Internet

MOVIE DISTRIBUTION AND THE INTERNET

The Internet quickly became a significant retail outlet for the distribution or sale of DVD releases, and by 2001 all of the major film companies had partnered with the Internet Movie Database, or IMDb (www.imdb.com), and leading online retailer Amazon.com to promote new theatrical films, personalize movie showtimes, and sell DVDs. In October 1990, IMDb started as the Usenet newsgroup bulletin board rec.arts.movies to which volunteers would post information about films and discuss movies with other fans. With the advent of the Web, the bulletin board was transformed into one of the most visited sites on the Internet, averaging over 30 million visitors each month and containing over 6 million individual film credits, including information on over 400,000 films, 1 million actors and actresses, and 100,000 directors. The IMDb has also built a strong sense of community among its almost 9 million registered users, who can post to the public discussion forum available for each film and rate a film between 1 and 10. All of this information lends itself to the customized links available for celebrity news and gossip, images of stars, box-office and sales statistics, and Amazon.com for DVD purchases.

In addition to providing easy access to detailed information about films and convenient ways for consumers to purchase DVDs, the Internet also provides a distribution method for alternative or independent fictional films and documentaries. The technical and economic advantages of digitization and online distribution have benefited academics and researchers through the availability of digitized film archives like the Library of Congress Paper Print Collection and the Internet Archive's Movie Archive, which includes the Prelinger Archives. The Internet also serves as a significant medium of distribution for multimedia art, Flash movies, film parodies, home movies or videos, and animated political cartoons. In addition, the distribution and sale of pornographic films and videos online totaled over $1 billion in 2005 and comprised a large portion of total Internet file-sharing volume.

Due to technical limitations of bandwidth and connection speeds as well as legal obstacles surrounding the Internet rights to distribute Hollywood films, the independent "short" has become one of the most common categories of film distributed online, including a large selection of animated shorts. One of the most popular sites for viewing online films is AtomFilms.com, which launched "AtomFilms Studio" in January 2006 to fund independent producers looking to create short films specifically for Internet broadband distribution. In 2005, in addition to streaming content, AtomFilms.com's major competitor, IFILM.com , expanded its distribution methods to deliver video-on-demand (VOD) to cellular smart-phones and personal digital assistants (PDAs).

In 2001 BMW premiered its eight-part online promotional series of big-budget, short action films titled The Hire , made by such established international film directors as David Fincher, John Frankenheimer, Ang Lee, Guy Ritchie, Kar Wai Wong, Alejandro González Iñárritu, and John Woo, and such stars as Clive Owen, Stellan Skarsgård, Madonna, Forest Whitaker, and Gary Oldman. On its Website, BMW boasted that the films had been viewed over 100 million times before they were removed from the site in 2005, despite the fact that the films were released on DVD in 2003.

Although technical and infrastructural obstacles related to bandwidth and video quality and size may be overcome, Internet copyright issues, Internet distribution rights, and Internet release time "windows"—which traditionally go from theaters, video/DVD, pay-per-view, premium cable, network television, and basic cable—have also complicated online distribution. For instance, the major rights holders (that is, Hollywood studios and entertainment conglomerates) have prevented companies like Netflix from shifting their distribution and rental methods to on-demand streaming and downloading over the Web, although the online DVD-by-mail rental service is still one of the more profitable Web ventures, ending 2005 with about 4.2 million subscribers and sales approaching $1 billion.

Responding to increased consumer demand, and in response to the fact that only 15 percent of worldwide Hollywood film revenues come from box-office profits, and that two-thirds of the income for the six major studios now comes from the home theater divisions, the majors have begun to pursue their own online distribution options by offering feature-length films already available on DVD for legal downloading, including MovieLink ( http://www.movielink.com ), a joint venture of MGM, Paramount, Sony, Universal, and Warner Bros.; and CinemaNow ( http://www.cinemanow.com ), financed in part by Lions Gate and Cisco Systems. In December 2005, Apple Computer also began to distribute animated short films from Pixar (co-owned by Apple CEO Steve Jobs), Disney-ABC television programs, and music videos through its popular iTunes music download service. While no feature-length films are included in Apple's library, the January 2006 purchase of Pixar by Disney may facilitate the distribution of Disney's feature films through Apple's service.

By the end of the summer of 2005, industry analysts and mainstream news outlets were announcing the "death of the movie theater" as industry figures and independent film companies began to question and challenge traditional film release windows. Director and producer Steven Soderbergh ( sex, lies, and videotape [1989], Traffic [2000], Erin Brockovich [2000], Oceans Eleven [2001]) entered into an agreement with 2929 Entertainment, HDNet Films, and Landmark Theatres to produce and direct six films to be released simultaneously to theaters, DVD home video, and on HDNet high-definition cable and satellite channels. For the 26, January 2006, "stacked release" of the first film from that venture, Bubble , 2929 Entertainment agreed to share 1 percent of the home video DVD profits with theater owners who exhibited the film. Another new distribution model of simultaneous releases was announced in July 2005 by ClickStarInc.com, a Web venture between Intel Corp. and Revelations Entertainment, co-founded by actor Morgan Freeman. ClickStar will offer legal downloading of original feature films before they are released on DVD and while they are still in first-run theaters. Freeman's considerable star power, which he is lending to several of the ClickStar films, may give a film enough exposure through its Web release to be distributed through other media, like cable television.

It remains to be seen whether or not the major studios will welcome these new methods of exhibition and release windows for distribution. History suggests that the mainstream entertainment corporations will resist this model since it would change the established profit-making system. Even if video-on-demand over the Web becomes widely adopted, like the rapid adoption of television by consumers in the 1950s and 1960s, predictions about the impending death of the movie theater may be exaggerated or misguided. The film and entertainment industries have a long history of appropriating newly established models of production, distribution, and exhibition, as well as purchasing independent companies that pose a significant threat, as the acquisition of many formerly independent studios by the Hollywood majors attests. In addition, the same companies that own the major film production, distribution, and exhibition outlets are horizontally and vertically integrated companies that already have oligopolies in many of the other media sectors that will distribute these films in the future, including television, cable, and the Internet.