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DESCRIPTION OPPORTUNITIES AND CHALLENGES

Film industry is slow to embrace the internet as a media
The Film industry is still fighting a losing battle to prevent piracy. The Motion Pictures Association of America is working to enact laws that will penalize those who surreptitiously record films in movie theaters.


Spiderman 2

Meanwhile, 10 million people online have already downloaded bootleg copies of ``Spider-Man'' or ``Star Wars: Episode II -- Attack of the Clones.'' A summer blockbuster like "Spiderman 2 is now likely to be on the piracy chopping block.

The Film industry is spending more time on preventing illegal distribution of movies online while its not doing much to devise ways to adopt the Internet as a medium for legal distribution of movies. Movie companies must embrace the Internet and try to address demands for movies by accelerating their licensing of content for online distribution. Movies should be available online the same day DVDs are available in stores.


Online Piracy , Bootlegging & Napsterization of the film industry
A new generation of file-swapping services -- including Morpheus, Kazaa, Limewire and iMesh -- has allowed computer users to find and trade movie files with similar ease. File trading is done directly over instant-messaging services provided by America Online, Yahoo and Microsoft. As many as 400,000 to 600,000 illicit copies of films are downloaded every day.

There is an increased activity on IRC to share online film copies, Internet Relay Chat -- a sophisticated network of servers that requires users to know pass codes and basic code language and offer something to barter as the price of admission. The growing problem of online piracy could be costing film makers as much as 20 to 30 per cent of their home entertainment take.

A further problem is indicated by a study at AT&T Labs that found the majority of current films are leaked to peer-to-peer networks from inside the industry. John Stanley, Marketing Director of home entertainment at 20th Century Fox, fears that every part of the chain of making and releasing a movie is now vulnerable.

Online rental services gaining popularity
Success of Netfilx has proved that users are ready to shift base from Blockbuster shops to rental movies online. Netflix has made the movie rental experience delightful to the users. The simple drop-ship method at reasonable subscription fee has clicked with the user. This may slowly shift the movie rentals completely online in coming years.

Download-to-own and streaming options
Major studios are partnering with online companies who have taken up the task of providing legal downloads or streaming of movies at pay-per-view basis by www.cinemanow.com and www.movielink.com


CinemaNow subscription, streaming and downloads

CinemaNow, a pioneer in Internet-based video-on-demand, has become the leading destination for the authorized downloading and streaming of feature films on the Internet. It also introduced a download-to-own feature, or what's called "digital sell-through," which lets people buy and download a permanent copy of a film for unlimited playback.

Advanced digital media technologies and new developments
CinemaNow introduced progressive download capabilities that are designed to let people begin watching a newly rented movie within 30 seconds of the start of the download. The technology also lets people view films when they're not connected to the Internet.
The list of content partners with Cinemanow includes 20th Century Fox, Disney, Lions Gate, MGM, Miramax and Warner Bros which indicates that large number of studios are ready to adopt this medium.
People with Windows XP Media center can watch CinemaNow downloaded movies on a television set; and in the second half of 2004, they will be able to view them on a compatible portable device with Microsoft's upcoming Portable Media Centers, via USB 2.0.

Advancements in digital media technology like
Windows Media 9 series technology can be adopted as a single, cross-channel distribution format by film industry to meet growing demand of users to view movies online.
RealNetworks' new RealPlayer 10 will help drive adoption of digital media and interoperability because it supports all major music file formats, rights systems and a host of devices according to RealNetworks Chairman and Chief Executive Officer Rob Glaser.
RealNetworks has partnered with IBM to offer a product that will allow organizations to digitize, manage and secure their media content as well as distribute and sell use of that content, without having to create the technology infrastructure from the ground up.

Film industry is experiencing a new technology termed Machinima, or machine cinema, which is about shooting films in virtual reality. It is bringing traditional filmmaking together with animation and games technology..
The website www.machinima.com provides complete information, tutorials, books, production kits and software for shooting films in virtual reality. More of Machinima will be covered in the Future category.

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Marketing Overview

OPPORTUNITIES AND
CHALLENGES

Film industry is slow
in embracing internet
as a media

Online Piracy, Bootlegging & Napsterization of
the film industry

Online movie rental services gaining popularity

Download-to-own and streaming options

Advanced digital
media technologies
and new
development
s