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Beyond Day and Date DVD Release: Reversing the Release Windows Print E-mail

SCOTTSDALE, Ariz., October 8, 2008— Warner Bros. Entertainment recently decided to release movies on-line before releasing them on DVD… at least in South Korea.  This reverses the long-established Hollywood distribution model and may open the door to a major increase in movie downloads.  How long until this becomes the norm in North America?

Film piracy is rampant in South Korea.  Arguably, Warner Bros has little to lose by releasing their films online first, before they hit the video stores.  However, they have much to gain if they can find a scenario that limits piracy.   We view Warner Bros actions in South Korea as an experiment, where high broadband data rates and penetration points represents where the US market will be in 3-5 years. 

First, online film distribution is arguably more secure than DVD.  The CSS digital rights management (DRM) technology that protects consumer DVD is already compromised.  Consumers worldwide can readily obtain free software that strips the CSS protection and makes digital copies.  For professional pirates, there might as well be no DRM at all.  Conditional access (CA) and DRM solutions that protect online distribution are more modern and most importantly, renewable.  This means if the security is compromised, it can be “renewed” again to re-secure the content. 

Second, new technology, such as digital transactional watermarking, can enable better tracking of illegally copied films.  Transactional watermarks, also referred to as forensic or serialized watermarking, embed information specific to a particular transaction into a digital watermark.  Thus, the watermark is embedded into the premium video as it is delivered to the consumer.  If copyrighted content is subsequently illegally distributed, the transactional watermark enables the infringing content to be tracked back to the source for prosecution.  This not only enables enforcement, but the publicity is intended to act as a deterrent to copyright infringement.

The system is not fool-proof, but it does not necessarily need to be.  No DRM or CA system is pirate-proof, but at least this scenario slows down the pirates.  The longer a title can be protected before it becomes widely available (even measured in days or weeks), the more potential revenue from legitimate rental and sell through.  Moving the more secure online system earlier in the release window simply keeps the “free” content out of the public domain that much longer.

Clearly, MultiMedia Intelligence sees Warner Bros. initiative in Korea as being the start of a trend in implementing early release window content online.  Already television studios are experimenting with online distribution windows that precede TV broadcasts.  It is only a matter of time before we see other content producers embrace Warner Bros. initiative and see the initiative extend to other markets such as North America and Europe. 

The key enabling technologies are next-generation renewable DRM and the ability to encode watermarks into the content in real time.  Digital Watermarking and fingerprinting are important content identification technologies that are enabling applications that are positioned to pass US$500 million worldwide by 2012. 

This MultiMedia Intelligence brief is based on our market research report, "Beyond Traditional DRM: Moving to Digital Watermarking & Fingerprinting in Media Monetization."  The report provides research, analysis and forecasts for key fingerprinting and digital watermarking applications and technologies, including transactional watermarking in set-top boxes. It also identifies key media and DRM trends that are aligning to drive demand for fingerprinting and watermarking. The report includes forecasts and assessments of the digital media ecosystem, the digital watermarking and fingerprinting value chain, and the key segments and players in each application segment.

MultiMedia Intelligence also has additional related research on DRM, content piracy and Peer-to-Peer media distribution.


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Rick Sizemore

(480) 213-4151

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 About Multimedia Intelligence- MultiMedia Intelligence, a market research and consultancy firm, specializes on the markets and technologies for delivering and monetizing digital content and services across multiple platforms. We look beyond the classic 'three screens,' which include TVs, mobile handsets, and computers. We put markets into the broader context of the industry ecosystems that are converging and changing traditional business models. 

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