A long-anticipated technology that will let consumers burn downloaded movies to DVDs is expected to be announced today, representing a potential milestone in the development of online movie services.
Sonic Solutions Inc. of Novato, Calif., said it had won approval for its technology, which makes it possible for people to record homemade DVDs containing the same copy protection found on professionally made DVDs. The approval came after protracted negotiations with the DVD Copy Control Assn., a consortium of movie studios, consumer electronics companies and computer makers.
The technology opens the door for download services from the likes of Amazon.com Inc. and Wal-Mart Inc. to let customers burn movies they buy to DVD, then watch them on television or portable DVD players. Those services still represent only a fraction of the revenue generated by movie rentals and sales.
"It removes the last real obstacle toward on-demand movie purchase," said Van Baker of Gartner Inc. "You don't have to go to a store anymore. You can just log on, say "I want this for my library, and away you go."
But as with any new technology, the Sonic Solutions Qflix software will take time to have an effect on the entertainment market.
Jim Taylor, a Sonic Solutions senior vice president, said consumers would need special DVD burners and recordable discs that use its technology, although the discs would play on standard DVD players. Those products probably won't appear in stores until early next year, he said.
Electronics manufacturers such as Pioneer Corp. and PC maker Dell Inc. have announced support for the technology.
The major Hollywood studios have insisted on anti-piracy protection identical to that offered on DVDs before they would permit online movie services to let consumers make copies of mainstream movies.
Download services such as CinemaNow Inc. have developed their own technology to permit copy-protected burning, but it's available only on a small number of old movies. That has limited viewers to watching movie downloads on PCs or hand-held devices such as Apple Inc.'s iPod.
Sonic says the movie industry uses its software to create 85% of the DVDs sold, and millions of consumers use its Roxio software for burning CDs and DVDs.
"Sonic is perfectly positioned for this to happen," Taylor said.
Online movie distributors such as Blockbuster Inc.'s newly acquired Movielink service will be able to let consumers buy, download and keep copies of the movies they've purchased.
"It really fits nicely into our strategy for convenient access to media entertainment," Blockbuster spokesman Randy Hargrove said.
The technology also clears the way for new companies, such as MOD Systems Inc. of Seattle, to experiment with new types of digital entertainment services in stores, such as video-on-demand kiosks.
"Now you can actually get down to business," said Anthony Bay, co-founder and chairman of MOD Systems.
Skepticism about the viability of the movie download business remains. Consumers spent about $29 million to buy or rent downloaded movies and shows in 2006, according to Adams Media Research. In contrast, they shelled out more than $24 billion for film rentals and purchases last year, according to DEG: The Digital Entertainment Group, a movie industry trade organization.
"It's not going to take the world by storm, because people haven't been screaming about the fact that they have to go to the store to buy a DVD," Baker said.