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Online casting calls snub Apple

A new Internet movie service joins other Web media services in shunning the Mac, spotlighting the hurdles Apple faces in its plans to dominate digital media.

Hollywood shows its love for Apple Computer in many ways, by routinely featuring Macs in blockbuster movies and by using the PC maker's software to produce cool special effects.
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But the affair doesn't always extend to the Internet, where the studios are busy creating new services that promise to deliver every movie ever made to viewers at the click of a mouse.

Last week, an online movie download service backed by five major studios opened for business, marking one of the industry's biggest moves to date into Internet distribution. Dubbed Movielink, the joint project by MGM Studios, Paramount Pictures, Sony Pictures Entertainment, Universal Studios and Warner Bros. Studios offers a limited selection of those studios' first-run and classic films, including last year's hit "Harry Potter and the Sorcerer's Stone."

Apple Macintosh users will have to wait for a sequel to the initial Movielink service, however, since the service only works on computers running versions of Microsoft's Windows operating system.

"At this time, Movielink has not found a suitable security technology that meets our requirements and is compatible with the Mac environment," said Movielink CEO James Ramo in an e-mail to CNET "During our soft launch period, Movielink will continue to investigate expanding our target market, including possible expansion to the Macintosh platform."

Last week's slight from Hollywood is an embarrassing rebuff for Apple, which has positioned itself as the computer maker of choice for consumers hungry for digital media. For its flagship iMac line, the company took pains to create a fancy flat-panel display--ideal for watching movies, among other activities. It also has a large contingent of early adopters, who likely would be interested in trying out technologies such as video on demand.

This is just the latest example of the challenges facing Apple in its battle to dominate digital media and other niche markets. For years, many developers have ignored Apple users entirely or forced them to wait months for Mac-compatible versions of products, citing its relatively small market share. Macs account for less than 5 percent of total desktop computing sales, according to industry research.

The immediate lack of support for the Mac in the movie industry's first Internet video-on-demand service cuts against the widely held view within Apple that Hollywood is an "Apple town." Many--if not most--production studios use Apple's top-rated QuickTime Final Cut Pro content-creation and video-editing tools, and Apple CEO Steve Jobs is a major Hollywood producer, having founded digital animation studio Pixar, home of the "Toy Story" franchise.

Phil Schiller, Apple's senior vice president of worldwide product marketing, dismissed the Movielink slight, saying it's premature to judge the market for Internet video-on-demand. He also made no apologies for the lack of anticopying controls on the Mac and in its QuickTime digital media format, which the movie service also declined to support.

Schiller said Apple has not released much in the way of protective technology, known as digital rights management (DRM), because effective techniques for securing content without interfering with the experience of consumers have not yet been invented.

"There are some real challenges in DRM," he said. "It's important to protect artists' rights and we want to do that...but no one has been able to make a model that works."

Leader of the pack?
Movielink isn't the only online video service to dis the Mac. CinemaNow, an Internet movie site backed by studio Lion's Gate Entertainment, offers its wares to Windows customers only. In addition, Yahoo's Launch music video service also does not support the Mac, according to a recent test of the site by CNET

Apple clearly covets the market that the movie download service is meant to attract, having recently launched a raft of digital entertainment products and features for the Mac.

The company's iPod portable digital music device was widely credited with jumping out in front of the pack when it was released last year, and its iTunes music file management tool is considered state-of-the-art, if released later than rivals. Apple also first led the way in developing high-speed hookups for moving data between the desktop and other devices with its FireWire-based technology and Wi-Fi-based wireless networking.

But if Apple has sometimes broken new ground, it has also frequently been left on the sidelines in the fast-evolving field of entertainment convergence.

Deep-pocketed competitors such as Microsoft, Hewlett-Packard and Sony have taken the lead in providing a number of digital media features--notably digital TV tuners and video recording--that Apple for now has largely left alone. Sony has long allowed customers to view television programming on some of its PCs, while Microsoft and HP recently unveiled a new system called the Media Center PC that lets people record TV shows.

These companies also often find more commercial success than Apple for technologies that were first championed within the Mac system and are key to making entertainment a seamless experience on the PC.

Although Apple was one of the first to promote Wi-Fi with its "AirPort" wireless networking station, a flood of activity from the PC crowd has overcome its lead. Dell Computer, the world's largest PC retailer, expects Wi-Fi wireless networking capabilities will be standard issue in all of its computer lines by next year, with prices for the feature likely falling below $100 from around $220 currently.

Apple has also fallen behind the PC pack in popular music file-trading software and download subscription services, according to a review of applications currently available to consumers. Of the four top music download services backed by record labels--PressPlay, MusicNet, Listen's Rhapsody and FullAudio--none currently comes in a Mac-compatible version.

As with Internet video-on-demand, these services have signed up relatively small numbers of subscribers as yet. But Mac fans also fare much worse than PC customers when it comes to wildly popular file-swapping software. The defunct Napster service, which counted some 54 million users at it zenith, took 15 months to come up with a Mac-compatible version. Seven months later, a federal judge effectively shut down the service.

An online rendezvous
Some music file-swapping programs to emerge in Napster's wake support Mac, including LimeWire, a popular file-swapping program built on the Gnutella system. But Mac choices for file swapping are severely limited compared to options for the PC. Two of the most popular services--Kazaa and Morpheus--do not support the Mac in their latest versions.

