FCC waiver paves way for studios to push first-run movies into the home; rattles theater owners

Apple Online Store“Federal regulators have granted a controversial waiver to the Hollywood studios that clears the way for them to show first-run movies in the home shortly after — or even during — their release in theaters,” Richard Verrier reports for The Los Angeles Times.

“The Federal Communications Commission on Friday granted a petition from the Motion Picture Assn. of America, the chief lobbying group for the major studios, that would permit for a limited-period use of ‘selectable output control’ technology for watching movies in the home,” Verrier reports. “The technology disables video and audio outputs on set-top boxes to prevent illicit recording.”

“The lack of security has been a technical block to delivering first-run movies directly to consumers in the home. Currently, movies are available for people to watch in the home via video-on-demand three to four months after they appear in theaters and simultaneous or soon after they are released on DVD,” Verrier reports. “Movie theater operators view warily any move by the studios to push up the showing of major Hollywood movies before they come out on DVD, fearing that it will undercut ticket sales.”

Verrier reports, “Under the ruling, studios could use the technology for a window of 90 days, or until the movie is released in DVD, whichever comes first. After the 90-day window, the studio would no longer have the security protocol.”

Full article here.

MacDailyNews Take: Apple TV?

50 Comments

  1. I don’t like the idea of anyone controlling anything in my house over the network or getting data from me I didn’t explicity allow. Just told the smart meter reader he could not install the durn thing.

  2. This could hurt movie theaters… but not kill them. Going to the theater CAN be a drag, with noisy patrons and expensive concessions (which, by the way, no one forces you to buy), but theaters have been threatened before, by television, then cable, then VHS, then DVD…

    Going to the theater is a social activity. We go with friends, we go on dates to get away from the ‘rents. People will likely continue to want that experience, at least for the foreseeable future.

  3. @ Macjammer

    I disagree – I think it’s good a thing for the theaters that they “will now have to compete with the lounge/living room.” They’ll have to compete on value instead of having an artificially captive audience. What’s worse is that in my small town, there’s exactly one theater – i.e., no competition whatsoever. So far, that is. This will help them clean up their acts (and seats and floors, too ” width=”19″ height=”19″ alt=”smile” style=”border:0;” />

    I was at a conference recently where the head of Disney Corp’s Revenue Management division was talking about how they priced water in the theme parks. He said the check local stores because “We don’t want our guests to feel insulted by the price.” (His exact words.) Right now, I get very insulted by the concession prices and the theater climate (like Usful Ijit says).

    @ Contrarian
    My hat’s off to you for your Osmosis Transitivity Theory. If your theory is also commutative, then adding the C<sub>2</sub>H<sub>6</sub>O after the fruit, nuts, etc. would be just as efficacious! Are you senior enough to be eligible for a Nobel on this one?

  4. I see the Apple TV as evolving into a device that can control your lights and appliances, in addition to its current uses. It has to be plugged into an outlet anyway…..

  5. obviously, you haters didn’t read the article:

    >>Also unhappy with the FCC’s decision are consumer groups, who says the disabling the video and audio outputs on the set-top box will limit the ability of people to record programming and force consumers to buy new equipment to watch movies on TV.

    “We are disappointed that the [FCC] has succumbed to the special-interest pleadings of the big media companies and ignored the thousands of letters from consumers,” said Public Knowledge, a Washington-based public interest group. “The order allowing the use of ‘selectable output control’ will allow the big firms for the first time to take control of a consumer’s TV set or set-top box, blocking viewing of a TV program or motion picture.”<<

    The movie studios will own your set top box. They will decide when you will have access. You lose consumer rights. Bend over, if you want.

    if you really want to pay $20-30 for a one-time play of a first run movie at home, go right ahead. The studios could do this today if they wanted. HDNet has had day-and-date releases of movies (on HDNet and in theatres). Of course, Oscar rules would have to change, since contenders MUST play in at least three locations (generally, NY, LA and somewhere else) for a week exclusively to qualify.

    Pedrag says it better. I defer to Pedrag.

