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CinemaNow Case Study


Cinema Now Independent film producer uses Microsoft Windows Media® to develop an advanced e-commerce application for secure Internet film distribution and sales.



Case Study Contents Summary
CinemaNow, an online distributor of feature-length films, needed an application which would guarantee the security of its digital content while running its e-commerce Web site. CinemaNow solved this challenge by developing PatchBay, an end-to- end online media management solution based on the Microsoft Windows platform.

Microsoft products helped CinemaNow in four vital areas: film digitization, film distribution, Web interface design, and commerce site management. CinemaNow used Microsoft’s Windows Media Encoder to format high-quality digital files of its films. It relied on Windows Media Digital Rights Management to protect against piracy while regulating complex licensing issues. The company harnessed the refined integration of Windows Media (especially Windows Media Player and Software Development Kit) with Microsoft’s Internet Explorer to created an attractive and user-friendly browser interface for its retail site. And it tapped Windows server technology (Internet Information Services 5 with Windows 2000 Advanced Server) to run its Web site and sales fulfillment.

With Windows Media at its core, PatchBay addressed many of the security and management hurdles in online film distribution. PatchBay helped CinemaNow concentrate on making money from its digitized media rather than worrying about pirated product or becoming encumbered in complex licensing management tasks. PatchBay has proved such a success for CinemaNow that the company has begun licensing the application to other companies for managing the distribution of their own digital media inventories.

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Company Overview
CinemaNow is an Internet film distribution company majority-owned by Lions Gate Entertainment, one of the largest independent feature film producers in the United States. CinemaNow owns the exclusive Internet rights to over 1,200 feature-length movies, which it offers on-demand in streamed and downloadable files. Consumers can view the films for free (advertising supported), pay-per-view, and by subscription. Consumers have a choice

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Solutions Overview
Customer Profile
CinemaNow provides free and on-demand pay access to 1,200 films for streaming and downloading.

Business Situation
CinemaNow needed an application for managing the complicated licensing rights to the films which it distributed online. It also needed to provide its customers with the highest quality digital images possible while safeguarding against piracy. All of these features had to run in a user-friendly interface for high customer satisfaction.

Solution
CinemaNow turned to Windows Media—particularly Windows Media Rights Manager--and the Windows family of products to develop its Web site. Specifically, it created PatchBay, a complete solution for tracking, publishing, syndicating, and monetizing film and video content on the Internet. It let CinemaNow focus on selling its products rather than on worrying about licensing issues or piracy.

Software
Microsoft Windows Media:
  • Windows Media Player v. 7.1
  • Windows Media Rights Manager v. 7
  • Windows Media Encoder Utility
  • Windows Media Audio and Video codecs v. 8
  • Windows Media Player 7.1 SDK

    Microsoft Windows Enterprise Products:
  • SQL Server 2000 Enterprise Edition database
  • Windows 2000 Advanced Server
  • Internet Information Services 5

    Other software:
  • Digital Envoy’s NetAcuity

    Other Partners
  • VeriSign
  • of four streaming rates, ranging from 56 kbps to 700 kbps. The Marina del Rey, Calif., company now has over 550,000 registered users, and more than one million users watch over two million streams of video each month from CinemaNow.com.

    Trimark Pictures originally started CinemaNow in early 1999 when initial explorations of online film distribution showed that consumers had a strong interest in such services, said Brad Serling, chief technology officer for CinemaNow. Lions Gate Entertainment bought Trimark in October 2000.

    CinemaNow’s film inventory includes movies from Lions Gate, Trimark, Tai Seng Home Video (martial arts distributor), Salvation Films, and Allied Artists. Many leading entertainment Web sites distribute content from CinemaNow, including Yahoo Broadcast, Hollywood.com, and NetBroadcaster.com.

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    Business Challenge
    When CinemaNow started its Web site in 1999, it needed a dependable application for managing the sale of its movies to its global customer base without making the process onerous for users or the company. Unfortunately, CinemaNow discovered that no software vendor had created an application for handling all aspects of secure media distribution and licensing management. In order to reach its business goal of profitably distributing its films online, CinemaNow had to create its own application for processing Internet-based digital media sales.

    The quality of the user experience was CinemaNow’s first concern. Bandwidth constraints over the Internet limit the quality of streamed media, but the company wanted to take every possible measure to ensure the most satisfying user experience. Without quality video streams, CinemaNow would have had difficulty convincing customers to pay for its products.

    CinemaNow also needed a mechanism for managing the complex licensing agreements associated with each film. A filmmaker can sell dozens of different distribution rights to its movies because each stage in the life of a film (theatrical release, home video, syndication, etc.) can have its own licensing agreements. To further complicate matters, these rights are sold territory-by-territory, with major regions of the world, with each representing separate licensing jurisdictions. As a result, every film in PatchBay’s inventory has dozens of licensing agreements regulating its use. Any inadvertent violation of these agreements could have caused legal problems for the company.

    "Licensing gets very complicated very quickly," Serling noted.

    As part of its licensing challenges, the company wanted to fully safeguard any of its streamed or downloaded movies from piracy, assuring that only authorized customers could use the films according to licensing restrictions.

    "Security is the number one issue why Hollywood hasn’t jumped into online film distribution," Serling said. "The purpose of PatchBay is to prove to Hollywood that online film sales can be done safely."

