The Wall Street Journal – Bruce Orwall
04/18/2000
Walt Disney Co.’s Miramax Films unit is making its first foray into online film distribution via a new agreement with Web company SightSound.com to make 12 Miramax films available online for downloading on a computer.
Miramax and other big film concerns have taken a slow approach to the Web as a film-distribution outlet, even as tiny, independent concerns have raced to find ways to use the Internet for showing their films. The studios’ caution stems from a variety of reasons, with the potential for piracy at the top of the list.
Now, Miramax has made a deal with SightSound.com, of Mount Lebanon, Pa., that will make a dozen titles available on a pay-per-view basis. The nonexclusive deal will allow Web users to download the film for viewing during a specific time period, probably a day, after which the movie will be disabled.
Bob Osher, co-president of production at Miramax, said the company is “trying to find another way to exploit our copyrights.” He added: “The main thing for us is being very cautious to make sure that our copyrights are not stolen. We’re relying on SightSound’s technology to protect our rights.”
SightSound.com President and Chief Executive Scott Sander vowed the films will be adequately encrypted and encoded to block pirates. He said SightSound.com has developed a filter that will allow only users in the U.S. to download the films. That is important because Miramax frequently doesn’t own distribution rights to its films outside of the U.S.
“What SightSound.com has built is capable of handling substantial demand, with encryption and digital-rights management,” Mr. Sander said. SightSound.com is negotiating with other big studios to make similar deals. “We built a system that works the way the consumer wants it to work and also has the controls that work the way the studios want it to work,” he said.
Mr. Sander said the 12 titles haven’t been determined, nor has a date when they will be available. The rental price also hasn’t been determined and could vary from film to film. SightSound.com charges about $2.95 a film for the independent titles it offers at its SightSound.com Web site. SightSound.com owns distribution rights to several hundred films.
Viewers won’t find the Miramax films on SightSound.com’s site. Instead, the films will be available only through Miramax’s Web sites -either the company site or sites devoted solely to each film.
Miramax will retain a majority of the revenue generated under the arrangement, though Mr. Sander didn’t disclose how the companies will split revenue. In the past, SightSound.com’s share of the revenue generated by films on its own Web site has ranged from 30% to 50%.