Tony Keily looks at the more global significance of the ongoing controversy surrounding the release of new films to mobile phones in Italy.

Eagle turns chicken
Last year a significant experiment took place in Italy: The mobile operator H3G – also known simply as 3, and owned by the Asian Hutchinson Wampoa Group – bought wireless rights to 25 titles from the Eagle Pictures slate. The deal was that the wireless mobile release would come ten days after the theatrical release and last for some sixty days. This immediately and predictably caused war, with Italian exhibitors boycotting Eagle Pictures title The Interpreter, and with Roberto Benigni acting as their cover boy. The experiment infringed a basic right of film distribution: the exclusive theatrical 'window' of about 100 days, prior to release through other media. This window had been much larger in the days of VHS but, amid alarm over declining Box Office, exhibitors have had to see their window shrink. The obvious danger in Italy was that if the window were simply to be smashed, even by so small a missile as wireless rights, that would be the end. You can throw as many stones as you like through a broken window, and exhibitors rightly saw the phone challenge as just a step away from a cross-media simultaneous release.

Prior to the theatrical release of Memoirs of a Geisha at the end of December 2005 – with a mobile launch set for ten days later – Italian exhibitors promised to repeat their boycott. Faced with this threat, Eagle Pictures about-turned and assured its cinema clients that there would be no early wireless release and the 100-day window would be left intact. This was odd given that H3G was busy advertising to the contrary, but much stranger was the subsequent statement by the distributor that it couldn't have sold the mobile rights to the title to H3G since it didn't own them in the first place. H3G promptly filed court action and had upheld its right to a wireless release of both Memoirs and Terence Malick's The New World. In the event the boycott didn' t go ahead.

Now, two months later, the window is under attack again, this time from the inside, not by Asian mobile invaders, but by one of the best-known names in Italian cinema: Aurelio De Laurentiis, chairman no less of Anica, the distributors' representative body. De Laurentiis is both a producer and a distributor. His 2005 Christmas comedy hit Natale a Miami (Christmas in Miami) went out on a massive release and filled cinemas across Italy with screeching teenagers to beat off all foreign competition at the Yuletide holiday Box Office. He was the hero of exhibitors nationally after a disappointing year until he decided to go out on video only 60 days after the cinema release. De Laurentiis has his own good reasons: who wants to buy a Christmas DVD at Easter? But it now seems the man wants to repeat the early DVD release strategy for the Carlo Verdone comedy vehicle Il mio meglio nemico (My Best Enemy – unlikely echoes of Herzog!), due for cinema release on March 10. Battle-weary exhibitors are once again threatening boycott, but it remains to be seen whether they can forego what seems likely to be another homegrown comedy hit.

Although exhibitors have always insisted – and continue to insist – that fear of piracy is the main reason for their opposition to early electronic media releases, a more plausible motive for the tenacity of their defense is fear of competition. Indeed Gianluigi della Casa, head of the Agis association representing multiplexes, has recently (and unusually candidly) claimed that simultaneous cross-media releasing would cut cinema takings by 40-50%, without generating additional revenues overall.

Fever in my pocket
The De Laurentiis move is significant because in the end it will be the distributors who decide exhibitors' immediate (but not ultimate) fate. In Italy representatives of the Majors' cinema releasing arms in the main reassured their cinema exhibitors through the December round of the H3G controversy. Paul Zonderland, CEO of Disney's Buena Vista, said that although BV had used mobiles widely for trailers, mobiles "would never be a platform of traditional cinema distribution". Paolo Simoes of Sony's theatrical distribution arm admitted that his company had sold Columbia titles to H3G for mobile release but insisted these were repertory films and not new releases. He proclaimed himself "convinced of the need to respect the windows separating release in various media". Alberto Pasquale, head of 20th Century Fox Italy, was not quite so reassuring. He simply commented that it remained to be seen whether mobile viewing increased revenues or simply transfer them from one delivery platform to another, as della Casa insists is the case.

