CinemaNow has become reliant on Microsoft to transmit, protect, and display movies it rents to customers – and Microsoft is a big investor in the company owned by independent studio Lions Gate – but observers believe it symbolizes a thaw between the software giant and Hollywood, likely because piracy fears are overtaking wariness with Microsoft’s reputation for strongarm tactics and aggressive marketing.
“[T]hese days, studios fear digital piracy more than they fear Microsoft and have slowly begun to make deals to use its software tools, albeit on a non-exclusive basis,” said the Associated Press in an August 16 report. “For its part, Microsoft has tried to calm Hollywood's anxiety, revealing a portion of its proprietary code for compressing large media files to a standards-setting group and offering longer-term deals to assuage fears it would hike the price of each new software version.”
The CinemaNow deal may be typical of this new uneasy détente. The AP said Microsoft’s effort to work with Hollywood in the still-young online movie market is showing “limited success” so far, with Microsoft’s MSN beginning last week to link to Blockbuster’s new online rental service and offering a limited volume of pay-per-view films through CinemaNow.
"Microsoft wants to be the sticky stuff in the middle between the studios and all the different platforms consumers will use," said American Technology Research analyst P.J. McNealy to the AP. "They have the chance to really enable business models that we have heard about over the past five years."
