April 17, 2009
Where's My All-You-Can-Eat Movies?
Farhad Manjoo tries to figure out why nobody’s solved the riddle of streaming movies on the internet:
When I called people in the industry this week, I found that many in the movie business understand that online distribution is the future of media. But everything in Hollywood is governed by a byzantine set of contractual relationships between many different kinds of companies—studios, distributors, cable channels, telecom companies, and others. The best way to understand it is to trace what you might call the life cycle of a Hollywood movie, as Starz network spokesman Eric Becker put it to me. We all understand the first couple of steps in this life cycle—first a movie hits theaters and then, a few months later, it comes out on DVD. Around the same time, it also comes out on pay-per-view, available on demand on cable systems, hotel rooms, airplanes, and other devices. Apple’s rental store operates under these pay-per-view rules, most of which put a 24-hour limit on movies. The restriction might have made sense back in the days when most people were getting on-demand movies in hotel rooms and the studios didn’t want the next night’s guest piggybacking on rentals. It doesn’t make much sense when you’re getting the movie on your MacBook. But many of the contracts were written years ago, and they don’t reflect the current technology.
A movie will stay in the pay-per-view market for just a few months; after that, it goes to the premium channels, which get a 15- to 18-month exclusive window in which to show the film. That’s why you can’t get older titles through Apple’s rental plan—once a movie goes to HBO, Apple loses the right to rent it. (Apple has a much wider range of titles available for sale at $15 each; for-sale movies fall under completely different contracts with studios.) Between them, Starz and HBO have contracts to broadcast about 80 percent of major-studio movies made in America today. Their rights extend for seven years or more. After a movie is broadcast on Starz, it makes a tour of ad-supported networks (like USA, TNT, or one of the big-three broadcast networks) and then goes back to Starz for a second run. Only after that—about a decade after the movie came out in theaters—does it enter its “library” phase, the period when companies like Netflix are allowed to license it for streaming. For most Hollywood releases, then, Netflix essentially gets last dibs on a movie, which explains why many of its films are so stale.
I actually think Netflix Watch Instantly is pretty good. It’s got the first two seasons of 30 Rock, the complete Monty Python’s Flying Circus, some old Woody Allen and Pasolini movies, The Big Sleep, and The Adventures of Elmo in Grouchland. It’s not perfect, but neither is Showtime.