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Digital video starts small, thinks big

Technology companies, struggling to convince big film studios to switch to digital video, are trying their services out on cash-strapped independent moviemakers.

Digital video providers and entertainment companies are courting cash-strapped independent filmmakers as testing grounds for new technology and services.

Microsoft this week announced that the movie festival Slamdunk, held this week in Cannes, France, has picked its upcoming video streaming platform to screen entries. The independent festival's producers will roll films using Microsoft's video encoding and decoding technology, called Corona, which has not yet been released publicly.

Earlier this month, video delivery company On2 Technologies showcased an independent feature film using its new technology for compression and decompression, called VP5, which it says delivers faster, higher-quality streams over the Net. The company also promotes an earlier version of its technology, VP3, to independent filmmakers because the open-source codec is less expensive.

The moves come as moviemakers large and small are increasingly shooting pictures in digital video. The technology allows video to be stored, changed and delivered electronically, and many filmmakers expect that long-term it will help them cut production costs.

Shifting the entire industry to digital has some heavy upfront costs, however. For example, major movie studio Lucasfilm made the latest "Star Wars" prequel entirely digital. But of all the theaters around the country showing the film, only a small number have installed costly digital delivery systems. Lucasfilm had to send reels to other theaters using older, more expensive methods.

In addition, some major film studios fear digital distribution could open their films to piracy. Analysts say that because these issues may make it difficult for technology companies to form partnerships with the big players, technology companies may see independent filmmakers as low-hanging fruit.

"Independent filmmakers are the most aggressive with alternative distribution channels," said PJ McNealy, research director for GartnerG2, a division of research firm Gartner. "You're seeing the same thing on the music front. (Struggling) artists are just faster and more adept at experimenting with new distribution models than the major music or movie studios.

"Telco service providers love it too because it helps transform your Internet access from a data source to an entertainment source."

A range of technology companies are jockeying for a position in the digital video world. For example, game maker Nintendo and entertainment production company Hypnotic introduced a short-film contest centering on Nintendo's GameCube late last year. Web surfers can vote for the winner, which will be announced before July 4. The winner will receive $20,000 and will be entered in a major film festival.

In April, entertainment video-on-demand service Intertainer introduced a new film distribution program for first-time moviemakers. Called Film Marketplace, the service lets filmmakers submit a movie short or feature film, paying only a flat fee for storage, encoding and streaming costs. Movie owners can set the price of the film and take in all the profits generated from its distribution. The films are played on Microsoft's Windows Media Player.

Intertainer said it has had several submissions for the service and plans to formally launch it later this summer.

Microsoft Windows Media Division has been an aggressive suitor to the independent film community. It is an official technology sponsor of the Slamdunk festival, going on from May 15 to May 26, and its earlier technology, Windows Media 8, was used for the Slamdunk in January.

Apple Computer's QuickTime is also used by the independent film community. The company offers a suite of professional video-editing tools that are popular with small moviemakers.