That was in late December. In early January there was a shock announcement. Only a week after Sony's right arm had been placed comfortingly around the hunched shoulders of Italian exhibitors, its left (in the shape of Sony Pictures Home Entertainment, Italy) smacked them right on the nose. Fabrizio Ferrucci of SPHE came out and stated bluntly that: "Theatrical release is dead. The future is in mobile film." This was pane shuddering stuff, given the tact and politeness that had been exercised to date in any discussion of the fragility of windows. And suddenly it seemed that treachery was everywhere. Over the New Year Sony had been busy cramming its Italian site with trailer downloads for playstations and iPods. Of course, there was nothing intrinsically wrong in that: like BV's Zonderland, Sony distribution should have been able to claim that they were just warming the public up for the real event: the theatrical release. But here was Ferrucci stating the EXACT OPPOSITE. The trailer downloads to millions of roaming iPods were simply "the first step" in a process which would scatter millions of shards from shattered windows over the theatre's foyer carpets. The executive's further pronouncements seemed to require the echoey reverb of a cartoon tyrant: "The people have chosen... They want "pocket" entertainment."

Ferrucci went on to explain (much as Zonderland had done in a different way) that the cellphone was unlikely to replace the cinema: "I challenge anyone to watch a film on a phone". (Significantly, H3G movies can be paused and resumed by users, just in case the act two turning point gets spliced by the arrival of your train or chicken sandwich). But he did insist that simultaneous cross-media releasing was not merely desirable but "only a question of time", with home downloading and streaming a priority. He ridiculed exhibitors, saying that they'd end up having to order people off the streets and into their wretched theatres at gunpoint. The reverb picked up again: "The cinema screen as it exists in Italy today is condemned to death".

Will cinema eat itself?
Understandably, British theatrical distributors and exhibitors are also fearing for their futures. Plans are afoot to launch a TV channel called Eat Cinema, to be offered to Sky subscribers from March 2006. The quaintly antiquated notion here is to "lure TV viewers back to the cinema", though the UK representative body AIM, behind the initiative, also attributes the decline in BO over the last decade to the more contemporary threats of DVD sale or rental and VOD (video on demand). AIM cites a previous and successful campaign to publicise Harry Potter via Orange mobiles in support of its new bright idea. The apparent problem with this thinking is that those who use mobiles and who attend (in decreasing numbers) the cinema in the UK notoriously do not watch TV, hence the need to use mobiles to push cinema in the first place.

Ironically, at the same time as the network is lending a much needed hand to revive the big screen, BSkyB is announcing plans to lure viewers back to television with a series of new packages designed to fend off competition from BT's new VOD service, among other looming threats. Initially SKY wants to connect with roaming devices via Sky by Mobile and to capture audiences drifting from the goggle box to other devices inside the home (mainly PCs) with its new Sky by Broadband. The first will offer film, TV, sport, and news to all mobile networks, while the second will offer "recent" blockbusters plus news and sport for download.

But the real offensive will begin when Sky launches its next generation of top-boxes. These will allow a degree of technological consolidation to take place, since a broadband connection will allow downloaded content to bypass the computer. The geography of the domestic environment is important here. New generation top boxes will make it more likely for the time being that home entertainment continues to be delivered in one 'family room'. I'm speculating, but a current danger might be that fragmenting delivery devices and platforms could bring about changes in the physical distribution of the family within households, luring various family members to different rooms, or maybe out of the front door, thus rendering the relatively expensive SKY subscription a less sensible solution to family entertainment needs. Given a fragmented scenario, in any tug-of-war such as that currently taking place in Italy over soccer broadcasting between SKY and Berlusconi's Mediaset, the Mediaset-type pay-to-view (7 euro a game) solution will probably win out over SKY's hefty 500 euro annual subscription. New top-boxes or not, SKY's efforts to re-assemble the nuclear family seem doomed to failure. As Steven Soderbergh (see below) stated when giving his blessing to the H3G release of his Bubble in Italy, "Cellphones have come to have an important cultural role."

And here again there is an important point to grasp: entertainment (or culture) is going mobile not because it looks better that way, or because it's nice to watch a film on a bus, but because mobile platforms have increasing capacity and because interactive phones are the most widely-owned delivery devices. It's a demand- and manufacturer-driven drift that has little to do with the aesthetic philosophies of many current content suppliers. With the advent this year in Italy (and with 50% national cover by 2007) of HSDPA (High Speed Downlink Packet Access, aka Super Umts), access to the internet from mobile phones and interactive devices will be six times faster than current broadband connections. This will permit internet telephony from mobiles and the viewing of digital, terrestrial, satellite, or internet TV. With forecasts of four billion mobile users globally by 2011, entertainment will go mobile per forza. It's a bit like the old joke about the dog's superior vertebral flexibility: Why would you watch anything on a mobile? Because you can.

