Video On Demand will take some baby steps toward mass acceptance this month, thanks to SightSound.com. On December 8, the Mt. Lebanon, Pennsylvania-based dot.com that specializes in the delivery of digital video and music programming will begin offering consumers a variety of kids content for download over its site. SightSound will bow with 50 kids titles, ranging from movies, to TV shows, to educational programs-including five Barney titles from Lyrick Studios, the educational series Math Made Easy from Multimedia Tutorial Services, full-length features Puss in Boots and The Littlest Viking from Entertech and several kids arts educational titles from Kultur. SightSound also plans to roll out another 50 titles throughout the month.
Consumers can buy (US$14.95 and up) or rent (US$3.95 to US$5.95) a video from SightSound.com or, where applicable, directly from the rights holder’s site. The video can be played on Microsoft Window’s Media Player plug-in, which consumers can download for free. Once an order has been placed, SightSound encrypts and encodes the video to ensure that the content it sends is not illegally copied or distributed to a territory that conflicts with a rights holder’s existing TV, film or home video distribution agreements.
After a video has been downloaded to the consumer’s hard drive, he or she will have 24 hours (for a one-day rental) in which to watch the movie; however, if the consumer decides to watch it a second time, SightSound’s encryption technology will prevent them from doing so. Though SightSound allows its content files to be distributed via e-mail and electronic file-sharing applications (like Gnutella, for instance), its encryption technology will also prevent new customers from accessing the video without paying.
Depending on a computer’s Internet hook-up, download times for the 200MB to 300MB video files range from 10 to 15 minutes (for a high-speed connection) to 12 to 24 hours (for standard phone lines). Consequently, the service is limited to broadband users. And since as a group, they comprise a tiny percentage of overall consumers on the Net (according to Forrester Research, there are only 5.7 million broadband users in the U.S., though it projects that number to grow to 27 million users by 2003), SightSound recognizes that it’s not about to put land-based video retailers out of business anytime soon.
Jim Miller, executive VP of programming at SightSound, is looking towards the time when TV and the Internet truly converge. ‘We admit we’re probably ahead of consumer demand at this point, but you need to be in order to build these systems up,’ he says.
Miller declined to disclose figures on the number of consumers who had downloaded video from SightSound since it began offering the service in
April `99. SightSound has been busy signing contracts with mostly small-to-medium independent film companies, and earlier this year reached separate distribution agreements with Comedy Central and Miramax. The company’s long-term growth strategy, says Miller, is to partner with as many high-profile entertainment properties as it can, and to leverage the brand awareness into sales. Miller believes kids will also play an important role in helping to popularize the idea of renting a movie on-line-since kids generally spend more time on the Internet than adults, and would not find it that outlandish to watch an entire film on their computer.
For the time being however, the studios that are licensing their content to SightSound see the service more as a low-risk way to be at the forefront of an emerging technology, rather than as a legitimate revenue source. Currently, SightSound, which handles all transactions, splits the revenues it collects on rental and sell-through on a 50/50 basis with its individual rights holders.
‘At this point, it’s an interesting experiment,’ says Ken Locker, senior VP of enterprises and new media at Comedy Central, which signed a deal with SightSound in September to carry six old episodes of its shows South Park and Dr. Katz. In the first six weeks, Comedy Central recorded 1,000 transactions. Most of them were rentals, which works out to US$5,000 to US$6,000. It’s a small sum, Locker says, but he’s confident it will grow as broadband use increases.
For Dallas, Texas-based Lyrick Studios, which achieved some success with its interactive Barney titles, testing the VOD waters with SightSound’s system was a logical next step, says Lyrick CEO Tim Clott.
‘Because we’ve made a pretty aggressive entry into the DVD-ROM market, it made us feel more comfortable about trying to deliver our programming over the Internet to children and their parents. We’re interested in delivering our products to our consumers in as many ways as possible. And this is another way of doing it,’ says Clott.