Microsoft and Netflix made a big splash last year when they teamed up to offer Netflix Instant Access movies through Microsoft's Xbox Live service. This allowed people with an Xbox 360 to steam Netflix movies directly to their television.
Is it now the Wii's turn to offer streaming video?
Curt Marvis, Lionsgate's President of Digital Media, was recently quoted in a Variety interview as saying, "The thing that is clearly a force in digital are the game devices. I think when we see the Wii come into the market with the ability to stream movies, which I think is maybe going to happen as soon as this year, I think that's going to be a big marketplace for digital distribution."
Lionsgate is part of Epix, which is a joint venture by Lionsgate, MGM and Paramount. Epix formed after Showtime decided not to renew their contract with the studios. Originally intended as a new premium movie channel, Epix has run into problems securing a deal with the cable companies.
Epix will launch a subscription-based Internet site to stream movies in the next few months. They also insist that a television channel will come later this year. And from the sound of things, they might be cooking up a deal with Nintendo.
This means Wii owners might just be getting a nice treat later this year, but don't look for the Nintendo Wii to replace your Netflix subscription. Unless Nintendo enters into an agreement with HBO or Starz, the Wii will be limited to movies from Lionsgate, MGM and Paramount. That's a nice selection, but only accounts for about 20% of the movies released each year.
How Streaming Premium Movies Works
Currently, anyone wanting to stream movies on a subscription basis must go through HBO, Starz or the newly formed Epix to secure rights to the movies. Starz currently has a deal with Netflix to stream their Starz Play selection.
After pondering how HBO, Showtime and Starz would survive in a world increasingly turning towards streaming video, I had the opportunity to speak with Eric Becker, Executive Director of Corporate Communications at Starz Entertainment, who shed some light on how HBO, Starz and the newly-formed Epix fits into the picture.
While we may view HBO and Starz as premium cable channels, they are really as much asset managers as anything else. Through exclusive deals signed with the studios, they take control of a movie sometime after its release to video (usually 1-3 months) and retain control for just about the next decade. Right now, HBO has rights to about 40% of the movies released each year, Starz has rights to about 40% and Epix has rights to about 20%.
So, anyone wanting to stream these movies must make a deal with one of these companies, and that deal only gives them the rights to a specific block of movies.
Is the Next Format War a Digital Turf War?
We've had Beta vs VCR and HD-DvD vs Blu-Ray, so is the next big war going to be a digital format war?
In the next few years, we'll see a variety of ways to stream premium movies directly to our television sets. Netflix and Starz already have a deal in place, and we can currently see Netflix movies through our Xbox 360, TiVo and some Blu-Ray players. It sounds like Epix is currently in talks to stream movies through the Nintendo Wii, and HBO has announced a deal with Adobe to create a streaming video site run on Adobe Flash.
The problem? Each of these devices only offers a subset of the premium movies available.
But this might not stay the same for long. Netflix recently put out a poll asking users if they'd pay a $9.99 monthly fee to stream movies from HBO, which would give them access to a huge variety of premium movies for their Watch Instantly service.
If Netflix makes a deal with HBO and a similar deal with Epix, their Instant Access queue could be comparable to the movies available from all of the premium stations on cable.
And that spells good news for us consumers.