Cuban Revolution/Can this really be the end?
Of course, while the Italian exhibitors were boarding up their windows, a storm was building Stateside in regard to Steven Soderbergh's film Bubble, released almost simultaneously in the cinema, on DVD and on pay-cable TV. This caused similar hullabaloo and predictions of the imminent demise of the theatrical experience. Soderbergh and his backers, Mark Cuban and Todd Wagner, argued that a new model of release (Bubble went out to only 32 screens on Cuban's arthouse network of cinemas) could allow independent fare to do better in a world currently dominated by the Majors. This argument masks what seems to me the real significance of Bubble, which is not so much its smashing of windows in the Indie cause, but the fact that it was produced, distributed and exhibited outside of the studio system by individuals whose main business is internet-based.

Currently entertainment content generation and distribution for cinema and television is dominated by a handful of huge conglomerates which own the Hollywood Majors. The real challenge for Hollywood lies not in whether their product is released through cinemas or onto mobiles, but rather in the possibility that Google or Yahoo might take the Cuban-Wagner-Soderbergh lead and begin to create and distribute mainstream and not Indie entertainment. Google is already moving into distribution by launching an internet film and TV download service. Large-scale non-Major content generation by new media giants could spell not the end of cinema distribution, but of Hollywood itself. The danger is particularly acute because up to now the Majors have been relatively conservative and flat-footed, even techno-phobic, in looking beyond DVD at new platforms and formats for release.[1] For as long as they can retain their monopoly of generation and distribution they can afford this attitude. But once the monopoly is broken, and broken by individuals as fast-moving and clear-sighted as Soderbergh's backers, smashed windows will be the least of anybody's problems.

What is of course true is that when this happens there will be endless potential for new forms of film production and consumption, specially Indie. Traditional film distribution and exhibition could be by-passed altogether, eliminating not only territory-based markets but the necessary use of the theatrical route.[2] It could be argued that this is a thesis refried from the mid-90s hyping of 'digital platforms' and 'webcasting'. But there are significant updates and differences. First, immensely superior data transfer capacity has been achieved. Second, a plethory of new target devices for delivery are available, together with new distribution platforms. Third, and most importantly as is argued here, we may soon see a situation in which mainstream entertainment no longer requires theatrical initiation, or even broadcast by a network belonging to an entertainment conglomerate. Once these new forms of film generation and consumption are the norm, people will start to look away from the billboards, and word will soon get round forums and blogs that there's a film studio in Ust Pustynka streaming unimaginably interesting gunk. And then the floodgates will be well and truly open.

1 It's true that Sony has been trumpeting its successor to DVD: a new format called Blu-Ray (it uses blue rather than red lasers), necessary due to growth in high definition TV with its heavier memory demands. Blu-Ray stores five times more than DVD but will be more expensive since its technology is innovative. Hollywood is backing the Sony format against Toshiba's rival red laser HD-DVD format. But while a new format will certainly be needed to carry more data, there's no guarantee that the data will be originated and sold through the channels currently used for DVD video (i.e. discs retailed on the highstreet or online). It is more likely that such formats will be used to store data burned after download from new distribution sources, possibly outside the Majors' grasp.

2 Theatres have high capital and running costs and increasingly small margins, so they need very good box office to break even and excellent box office to go into profit. Even if they could escape the arm-twisting tactics of the Major distributors (I'll give you this if you'll tighten your margin, take these and dump those), they are mostly not in a position to screen minority fare, any more than a bookseller in Bantry can decide to restrict their sales to books in Korean. DVD sales, through highstreet retailers and increasingly online, are for the time being mostly tied to theatrical release of some sort, except in the subcultural caverns of horror, porn and certain types of action (if that doesn't sound tautological). But if that link is broken, even DVDs can disappear except for data archival purposes.