There's been a lot of changes in the online video market lately -- with everything from studio-backed streaming efforts like Hulu, Apple moving into video with iTunes, to user-generated video sites. That change has made a huge impact on early players in the market like CinemaNow (www.cinemanow.com), a Marina Del Rey-based provider of video-on-demand movies and video. To get some insight into how the market dynamics have changed, we spoke with David Cook, President and COO of the firm, on how the company has adapted.
Thanks for sitting down with us. Where is the industry today, and how does CinemaNow fit into the picture?
David Cook: I would say that the market for distribution of full length movies is still very nascent. It's still in the early development stages. For CinemaNow, we made a change of direction about 18 months ago away from CinemaNow as a destination site, to focus on what can we to do embed into devices effectively. The key to distribution of video, is what can you do with the content once it's been acquired. We've separated the discovery from the playback, and focused on a device centric strategy. There are a number of key use cases. One is in mobile devices, and the second is getting content to the living room, through a set top box or burning a DVD. The entire industry is starting to think about that, that's why Netflix is doing a deal with LGM, and frankly, that's behind the comments coming out of the discussions between Blockbuster and Circuit City. Everyone realizes the battleground is shifting away from the PC towards the living room.
Is the competition from the many new Internet sites driving this?
David Cook: What's driving this is the use case for consumers. Short form content, like free TV episodes online or on YouTube, are great to have on your PC, on your lunch hour, when you want to consume a small amount of content. But when you are watching something like a movie, you want to sit back with a beer in hand and popcorn, and those things are really about the living room. We did some consumer testing, and went into a consumer home to see how they went to the content. While there is a strong use case for movies on a PC for a business traveler on a plane, most other people want to sit down in their living room. So getting that content to their TV is critical.
So what are you doing in that area?
David Cook: Over the last 12 months, we've been working with various companies. We're working at three levels, to create a great user experience on devices. We're working directly with chip manufacturers so they have access to the content, and can test to make sure it plays back well. We're working at the middleware layer, which is behind the relationship we announced with Macrovision at CES last year; and we're also working directly with consumer electronics companies where we are going to engage with them, provide them web services, and do work around the user experience and technology interface around devices. We found that we really have to go and engage on a management level with consumer electronics companies, because content management is new for them. Content management for them before now has been through a CD rack or DVD rack. Now, it's integrated into a service, where before once they sold a CE device that was the end of the relationship. The third part where we've spent a lot of time is in interoperability. Someone who buys the rights to a movie doesn't care which devices it will play on, it's our job to make sure that when they own the content that it's easy to put it onto devices.
You mentioned you've shifted from the consumer site, where does that leave the site?
David Cook: The site is still important, and the PC is still important. It's a great way to discover content, and provides a richness in the discovery experience that you can only create on a web site. We've made it so you can be sitting on a PC, discovering content, seeing recommendations, critic reviews, and choose the movie you want, make a purchase, and send it home, where it will be ready for you when you get there. I guess what I would say is the future of CinemaNow.com will be around discovery and the community around discovery, and management of your devices.
There's been a lot of talk about Hollywood rights and issues with Internet distribution, has anything changed at all here? What's the state of the industry now?
David Cook: The body of rights we're getting from studios today is definitely broader today than historically. The breadth of devices we can distribute to, the number of devices a consumer can obtain with a single purchase, and we're definitely seeing with rentals that it is broadening with appropriate devices. HD rights as well. There's been a general broadening of rights in the industry.
Finally, how does all that Apple is doing play into what you are doing?
David Cook: Apple's entry into the video market is a great from a market development and consumer awareness point of view. They also believe the key to success is what happens to the content once it's in the living room. That's where I believe we're developing a market edge.