How do you make digital entertainment more entertaining? A sprawling consortium of Hollywood content providers, consumer electronics companies, and Internet players said on Sept. 12 that its members are planning to develop a standard that will let consumers buy movies and other digital content once and play them almost anywhere, on any type of device, without the onerous restrictions that have hobbled the growth of digital downloads.
The consortium is called the Digital Entertainment Content Ecosystem (DECE). Its members have been working since May to create rules that will let consumers share their purchased content on a number of devices in the home, or stream them over the Internet to laptops, cell phones, or other electronic gear. "No matter where you are in the world, if you previously purchased Spider-Man 3, you should be able to access Spider-Man and stream it," Mitch Singer, the group's president, said in an interview.
The group, which counts Philips Electronics (PHG), Sony (SNE), Toshiba (6502.T), Hewlett-Packard (HPQ), and Cisco Systems (CSCO) among its founding members, is working with all the major Hollywood studios. They want to create a "rights locker," or virtual library where consumers' digital video purchases would be stored, though company executives said they were uncertain how quickly it would be able to create standards and begin offering devices.
This isn't the first attempt to create standards and a set of devices where a consumer is guaranteed interoperability. Microsoft (MSFT) established its PlaysForSure rights scheme for digital music players as an alternative to the iPod ecosystem from Apple (AAPL). But Microsoft's attempt fizzled in 2007 after the software giant created its own Zune music players, which did not adhere to the standard. And consortia such as the Digital Living Network Alliance and Coral have been trying for years to create a framework of minimum technical specifications for devices in the home. Even Intel (INTC), which is joining the new group, flopped with its Viiv brand to get manufacturers and content providers to adhere to a specific set of guidelines.
Apple's growing dominance in the digital world has changed all that. Through its iTunes Store and proprietary FairPlay digital-rights-management software, it lets users download music and videos to five registered devices.
Meantime, sales of DVDs have slowed as consumers opt for the savings offered by movie-subscription services such as Netflix (NFLX) and free streaming sites such as Hulu.com. The new Blu-ray high-definition format has also been slow to take off because of relatively expensive equipment and only modest improvements over existing DVD players.
The new DECE consortium is aimed at boosting sales by giving people more flexibility in how they use their purchases. Consumers would have to register the devices on which they want to play content, similar to Apple's approach with iTunes, but there would be fewer restrictions. "The same buy once, play everywhere attribute: There is no product in the marketplace today that offers it," says Singer.
By working now to create standards that ease consumers' minds about where and how they use their content, providers also hope to minimize the online piracy that has decimated the music market (BusinessWeek.com, 9/12/08). "We don't make money when the content is locked down," says Mark Coblitz, senior vice-president for strategic planning at Comcast (CMCSA). "We make money when consumers want to purchase content, and that only happens if you have compatibility between services and the device."
The consortium plans to design a logo that will be placed on products and Web sites to let consumers know that those products and services are compatible with DECE standards. The first set of standards could be announced in January at the Consumer Electronics Show in Las Vegas.