In a move that could partly offset this gap, Apple has introduced into its operating system a technology known as Rendezvous that makes it easy for Macs to automatically discover each other, as well as to discover other devices on a network. Apple has said it will use the technology with its iTunes music software to allow Mac owners to play--but not download--music stored on other people's Macs.

Apple also offers file-trading capabilities through its iChat instant messaging application, which allows users to trade content with friends included in their buddy lists.

Apple spokesman Bill Evans said the company has strong support from developers and expects a broad range of new entertainment applications to be released in the coming months for Mac OS X, the latest version of the operating system.

"We have very strong developer support--the developer community is growing rapidly," he said. "Mac OS X has made it possible for new and incredible applications to come to the platform, and we are delivering innovative applications faster than ever."

Still, some of the biggest digital media developers continue to put the Mac at the back of the line. Laggards on the digital media front include:

• RealNetworks: The company does not offer digital rights management support for its media player in the Mac--a hole that contributed to Movielink's decision to leave Mac users out of the loop in its initial launch this week. It took about a year and half to provide a version of its streaming software for the latest version of OS X. In addition, RealNetworks waited until Oct. 8 before releasing a Mac OS X version for the latest upgrade to its RealOne content aggregation service--a step that came some 10 months after it beefed up the service for Windows users. RealOne, which has signed up some 850,000 subscribers, provides access to exclusive Internet streaming content, including live audio broadcasts of Major League Baseball games.

• MusicMatch: The maker of one of the most popular desktop digital music players recently discontinued the Mac version of its product.

• Microsoft: Like RealNetworks, Microsoft does not offer the Mac copy protection features present in Windows versions of its media player. The software giant has yet to release a Mac-compatible version of its newly upgraded Windows Media 9 technology, and has not yet indicated when it plans to do so.

Better late than too soon
Apple's Schiller said the company is not concerned about losing out on the next generation of digital media services, noting that current industry-approved offerings are barely out of the gate while others are on thin ice legally.

"We don't want to evangelize products that encourage illegal behavior," he said.

Like Napster, those services face lawsuits from the recording industry that threaten to put the fledgling companies behind them out of business.

In addition, the jury is still out on the potential success of industry-backed entertainment ventures such as Movielink, PressPlay and MusicNet, which face uncertain demand and costs. Two early online movie distribution companies, Intertainer and SightSound, have already effectively shut down, and more casualties may well follow.

"Movielink is an interesting experiment, but if you look at what's happening in media today, it's not something that consumers are asking for," Schiller said. "It may be a lot more interesting down the road."

Schiller said Apple is instead putting its efforts into lawful applications that have demonstrated solid demand. Topping that list, he said, are tools for creating content such as home videos, and tools for managing digital files and allowing consumers to play them back on multiple devices around the home. Apple provides industry-leading examples of both, he said.

It is Apple's approach to copy controls, however, that may hold the most significance for the company in the race to own the digital hub.

Although Apple's QuickTime software is widely used as the format of choice for Internet movie promotions--many online movie trailer downloads are released exclusively in the format--the studios are taking a wait-and-see attitude for commercial applications based on the format for now. That's because Apple has so far declined to develop DRM, effectively knocking it out of consideration for studio executives, who fear Internet movie distribution could all-to-easily succumb to piracy.

Apple says it has shied away from DRM for technical reasons, but it is a feature that the entertainment industry won't do without. First-run versions of movies are widely available on file-swapping networks such as Kazaa, highlighting a growing problem for studios accustomed to carefully controlling the launch of new films.

That's handed the advantage in digital media formats for now to companies like Microsoft and RealNetworks. Both have invested heavily in the technology, which is among the first considerations for content companies looking to sell digital media online.

Betting big on MPEG-4
Apple, by contrast, has placed its bets on standard MPEG-4 digital media technology, which for now has no DRM component, although one is in the works.

MPEG-4 is the successor to MPEG-2, standards-based multimedia technology developed by the Moving Picture Experts Group used by digital cable broadcasters and DVD manufacturers, among other things. MPEG-4 is expected to offer better compression for digital video than MPEG-2, opening the door to higher-quality Internet transmissions and wireless video applications. It also includes interactive features that could speed the development of e-commerce applications that allow viewers to click and buy products they see on screen.

Despite the DRM-shaped hole in MPEG-4, Schiller said that he is convinced that the industry will eventually go the standard's route, giving Apple an enormous leg-up when MPEG-4 finally takes hold. QuickTime 6, the latest version of its multimedia technology, is based on the format.

Backing QuickTime 6 is a big bet, given that Microsoft has taken the opposite approach in pushing for adoption of its proprietary Windows Media technology, in large part on the strength of its DRM.

Apple's strategy hinges on timing, according to Richard Doherty, president of research firm Envisioneering, who said Apple CEO Jobs is essentially betting that technology built on the new MPEG-4 standard will take hold before consumers are ready to adopt online video-on-demand and other media offerings in large numbers.

Once that happens, Doherty said, Apple is hoping to reclaim any ground lost to proprietary formats during the technology's incubation phase.

"Jobs thinks Apple will turn around its market share once these MPEG-4 playback utilities get out there," Doherty said.

It's too soon to conclude that most digital entertainment developers will leave Apple on the cutting-room floor. But for consumers who own a Mac, not being able to experiment with the latest entertainment services like Movielink is something of a sore point.

"No smart engineer or analyst wants to bet against Apple--they're just a little frustrated that it's taking Apple so long to stand up and deliver the products," said Doherty. "It's very disappointing to have to turn back to the PC to enjoy popular media."