    Finally, CinemaNow needed to integrate its films and their associated licensing agreements into an easy-to-use Web site with full e-commerce functionality capable of handling surges in the use of resource intensive digital media. The company wanted to shield its customers from the complexities of film distribution so they could find a movie, pay for it, and view it as simply and quickly as possible.

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    Solution
    CinemaNow solved its digital media distribution challenges with PatchBay, an application it developed in-house using Microsoft Windows Media and Microsoft e-commerce technologies. CinemaNow coupled Windows Media with Microsoft’s Windows 2000 Advanced Server and Internet Information Services 5 to run its media commerce site.

    Creating the Content
    CinemaNow exclusively used the Windows Media Encoding utility to convert its movies into digital files ready for the Internet. Serling said Windows Media offered "stupendous" digital quality, thanks to Microsoft’s industry-leading codec technology, Windows Media video codec (Codecs—derived from the words "compression" and "decompression"--are the software modules that compress and decompress audio and video files.) Once CinemaNow formatted the files, it used Windows Media Rights Manager to "wrap" a layer of encryption around the media files. The media files sit on the Windows 2000 Advanced Server. Keys to accessing the files are stored separately.

    Securing the Content Customers wishing to download or view a film had to first pass through PatchBay’s Media Delivery Rules engine, a Microsoft SQL Server™ 2000 Enterprise Edition database which housed all licensing information associated with each movie available at the Web site, as well as customer access rights information--Has the user paid to view the film? Once the database determined the customer may view an item, it then passed permission to Windows Media Rights Manager to provide the customer’s computer with a key to view the encrypted file.

    CinemaNow used Digital Envoy’s NetAcuity application to aid in its Media Delivery Rules engine. NetAcuity had patented technology for determining the geographical location of a user with 99 percent accuracy. This software was necessary for PatchBay to address territorial licensing rights. To avoid problems, NetAcuity determined the location of a user upon entering the site. It then prompted PatchBay to offer for sale or viewing only those films available for that customer’s licensing region.

    The Windows Media Digital Rights Manager checked each time a file was played to see if the user still had permission to view the file. The Rights Manager let CinemaNow control the start times, stop times, and duration of a license to offer various pay-per-view and subscription sales models.

    "We tackled every issue of film copyright and digital distribution," Serling said.

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    Collecting Payment
    CinemaNow built PatchBay using Microsoft’s Visual Basic development system and integrated it with the Web site and its various modules using COM objects. PatchBay and other Web site functions ran on top of Microsoft’s Internet Information Services, which resided in a Windows 2000 Advanced Server. The SQL Server 2000 database not only housed all Media Delivery Rules information but also all customer metadata and other Web site information. CinemaNow used VeriSign to qualify credit card payments, the only payment method offered at the site.

    Playing the Content
    CinemaNow embedded a version of Windows Media Player v. 8 into its Web site browser for easier customer viewing and better control of the user experience. Thanks to the flexibility of Microsoft’s Windows Media Player, its Windows Media SDK, and Internet Explorer, CinemaNow customized the player to maintain the look-and-feel of its Web site while adding convenient features. For example, it created its own viewer controls ("play," "fast-forward," "pause," etc.) using Macromedia’s Flash plug-in, which easily integrated into the player without a glitch, Serling reported. CinemaNow was also able to build in other advanced features, such as a bookmark function, which let customers stop a film and return to the same place in the film when they return to the site to continue viewing the movie.

    The company also took advantage of eXtensible Markup Language (XML) to maintain control of its content used by affiliate Web sites like Hollywood.com and WindowsMedia.com. PatchBay generated XML feeds for its affiliates by pulling data from the SQL Server 2000 database and populating XML templates for content metadata and availability.

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    Business Benefits
    Windows Media combined with Microsoft’s e-commerce tools helped CinemaNow create an attractive, user-friendly Web site which made possible secure and revenue-generating digital media distribution.

    Quality
    The digital movie files created by Microsoft codec technology assured CinemaNow that it offered its customers the best possible viewing experience, helping build satisfaction and future sales.

    Security
    At the same time, Windows Media Digital Rights Management helped CinemaNow prevent the loss of valuable content to piracy. It also made it easier for CinemaNow to create a variety of payment and licensing offers, helping generate further revenue.

    Flexibility
    Serling noted the flexible browser integration capabilities of Windows Media Player and the Windows Media SDK let CinemaNow design an interface that shielded customers from the complicated logistics of licensing, making the purchase of digital films online no more taxing to customers than purchasing a book at a Web site. By customizing the look of the player and creating additional functionality, CinemaNow increased user satisfaction.

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    Scalability
    Also, Microsoft’s Internet Information Services kept the CinemaNow Web site running smoothly while the Windows 2000 Advanced Server handled all processing efficiently and dependably, again helping boost customer satisfaction, Serling said. He added that Microsoft’s Windows 2000 Server and Windows Media components had proven robust, handling as much as 2.5 million media streams a month.

    PatchBay also helped CinemaNow become a more efficient partner for other Web sites that used CinemaNow’s content. By creating XML feeds between its PatchBay application and its partner’s Web servers, CinemaNow can remotely monitor the downloads and streaming activity of its partners’ sites. The XML feeds combined with Windows Media Digital Rights Manager assured CinemaNow that it would not lose control of its content no matter where or how it was distributed.

    Future
    PatchBay proved such a success at running CinemaNow’s digital media commerce site that the company decided to offer licenses for its use to other organizations --a promising source of additional revenues. CinemaNow is in active negotiations with several other content owners and technology companies in the United States and abroad.

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