense.
Disney said the decrease in amortization and participation expense reflected the strong performance of Disney/Pixar’s “Up” and romantic comedy “The Proposal” in the current quarter, compared to “WALL-E” and “The Chronicles of Narnia: Prince Caspian,” which had high participation costs, in 2009.
GameSupply: At EA, Digital Markets Bring New Risk Management Framework
Videogame developers have long been averse to working “under any regime,” notes Spencer Mott, Chief Information Security Officer of Electronic Arts. But with game publishers now reliant on a global network of developers, and gamers themselves increasingly adopting online subscriptions and other digital models, Mott says the industry needs a new framework: “we need quite mature ways to assess and address risk when working in a secure environment.”
Mott oversees global security and risk management (SRM) at the world’s largest games developer, leading a team of consists of 27 security specialists and employee “sentinels” who formally advocate SRM goals and objectives. EA’s SRM team focuses on three operational pillars: risk management services, data compliance, and security operations.
The year 2010 is seeing the publisher push further into direct-to-consumer models for downloadable game content. Subsequently, Mott points out, EA is increasingly involved in e-commerce customer details. The regulatory compliance aspects of “how we manage that relationship” encompass “a great amount of work” for the software publisher’s SRM unit.
Flowing from closer customer relationships is the need for EA to maintain an “instant response” plan for recovering from online game server outages or hacker attacks.
“We have to expect things are going to happen,” says Mott, who looks for publishers in general to promote security management “as more of a business-type function” than a back-end operation.
Continued development of open, industry-wide standards for baseline security and risk management help EA and other publishers “set an expectation level with our partners,” Mott says. But amid ever-shifting markets and consumer preferences, Mott advocates a flexible approach to implementing risk management practices industry-wide. “When the business is changing — and over the past couple of months, all of the projections were wrong on how the game business was changing — if you introduce too much policy into the process, you can stifle innovation and creativity.”
Mott will join BayTSP’s Matt Sprague in a presentation on content security at the GameSupply conference Feb. 10 in San Jose, CA. For more information, visit www.GameSupplyAcademy.com.
BluFocus Lauches Testing Lab, Webinar For 3D Home Entertainment
With studios looking to bring their first 3D home entertainment products to market later this year, DVD and Blu-ray quality assurance firm BluFocus is launching a suite of 3D testing, certification and consulting services.
The Burbank, CA-based firm’s new 3D Focus Laboratory offers THX Certified High Performance 3D demonstration and testing environments for device manufacturers, content owners and producers to use as needed during their production process.
In addition, BluFocus plans to hold a webinar sponsored by MESA, THX and the 3D@Home Consortium next month to serve as a primer on Blu-ray 3D encoding and authoring. The goal of the March 4 webinar, says BluFocus CEO Paulette Pantoja, is to promote collaboration on 3D products between content owners, producers, and developers.
The webinar series will address the many “unknowns” surrounding 3D home entertainment, Pantoja says — ranging from technology issues to what consumers are willing to do for an optimal 3D home experience. Confirmed participants include Sensio and TDVision, which will discuss 3D video encoding approaches; Netblender, which will address authoring; and Trailer Park, which will make a presentation on 3D content creation.
For further program information on the “3D-Focus Part 1: 3D for Blu-ray” webinar, visit www.blufocus.com/3D-Focus/. Those interested in attending or presenting at future 3D-Focus Lab Webinars can contact 3D-FocusWebinar@blufocus.com.
For more information on the 3D-Focus Lab’s services, contact 3D-FocusLab@blufocus.com.
Technicolor Picks Up Warner DVD Business
Following Cinram’s announcement that Warner Home Video was ending its exclusive relationship with the DVD services company, rival disc manufacturer Technicolor says that it will fulfill the studio’s DVD and Blu-ray replication and distribution needs.
Technicolor announced on Feb. 2 that it expects its new long-term contract with Warner Bros. to start generating material revenue in third quarter of this year. The Paris-based company says that the deal also covers other aspects relating to strategic technology initiatives.
“We are extremely excited to be working with Warner Bros., the recognized world leader in packaged media,” said Frederic Rose, Technicolor CEO, in a statement.
Cinram stated that it would continue to provide services to Warner Home Video through July 31.
Prior to Technicolor’s announcement, a Warner Bros. spokesperson issued a statement saying: “As part of our standard practices, we are constantly looking at the systems we have in place and evolving them to meet our changing needs. The decision to change our video replication and distribution vendor, while difficult to make, is the right one for us at this time.”
Mesa Events
Building the Bridge from Physical to Digital (in association with DEG)
(in association with DEG and co-produced by Futuresource)
September 23-24, 2009
Millennium Gloucester Hotel, London
Blu-Con 2.0 2009
The 2nd Congress of Blu-ray Innovation
(Presented by DEG)
Beverly Hilton, Los Angeles
Maximizing Efficiencies and Minimizing Risk in the Global CE Supply Chain
(in association with CES)
Co-located with the EMA Video Game Supply Chain Council Meetings
(in association with Entertainment Merchants Association)
February 10, 2010 at the Hilton San Jose, Silicon Valley
Esty Speaks at ESCA 2009
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