  6. No, Predrag.
    But I thought everybody else saw it since it is right there in black and white.

    I’m with OJ on this. What the Hell business is it of the FCC’s?
    And who gives any of them the right to mess with my equipment?
    What’s next, another Haliburton no-bid contract?
    Oh, wait….wrong regime.

  7. great, unless of course if you’re in Canada where shortly you won’t be able to afford to stream or download movies. Once the CRTC gets done licking Bell’s hoop and allowing then to charge usage based rates at outlandish prices no one except the rich will be enjoying this…

  8. Hm…

    @ Contrarian
    My hat’s off to you for your Osmosis Transitivity Theory. If your theory is also commutative, then adding the C<sub>2</sub>H<sub>6</sub>O after the fruit, nuts, etc. would be just as efficacious! Are you senior enough to be eligible for a Nobel on this one?

    Great only if it ferments and alcohol is produced!

  9. Movie theatres would have to decrease tickets prices to compete. Since most of their profits are made from concessions and not ticket prices, they would decrease ticket prices and raise concession prices.

    I haven’t gone to the movies in years. There is nothing worth seeing that cannot wait for blu-ray or netflix. IMHO.

    You want social interaction? Try the bar,club, beach, etc.

  10. No one’s mentioned how much easier this would make it for those casual (and stupid) pirates. The ones who go into a theater with a video camera to shoot shaky cam DVDs of Hollywood’s latest, that they sell anywhere they can.

    For all the industry DRM, there is still an “analog” loophole… the TV screen and your eyeballs. If your eyes can see it, a camera can shoot it.

    Now those pirates can stay at home and shoot off of high def TVs (HD projectors would work great) with HD cameras on a tripod instead of handheld. They would produce DVDs with vastly superior visual and sound quality than what they could do in a movie theater.

    And in the privacy of their own homes no one will catch them doing it.

    With the right equipment and a little finesse, someone could turn out DVDs (casually indistinguishable from legal DVDs) that could be sold for $5 a pop with a easy 50% to 70% profit margin.

    In no way am I advocating that anyone do this. I’m just stating the obvious… but since no one has mentioned it yet, maybe it’s not that obvious.

  11. Technical block???

    No, it’s not a technical block when security is lacking. It’s an economic block — studios fear they lose money — but not a technical block. Delivering movies online anytime is technically possible — if the studios want it.

  12. @ @Contrarian—Aargh, grammar! My nemesis. *tips hat to you*

    @ Hm…
    I think I must have been in a delicious drunken stupor and missed my Nobel call one morning. Ah well, more for Obama. But, I am slowly pickling myself from the inside out, so I will have more shots in the future (pun intended).

    @jjjj

    I think “haters” is a bit strong. But yes, mea culpa, I did not read the article before asking my question of you. And while I am highly sympathetic to slippery slope arguments…

    http://papers.ssrn.com/sol3/papers.cfm?abstract_id=343640

    …I don’t see it here. I see this as a small step forward towards home move freedom, while movie studios combat the fear of piracy.

    http://thehill.com/blogs/hillicon-valley/technology/96741-mpaa-declares-victory-in-fcc-fight-over-pre-release-movie-screening

    But kudos to you for keeping me honest and making me read/think more.

  13. I don’t have these issues at our theater. We go to the cinema suites recline back in lounge chair and have waiters bring real food to us not popcorn. All while watching on a giant screen and noone under 21 in the theater.

    The other theater I go to the Warren theater is just for the experience its like stepping back in time to the 30s where the workers are all dressed up the seats are wide and very comfy. Especially in the balcony. But it’s an experience with hand painted murals on the wall and the latest in screens and projection equip. But I will say some theaters just don’t care. They would rather ignore the problem then deal with it. Frankly some theaters I have been to I am amazed they are stil in business.

    I think theaters are already in decline which the reason for cinq suites and dine in theaters. They are having to reinvent the experience to keep people coming. This will hurt some theaters others will adapt and change and come up with ways to get people to come in.

  14. The pirate copies of movies are in the market because the the movie owners are slow to release original copies in DVD format to the market. There are many people who are ready to pay more for newly release movies to watch at home at their own leisure. This include downloading original good quality new movies from the movie owners’ websites.

