Jeff Baumgartner
It's probably too early to tell what the extent of the damage could be, but cable operators and even the DBS folks might have cause for concern about the effect that streaming and digital downloads of Hollywood movies might have on their video-on-demand or pay-per-view revenue models. But the content owners–Hollywood studios in particular–are already terrified of the possibilities, and perhaps rightly so.

We've seen what peer-to-peer services and the Internet can do with copyrighted music (as a former Napster user, I'm as guilty as anybody). When the data speeds are right, the illegal distribution of copyrighted movies and other videos is not farfetched at all. In fact, there's plenty of that going on right now.

Putting a big scare into Hollywood in February, Taiwan-based was illegally streaming movies and other copy-protected content for about $1 per title. Its life was brief, snuffed like a candle before it burned out of control. It wasn't the first case, and it certainly won't be the last.

Anti-piracy firms such as MediaForce probably won't catch them all. But maybe it's time to give credit to the studios for seeing the future–through partnerships with companies like Intertainer and even the forthcoming, studio-backed Movielink service–and embracing the concept of digital distribution through streaming or straight downloads. Instead of crying foul at every turn, they're starting to play the game. They're playing scared, but at least they're playing. They're weighing the good and evil of it, and they're starting to concentrate on the good.

For cable, it's also a good vs. evil scenario–evil because it can damage VOD and PPV revenues and dilute the value of the overall value of programming that consumers pay for; but good because such applications can help operators market more expensive, ultra-fast high-speed tiers.

And, who knows? Internet VOD could lead to better movies for everybody.

I note that because a recent episode of PBS' excellent Frontline series, "The Monster That Ate Hollywood," argued that the quality of movies continues to deteriorate as corporate Hollywood focuses too much of its financial and marketing muscle-power on movies for the teen crowd, and puts all of its hopes in making big bucks on opening weekend. A good take there can serve as the financial lynchpin for the ancillary revenues that follow: windows for VHS and DVD rentals and sales, pay- and broadcast-television, etc. That's why Adam Sandler movies–juvenile as they are–get made.

Because of this trend, actor Michael Douglas argues that some potentially great films don't get enough time to find an audience, or don't get the green light at all. Those films, he adds, need more time to "breathe."

Enter broadband, the virtual lungs of these buried, unappreciated treasures. Though the more cerebral titles may not get as much play at the cineplex compared to their blockbuster brethren, broadband distribution will help them find their audiences–and maybe give Hollywood more reasons to support them.

After seeing too many Adam Sandler films get panned by critics, but make money at the box office, it's definitely time for a breath of fresh air.