[opendtv] News: Sony Does Digital
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
- Date: Thu, 2 Jun 2005 06:47:02 -0400
http://www.forbes.com/2005/06/01/cx_ld_0601sony.html
Digital Media
Sony Does Digital
Lisa DiCarlo, 06.01.05, 6:00 PM ET
NEW YORK - More than five years ago, Sony Pictures Entertainment took
an early gamble by committing tens of millions of dollars to begin
digitizing its vast library of TV shows and movies. Now it looks like
the company is positioned at the forefront of the digital
entertainment revolution.
SPE, a division of Sony, recently began distributing its content to
customers (broadcasters, cable systems and cable channels) as digital
files rather than analog or digital tapes. The move allows the
company to make its content usable for a variety of distribution
streams--high definition and regular broadcast TV, video-on-demand,
satellite, mobile and cellular--much more quickly and
cost-effectively than on older media.
"Before, everything was an ad hoc piece of work," says Jeff
Hargleroad, senior vice president of worldwide product fulfillment at
SPE, "Now we can encode [a program or movie] once and transcode it
many times" based on how it will be used. Transcoding refers to
converting digital files to different formats.
The benefit of that, says Hargleroad, is that Sony can push out four
different versions of, say, Spiderman 2 almost simultaneously. These
might include a video-on-demand version for Viacom's HBO, a high
definition version for Comcast and a regular definition version for
Time Warner's TNT network.
In the not-too-distant future, more movies and TV shows will be
formatted for distribution and viewing on mobile devices.
"Digitizing our catalog was our parent company's desire," says
Hargleroad. "We see this as helping to support our lines of business."
He says that, today, less than 10% of Sony titles are distributed to
broadcasters and cable operators as digital files. That means it has
not yet seen a return on its investment. But, he says, "a year from
now we'll starting feeling" the benefits.
Sony might not be distributing its content digitally at all if it
hadn't begun down this road five years ago. Then, the company decided
to begin the process of digitally remastering its titles and
converting them to digital tape.
"We knew the digital era was upon us, and we needed to be ready for
it, even if we didn't really know what it was," says Hargleroad.
Taking that step, he says, makes it much easier now for the company
to convert titles stored on digital tape (a physical medium) into
digital files, which are distributed on the Internet through
broadband connections.
Though the Internet provides fertile ground for piracy--hackers seem
to find their way around most safeguards--the old process was also
far from secure.
"We'd make a tape for customers and put it in the FedEx. Once it
leaves here we have no control over it. Anyone who opens it can copy
it. With digital files we have security profiles; we can apply
digital rights management and encryption and make sure the title
automatically expires at the end of the contract period," says
Hargleroad.
He describes Sony's effort to remaster its catalog as "aggressive"
and says that "a lot of [entertainment companies] didn't take that
step."
Indeed, it seems to have a jump on at least one company.
NBC Universal, a division of General Electric, just this April named
Deborah Reif as its first president of digital media. She will
oversee the company's digital strategy, including the production and
worldwide delivery of its content to digital platforms.
Sony is working with Ascent Media Group, a division of Liberty Media,
on its digital efforts. Ascent sells creative and technical media
services to entertainment companies. It helps companies of all types
create, manage and distribute their content.
Ascent recommended that SPE work with Hewlett-Packard for the
technology required to pursue its digital agenda. For HP it was quite
a PR coup. At the splashy National Association of Broadcasters (NAB)
conference in Las Vegas earlier this year, HP trumpeted its
partnership with Sony Pictures and Ascent as a "first-of-its-kind
alliance."
HP has indeed been making inroads into Hollywood, providing the
technology to DreamWorks for some of its animated blockbuster films,
such as Shrek and Shrek 2.
All of Sony's new movie and television titles are being digitally
encoded as part of its regular workflow. The library is being
digitized according to market demand. The bottom line, says
Hargleroad, is that Sony wants to license its content in whatever
format people want to consume it.
"Everyone has recognized they need to go in this direction," he says.
"The demand is there, and it's greater than we anticipated."
That may be true, but consider the glacial pace of digital cinema,
which has been talked about since 1999 when George Lucas released his
first Star Wars prequel in digital format. He had hoped that movie
makers would shoot all their films with digital cameras and movie
theaters worldwide would convert their old celluloid projectors to
digital.
Today only about 330 theaters worldwide have high-end digital
equipment, and fewer than 200 major films have been released in
digital format.
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