Exclusivity pacts with HBO are complicating efforts to create a “digital rights locker” for consumers
Exclusive output deals between HBO and three major Hollywood studios stand as major obstacles to a robust movie-dowload business, holding back a potentially lucrative distribution channel and creating conflict between the powerhouse divisions of TimeWarner — HBO and Warner Bros. — who for once find their interests at odds.
HBO’s output agreements with Warners, Fox and Universal prohibit download sales while top new releases play on the premium cable channel — effectively blocking efforts to grow the digital movie marketplace, a high-ranking official at Sony told TheWrap, speaking on the condition of anonymity.
Privately, officials for both studios and the cable network say they’re confident that ongoing negotiations will resolve the impasse. One will certainly have to be found for the movie download business to grow.
Though downloads currently make up only 3 percent of the home-entertainment pie, studios are aggressively looking to grow into an area that they, like the music industry, had long held at arm’s length.
Indeed, Sony — which has no pact with HBO — is tied to a consumer electronics company that has also committed itself to a digital future, and has emerged as an early leader in the establishment of movie downloads.
In 2008, the company seeded an initiative that would create an easy-to-access online movie and TV market for consumers — what it sees as an alternative to Apple’s iTunes, which studios fear could become as powerful and monopolistic in the realm of movie distribution as it has with online music sales.
Called the Digital Entertainment Content Ecosystem, it includes 48 entertainment, software, hardware, retail, infrastructure and delivery companies — as well as Fox, Universal and Warner.