HBO likely to clear way for cloud video, UltraViolet

HBO often obtains exclusive rights to electronically distribute movies that appear on the premium channel, but it's expected to soon agree to relax the blackout requirements.

LOS ANGELES--HBO won't stand in the way of cloud video or UltraViolet, the name given to technology standards that the film industry hopes will become a new home video format and a successor to the DVD, say multiple sources.

NBC Universal, which runs Universal Studios, is one of the major Hollywood film companies that gives HBO exclusive electronic-distribution rights. Greg Sandoval/CNET

If you've ever wondered why some movies disappear from the video services of Apple, Amazon, and Netflix, the likely reason is the HBO blackout. When a new release is aired on HBO, often the company has acquired the exclusive right to distribute the movie electronically. That means the title must come down at other outlets, including Web stores. HBO has this kind of blackout agreement with three of the top six major film studios: Warner Bros., 20th Century Fox, and NBC Universal.

But HBO is expected to soon agree to relax the blackout requirements, according to multiple film industry insiders. This is good news for the film studios. Without the cooperation of HBO and parent company Time Warner, the studios' plans to create new cloud video services and reignite movie sales would be severely hobbled.

An HBO representative did not respond to an interview request.

DVD sales are sliding and the studios want to create a new format that they hope will entice consumers to buy and collect movies again. The studios want Web content to offer as much freedom as movie discs. They want consumers to have confidence that whatever video they download or stream, it will play on any player. The UltraViolet standards were created by a consortium of entertainment, software, and hardware companies, along with several online and offline retailers.

Another way UltraViolet's backers want to make collecting movie downloads more appealing is by offering them digital shelves to store them on. UltraViolet's standards will enable consumers to store their digital media on the servers of third-party service providers and play the media even if they decide to hop to another service. The film sector's interoperability plan has received high marks from many tech pundits and analysts.

The real hero for the studios could be Time Warner. HBO's agreements posed a significant obstacle to the studios' UltraViolet plans. Conceivably, a person could buy a movie, store it in their digital locker, and then be blocked from accessing it during HBO's blackout period. The studios recognized that this was a non-starter and began negotiating.

The talks with Time Warner and HBO have gone well, the sources said. They expect Time Warner to agree to make an exception for cloud services sometime by the summer, in time for UltraViolet's launch. This will then allowing people to access their cloud content during the blackouts.

Time Warner CEO Jeff Bewkes mentioned UltraViolet during an earnings call last month, according to M&E Daily. He said that all theatrical new releases from Warner Bros. would be UltraViolet enabled.

"If the industry executes it right," Bewkes said, "[UltraViolet] should dramatically boost the appeal of owning movies."

 

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