Two major high-def streaming providers become partners

While Blu-ray and HD DVD have missed their window of opportunity for resolving the high-def format dilemma, CES 2008 could see two of the biggest names in the high-def streaming field demonstrating a realistic, connected alternative.

The alternative vehicle for high definition movies on home consoles -- if there is ever to be one -- is the streaming, on-demand, programmable network. Today that vehicle could be a big step closer to reality, and just in time for next week's CES, with an agreement between two services to forge one service: CinemaNow's streaming movie download service will soon feature Macrovision's platform technology.

Since the summer of 2006, CinemaNow has tried to operate a fledgling streaming movie service pretty much on its own, in competition with Netflix and Movielink (now part of Blockbuster), both of which already use the Macrovision platform. Last year, CinemaNow became embroiled in a tangle with the DVD Copy Control Association, which attempted to enact a provision in its new license that would prohibit any kind of licensed copy of a DVD. CinemaNow's value proposition is based on the customer's ability to burn and own what he downloads, though up until now, only a fraction of its movies could be legally burned.

But the DVD CCA's attempt to prohibit that provision failed, due in large part to an agreement between the association and Kaleidescape, a company whose idea was to provide jukebox-like kiosks for customers to buy, burn, and own legal DVDs. CinemaNow benefitted from that agreement by being able to legally provide one of the key payoffs of its original value proposition, leading to a software partnership with Roxio parent Sonic Solutions.

With Blockbuster in financial trouble, and with Macrovision's unprecedented move to take control of Gemstar, the company that publishes TV Guide, the pact announced today could be seen as the true launch of a very viable brand in the streaming field. Macrovision has dabbled with the idea of its own download service itself, but earlier this year chose to focus its efforts on moving set-top boxes with its protection technology into more households. The Gemstar purchase gives Macrovision the leading brand in the scheduling department of its big picture, and now the CinemaNow partnership could give it the last piece of the puzzle for a truly completed streaming platform.

The challenge now for Macrovision is to implement the managed copy provisions -- the way for consumers to make limited numbers of licensed copies of their videos that they can own permanently -- that continue to weigh down progress in the blue-laser market two years after the formal introduction of its two formats. With a court now mandating that the DVD CCA cannot legally prevent licensed copying, CinemaNow and Macrovision are at least somewhat protected by a legal firewall.

And with Sonic on their side, they may be able -- as the two companies indicated in a statement this morning -- to implement a service that legally and technologically enables downloading of high-definition content on-demand to a hard drive, and then burning that content from a hard drive to disc either from a PC or dedicated console. Again, this is where China comes in. If it decides to let its manufacturers sell CH-DVD blue-laser burners in the US, that country could effectively cut off HD DVD's and Blu-ray's last toehold on the future of the high-def market: the likelihood of one or both formats becoming widely implemented in DV-Rs.