The MPAA’s Motive In Upsetting Exhibitors Over Release Windows

By | November 9, 2009 12:52 am PST

Last Thursday when the Motion Picture Association of America made public an ex parte communication they sent to the FCC in defense of a waiver request it caused a flurry of headlines about studios going to war with exhibitors over release windows. To be sure, the letter sent by the MPAA’s lawyers, as well as the press release they sent out the same day directly refer to release windows. The headline of the press release boldly reads “MPAA Seeks FCC Okay For Transmission of First Run Movies Directly To Consumers”. However the MPAA may simply be hiding behind the concept of protecting content during shortened release windows as camouflage for their true motive; securing high definition digital content as it is distributed into the electronic ether of the home by controlling which devices can playback and display the content.

The MPAA’s letter was sent as a rebuttal to a communication sent to the FCC in October by Public Knowledge arguing the waiver not be granted. PK (as they are often referred to) is based in Washington D.C. and considers and is a public interest group that focuses its efforts on digital technology. The second paragraph of the MPAA’s letter and third paragraph of the press release reads in part:

As MPAA has detailed throughout this proceeding, grant of the waiver would for the first time allow millions of consumers to view high-value, high-definition theatrical films during an early release window that is not available today. MPAA has explained that release of this high-value content as part of an earlier window, especially with respect to movies released for home viewing close to or even during their initial theatrical run, necessarily requires the highest level of protection possible through use of SOC.

Ignoring the reference to SOC for the time being (I’ll get to it in a bit), one can see how the phrase “close to or even during their initial theatrical run” might make motion picture exhibitors angry enough to storm MPAA headquarters. It didn’t help that outgoing MPAA Chairman and CEO Dan Glickman is quoted in the press release saying:

“Many of us love movies, but we just can’t make it to the theater as often as we’d like. That is especially true for parents of young children, rural Americans who live far from the multiplex and people with disabilities that keep them close to home. Having the added option to enjoy movies in a more timely fashion at home would be a liberating new choice.”

At face value it seems as if the MPAA is really interested in getting this FCC waiver pushed through so that they can simultaneously release films in theatres as well as on DVD and video-on-demand. Thus, it is understandable that John Fithian, the president of the National Association of Theatre Owners, countered with his quote in the Los Angeles Times:

“We don’t argue against the use of anti-piracy technology if movies were to go to the home earlier. But they [the MPAA] aren’t telling the FCC or anyone else how early they want to go, so there’s no way of telling what the impact is on the cinema industry and our consumers.”

Fithian is spot on, for other than the “initial theatrical run” verbiage the MPAA never really puts a time frame around the “early release window” they refer to. Reading between the lines of both the MPAA’s letter and their press release it would seem as if part of their goal is to move up the VOD window allowing satellite and cable companies to offer films day-and-date with their DVD release. Right now there is roughly a 30 day delay between a movie’s DVD release and it’s availability on VOD. The MPAA implies that should the FCC grant the waiver then the industry would afforded the opportunity to offer exciting new innovations to consumers. PK isn’t buying the MPAA’s plea, and instead suggests the studios should just renegotiation their agreements with Multichannel Video Programming Distributors (satellite and cable providers) since they are the ones controlling release windows in the first place:

The MPAA’s members can provide this “new service” without the waiver. Grant of the waiver will not protect content from illegal copying, as illegal copies are available well before the proposed shortened window. Further, to the extent there is any value in encouraging the MPAA to make content available to those unable to get to the movie theater, the content is already available from DVD rental services. Grant of the waiver will not “level the playing field” between NETFLIX and MVPDs, as 25 million television viewers would need to purchase new equipment to benefit from the “new service” offered by the waiver.

As the MPAA’s response and press release adeptly point out in a well written and composed manner, PK’s whole argument is seriously flawed. Though poorly expressed, the principle behind PK’s stance very well may point to the real reason the MPAA is requesting the waiver.

In 2003 the studios unsuccessfully tried to plug “the analog hole” on the back of audio visual equipment, be it DVD players, DVRs or set top cable boxes. you see, while content on a DVD or streaming over a cable may be encrypted, it is decrypted during playback and can be sent through analog ports. Turn the back of your DVD player around and you’ll likely see red, white and yellow RCA jacks, all of which are analog outputs. Duplicate copies of content can be made directly through these analog outputs and that is what the studios are afraid. Unfortunately for them, the FCC ruled that a signal should not be transmitted through only one output. Meaning, a DVD player or a set top box couldn’t output content to a television solely through the HDMI port, it would also have to pass the content through the analog ports as well.

What the MPAA is asking for now on behalf of the studios for whom they lobby is the option to use what is called Selectable Output Control, or SOC (told you I’d explain that acronym). What SOC would allow is for a signal to be transmitted over a single output. The output the studios want to use is HDMI, because it comes with High Definition Copy Protection that keeps the content encrypted all the way to the television or monitor. (Similar to the way a digital cinema server and digital cinema projector are connected through Cinelink). SOC would also allow the studios to prevent content that is transmitted into the home from being captured on a DVR.

The problem PK sees with SOC and does not do a very good job of presenting, is that consumers usually have mix and match electronic components in their home. While their brand new cable box might have an HDMI output their television may not. So when they go to order a VOD movie and it doesn’t playback on their television set a consumer may be confused and possibly upset when they find out they don’t have the proper equipment. PK argues everyone will have to go out and get brand new equipment to enjoy any new service made available through SOC. This is not technologically untrue, but the MPAA does a good job of smacking down this concern in their correspondence:

By Public Knowledge’s odd reckoning, however, no consumer-oriented technological breakthrough ever could be introduced to American homes unless and until every single American home had access to the same opportunity at the same moment in time. That is a recipe for holding every innovation hostage until the last consumer adopts a new technology.

So, what does all this have to do with motion picture theatrical release windows? Little to nothing, but by focusing their argument on wanting to provide their content to rural consumers or parents of toddlers, the MPAA is able to appear socially conscious while hiding their true objective. Keep in mind, rural broadband initiatives are a large part of the current economic stimulus package.

Make no mistake however, if studios could get away with releasing certain movies on DVD and VOD day-and-date with their theatrical release they probably would. Just ask Disney CEO Bob Iger who has alluded to the notion numerous times. And it probably won’t be long before such a simultaneous release occurs, but it likely won’t become routine very quickly. Instead, this whole to-do over the MPAA seeking an FCC waiver is the studio’s effort to get something they were previously denied. Few in the media picked up on it other than a few online outlets including David Poland, who may have put it best in his Movie City News column:

I don’t think SOC and the excuses MPAA is making for wanting it to be allowed by the FCC have much at all to do with narrowing the theatrical release window. Nor is it about NetFlix. It is about getting firm control on the electronic post-theatrical universe that is filled with potholes, which include piracy, but are not exclusive to piracy by any means.

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