  15. I take “set top boxes” to mean cable and satellite as well as Apple TV. And “the technology disables video and audio output…” doesn’t give me a warm fuzzy – how long till it bricks your box?

    Then, as many have pointed out, you have the problem of Public Performance of the movies. I believe the major studios and the FBI frown on this. If they can’t regulate the number of people in your home, how much you wanna bet the price of movie rentals skyrockets?

  16. @ilovemymac

    If we didn’t have 3 kids in tow – we could see movies like you and not have a problem with the theaters. Of course – we could not regularly afford $200 Friday nights at your theaters with our 3 kids in tow.

    We are currently finishing our basement – after which we may visit the theater 1x year.

    Theaters have made themselves the enemy. I did not ask them to charge me $3 for a box of milkduds. The model has gotten way off base as the theaters are certainly not cleaner than the $2 theater they purchased and closed.

  17. OK, so you’re in you mid to late teens and where the hell are you going to make out with your girlfriend? Drive-ins are history and the only place (that’s dark) where you won’t be hassled is up the back of the theatre.

    Now don’t try and speculate that teens don’t make out in movies because my students talk about making out (or at least lying about their exploits) all the time.

    Didn’t you guys ever go through a right of passage with that drop-dead gorgeous girlfriend? Or were you too interested in geeky stuff that you never actually made out in a movie theatre. Give me a break.

    Not everything in life is measured as the next great thing or the next leap in technology. Sometimes the best thing about life is just doing the things that are simple…like making out in a theatre (and largely ignoring the movie).

  18. New release movies in your home is a trojan horse.

    This isn’t about movie night on your home theater and won’t that be great, this is about the future of SOC on every piece of technology manufactured from that day forward.

    Why stop at set-top boxes? How about DVRs, motherboards, and video cards and cameras?

    For those of you wondering why on earth the FCC has to be involved, it’s because they aren’t going to allow Hollywood to start implementing SOC without their approval. The FCC is protecting consumers with regard to regulating how far Hollywood can go on this issue. At least the FCC only gave them Windowed SOC, meaning your cable provider will only be able enable SOC for ninety-days at a time. It’s a sad day for DVR owners.

    The bigger issue is, the FCC bought into the notion that Hollywood is changing business models in their hope to bring entertainment directly to the consumer. THAT is the lie they used to convince the FCC to bless SOC; THAT is the lie they will use to sublimate control over how technology is manufactured in the future.

    The Tech pundits are the lapdogs of Hollywood, who will do almost anything to garner favor, including implementing DTLA and HDCP. HDMI has always contained the functionality to be remote-controlled by your cable provider, however their use of it has been strictly contained. Perhaps no more.

    Don’t hold your breath for new movie releases in your home.

    Too many movie theaters outside the United States have no laws regarding camcorders. Russia, Asia, et. al., ensures the torrents are replete with new releases and the MPAA has absolutely no control over that kind of piracy. These pirates are also manufacturing DVDs and selling them door-to-door across Europe and Asia, killing theater sales.

    They’re not the only one’s who are wreaking havoc on Hollywood’s bottom line though, it’s the street vendors here in the good ol’ US of A who have a direct pipeline to the torrents, and video rental stores, who are offered “screeners”, sometimes well in advance of a movies release to theaters.

    There are a lot of analog holes in this parade of activities and Hollywood’s SOC will do absolutely nothing to change that. The MPAA failed to demonstrate how the analog holes on set-top boxes are contributing to the decline in their profits.

    In fact, a case could be made how new-release movies piped into our homes might even turn casual movie viewers into pirates using their HD televisions, a camcorder and a tripod to reproduce high-quality copies for friends and family.

    What’s to stop pirates, who peddle this stuff on the streets, from doing just that with their own equipment? Not a damn thing!

    First-run movies in your home? I don’t think so.

  19. $20 is a deal if you have more than 2 or 3 people watching. Reality is that you can pack 5 to 10 people in a living room to run the film.

    Makes sense to me. As far as your won equipment, that’s your problem, dont like it, go to a theater.

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