View Full Version : Disney goes Digital

04-10-2003, 11:33 AM
Walt Disney_plans to start live tests this year on a digital home video distribution system which could bypass conventional rental services, undermine movie piracy, and deliver new profit streams directly to the group's bottom line.

The announcement, from Michael Eisner, chairman and chief executive, marks an aggressive move to embrace digital technology in the home, which had been seen by many in Hollywood as more of a threat than an opportunity.

It is also a significant departure from the business model of Movielink, an internet-based service backed by five other leading studios, which allows viewers to download and watch films on their personal computers.

The Disney service, dubbed Movie Beam, will use a portion of the digital broadcasting spectrum used by its ABC over-the-air network, to feed up to 10 films a week into domestic television set-top boxes with a storage capacity of 100 full-length features.

It will be tested this autumn in Salt Lake City and two other centres, Mr Eisner told an audience at the National Association of Broadcasters' annual convention in Las Vegas.

"If we don't provide consumers with with our products in a timely manner, pirates will," he said.

At an investment conference later, he said the new technology could provide a windfall similar to that which came from the introduction of the video cassette recorder which changed the economics of the film industry.

Since then explosive growth in the five-year-old DVD business - which many studios accepted only reluctantly - has helped further dissipate Hollywood's long-standing technophobia which was first manifested in resistance to the introduction of the soundtrack, colour television, and the VCR.

The industry was still conflicted, Mr Eisner said. It spent enormous sums encouraging people to watch its films and then spent even more devising ways to "control and limit" how people saw them.

Disney was well aware of the perils of piracy in the digital environment, but would not allow fear to stifle innovation in production and distribution, he said.

The initiative follows an industry-wide commitment to press ahead quickly with the digital distribution of new movies via satellite or disc to servers in cinemas equipped with new-generation digital projectors.

Only a handful of US theatres are currently equipped with the system, which will cut costs by obviating the need for thousands of hand-delivered film prints, but industry officials said last month that a full-scale roll-out would start next year.